UK Economy

UK managers as an occupational group

In spite of downsizing and restructuring of modern organisations to "flatten" management hierarchies, the ranks of managers in the UK are actually reported to be growing. Global competition has highlighted the need for adoption of modern management initiatives to deliver enhanced quality and cost-effectiveness in UK business operations. With the emphasis placed upon empowerment of employees to achieve these operational aims, the issue of development of managerial competencies within the workforce becomes paramount. According to the Labour Force Survey, in Autumn 2004 the highest proportion of employees in the UK (14.9 per cent) worked in the "managers and senior officials" occupational group.1 This group, as defined by the Standard Occupational Classification (SOC), includes corporate managers and managers in agriculture and services. Based upon average hourly wage, the "managers and senior officials" occupational group is one of the highest paid across all occupational sectors in the UK, according to the autumn 2004 Labour Force Survey.2 The UK relies less upon family members of company owners to manage corporations and more on professional managers. The UK also has a lower proportion of managers with advanced formal educations compared with other countries, but this may be due to the higher proportion of UK employees that are classed as managers.3 The Changes in Employer Practices survey (4) reports a net recorded growth in the number of managers being recruited since 1999 in all sectors. This trend was especially prominent in financial and business services, public administration, health, education, manufacturing and construction. The smallest increase in management recruitment was expressed in the transport, storage and communications sectors yet still more respondents reported increases in management recruitment than decreases. A survey study of large service organisations showed that half the organisations studied used Competency Based Management Training (CBMT) programmes to train their managers, with the aim of increasing the availability of skills that were of direct business value. CBMT represents a significant investment for organisations in managerial competencies, with 2/3 of the organisations studied spending over £1,000 per manager and 1/3 investing over £2,000 in the training of each manager(5). The Management Standards Centre (MSC) defines managerial competencies based upon definition of criteria associated with effective management of people, finances, operations and information. The table below outlines six key functions associated with effective management and leadership, according to the MSC, which may be used to structure management training and competency development programs(6).

According to a review of UK competitiveness by the Department of Trade and Industry in 2003(7), there is some evidence to suggest that UK companies are slower and less likely to adopt contemporary management programmes such as Total Quality Management, then their foreign counterparts, especially in the manufacturing industry. A number of explanations for this trend have been proposed, including: resistance to change, inadequate training, low private and public investment in R&D, and lack of collaborative institutions for the dissemination of management best practices. Small and medium-sized enterprises provide more employment and business turnover in the UK than large firms and public organisations together. In 1998, firms with fewer than 250 employees employed 57 per cent of the workforce and accounted for 54 per cent of turnover(8).

Small and medium-sized enterprises provide more employment and business turnover in the UK than large firms and public organisations together. In 1998, firms with fewer than 250 employees employed 57 per cent of the workforce and accounted for 54 per cent of turnover(9). Effective management of SMEs provides certain challenges, including the control of innovation, marketing and training needs, compared with larger enterprises that possess specific departments to deal with these functions. Effective management of SMEs provides certain challenges, including the control of innovation, marketing and training needs, compared with larger enterprises that possess specific departments to deal with these functions. Effective management is essential to secure competitive viability in globalised markets and the emerging knowledge-based economy. Increasing availability of information technology and Internet business means increases in the levels and strength of competition. The challenge for modern managers lies in effective "knowledge management"(10) and the creation of perpetually "learning organisations"(11) to achieve valued innovation in both products and business processes.

Employability of young people

The most disadvantaged young people in Britain should be offered basic life skills lessons covering anger management, speaking in groups and waking up on time, a government report says (Guardian, 24 Nov 05, p. 9). The study, by the government’s Social Exclusion Unit, concedes that even the most low level employment programmes are not working for some 200,000 young people, who the authors say are far from ready to start work or training. There are about one million young people not in education, employment or training in the UK, who represent a far higher proportion than in many comparable countries (Foyer Federation).

The key drivers for anti social behaviour are due to long term unemployment, poverty, egoistic culture, decline of deference, and most important lack of meaningful human relationship that binds people together. The decline of that puritan tradition that commitment to self discipline and temperance, which were the bases of social relation engendered moral laissez faire. The prevalent lack of self esteem is socially justified, or at best is replaced by rebellious character.


The Labour Force Survey in the Largest Regular Household in the UK




Labour Force Survey LFS interviews are conducted continuously throughout the year. In any 3 months period, a nationally representative sample of approx 102.000 people aged 16 or over in around 57000 households are interviewed. Each household is interviewed five times, at 3 monthly intervals. The initial interview is done face to face by an interviewer visiting the address. The other interviews are done by telephone wherever possible. The survey asks a series of questions about respondent’s personal circumstances and their labour market activity. Most questions refer to activity in the week before the interview. The concepts and definitions used in the LFS are agreed by the ILO.

The definitions are used by EU member countries and members of the OECD. The LFS was carried out every two years from 1983. The ILO definition was first used in 1984. This was also the first year in which the survey was conducted on an annual basis with results available for every spring quarter (representing an average of the period from March to May). The survey moved to a continuous bases in spring 92 in Great Britain and in winter 94/5 in Northern Ireland, with average quarterly results published 4 times a year for seasonal quarters: spring (March to May)., summer (June to August) autumn (Sept to Nov) and winter (Dec to Feb). From April 98, results are published 12 times a year for the average of 3 consecutive months.

The LFS collects info on a sample of the population. To convert this info to give estimates for the population the data must be grossed. This is achieved by calculating weighting factors (after referred to simply as weights) which can be applied to each sampled individual in such a way that the weighted-up results match estimates or projections of the total population in terms of age distribution, sex, and region of residence.

Strength and limitations of the LFS

The LFS produces coherent labour market info on the basis of internationally standard concepts and definitions. It is a rich source of data on a wide variety of labour market and personal characteristics. It is the most suitable source for making comparisons between countries. The LFS is designed so that households interviewed in each three months period constitute a representative sample of UK households. The survey covers those living in private households and nurses in NHS accommodation. Students living in halls of residence have been included since 1992 as information about them is collected at their parents address. However the LFS has its limitations. It is a sample survey and is therefore subject to sampling variability. The survey does not include people living in institutions such as hostels or residential houses. ’Proxy’ reporting (when members of the household are not present at the interview, another member of the household answers the question on their behalf) can affect the quality of info on topics such as earnings, hours worked, benefit receipt and qualifications. Around one third of interviews are conducted by proxy usually by a spouse or partner but sometimes by a parent or other near relation.



Sampling Variability

Survey estimates are prone to sampling variability. The easiest way to explain this concept is by example. In the Sept to Nov 97 period, ILO unemployment in Great Britain (seasonally adjusted) stood at 1,847,000. If we drew another sample for the same period we could get a different result, perhaps 1,900,000 or 1,820,000. In theory, we could draw many samples, and each would give a different result. This is because each sample would be made up of different people who would give different answers to the questions. The spread of these results is the sampling variability. Sampling variability is determined by a number of factors including the sample size. The variability of the population from which the sample is drawn and the sample design. Once we know the sampling variability we can calculate a range of values about the sample estimate that represents the expected variation with a given level of assurance. This is called a confidence interval. For a 95% confidence interval we expect that in 95% of the samples (19 times out of 20) the confidence interval will contain the true value that would be obtained by surveying the entire population. For the example given above, we can be 95% confident that the true value was in the range 1,791,000 to 1,903,000.

Unreliable estimates

Very small estimates have relatively wide confidence intervals making them unreliable. For this reason, the ONS does not publish LFS estimates below 10,000.

Non-response
Non-response can introduce bias to a survey particularly if the people not responding have characteristics that are different from those who do respond. The LFS has a response rate of around 80% to the first interview and over 90% of those who are interviewed, once go on to complete all five interviews. There are relatively high levels for a household survey. Any bias from non-response is minimised by weighting the results.

Weighting or grossing converts sample date to represent the full population in the LFS, the data are weighted separately by age, sex and area of residence to population estimates based on the census. Weighting also adjusts for people not in the survey and thus minimises non-response bias.

LFS concepts and definitions

Discouraged workers - a sub-group of the economically inactive population, defined as those neither in employment nor unemployed (on the ILO measure) who said they would like a job and whose main reason for not seeking work was because they believed there were no jobs available.

Economically active - people aged 16 and over who are either in employment or unemployed.

Economic activity rate - the percentage of people aged 16 and over who are economically active.

Economically inactive - people who are neither in employment nor unemployed this group includes, for example, all those who were looking after a home or retired.

Employment - people aged 16 or over who did at least one hour of paid work in the reference week (whether as an employee or self employed) those who had a job that they were temporarily away from (on holiday, for example), those or govt supported training and employment programs (from spring 1983), and those doing unpaid family work (from spring 1992).

Employees - the division between employees and self employed is based on survey respondents own assessment of their employment status. Full time - the classification of employees, self employed and unpaid family workers in their main job as full time or part time is on the basis of self assessment. Up until autumn 95, people who were on govt work related training programs are classified as full time or part time according to whether their usual hours of work per week were over 30 or 30 and under, from winter 95/96 onwards, the full time/part time classification for this group has been changed to self assist in line with the other groups outlined above. People on govt supported training and employment programs who are at college in the survey reference week are classified, by conention as part time.

Government supported training and employment programs comprise all people aged 16 and over participating in one of the govt’s employment and training programs (youths training, training for work and community action) together with those on similar programs administered by training and enterprise councils in England and Wales, or local Enterprise companies in Scotland.

Unemployment - unemployment figures from the LFS, which are based upon the ILO definition, were relabelled ‘unemployment’ rather than ILO unemployment in Jan 03. This emphasis that the LFS figures provide the official and only internationally comparable measure of unemployment in the UK. For more details see the National Statistics web www.statistics.gov.uk/cci/nugget.asp?id=251. The ILO measure of unemployment used through out this supplement refers to people without a job who were available to start work in the two weeks following their LFS interview and who had either looked for work in the four weeks prior to interview or were waiting to start a job they had already obtained. This definition of unemployment is in accordance with that adopted by the 13th International Conference of Labour Statisticians further clarified at the 14th ICLS, and promulgated by the ILO in its publication.

Unemployment (rate) - the percentage of economically active people who are unemployed on the ILO measure.

Unemployment (duration) - defined as the shorter of the following two periods:
a) duration of active search for works
b) length of time since employment

Temp employees - in the LFS these are defined as those employees who say that their main job is non permanent in one of the following ways, fixed period contract, agency temping, casual work, seasonal work, other temporary work.

Unpaid family workers - the separate identification from spring 92 of this group in the LFS is in accordance with international recommendations he group comprises persons doing unpaid work for a business t hey own or for a business that a relative owns.

Sources:

[i] Occupational sectors defined by SOC (Standard Occupational Classification) 2000. Data source: Office of National Statistics website (2004) Labour Force Survey Historical Quarterly Supplement - Table 16: All in employment by occupation (not seasonally adjusted). Available at: www.statistics.gov.uk/STATBASE/ssdataset.asp?vlnk=7916
2 Source: Office of National Statistics website (2004) Labour Force Survey Historical Quarterly Supplement - Table 36: Average of gross weekly/hourly earnings by occupation (£s - not seasonally adjusted). Available at: www.statistics.gov.uk/STATBASE/ssdataset.asp?vlnk=7936
3 DTI (2003) UKCompetitiveness: Moving to the next stage. DTI Economics Paper No. 3.
4 As described in: ESRC (2003) Managing Workplace Change. Future of Work Programme Seminar Series. Swindon: Economic and Social Research Council.
5 Strebler, M. T. & Bevan, S. (1996) Competence Based Management Training. IES Report 302.
6 Adapted from: Management Standards Centre website (2004) Available at: www.management-standards.org
7 Data Source: International Institute for Management Development (2004). Data available from: www.dtistats.net/competitiveness5/
8 DTI (2003) UK Competitiveness: Moving to the next stage. DTI Economics Paper No. 3.
[9]Cooke, P. N. & Clifton, N. C. (2002) Social Capital and Small and Medium-sized Enterprise (SME) Performance, 2000-2002. SN4605 ESRC Grant R000238356. Available at: www.data-archive.ac.uk
10 Stewart, T. A. (1998) Intellectual Capital: The New Wealth of Organisations (Updated Edition). London: Nicholas Brealey.
11 Senge, P. M. (1990) The Fifth Discipline: The Art and Practice of the Learning Organization. London: Random House.