By Gerard Walker, Future Jobs-Skills-Work Insights
“Leading the Way: Investing in Management Development for Productivity and Growth”
The recent Expert Group on Future Skills Needs (EGFSN) report examines management skills and practices in SMEs in Ireland, the attitudes and barriers to management development, and the opportunities to improve performance through greater investment in targeted, high-quality management training and development. The OECD and the National Competitive Council have identified low productivity and the need to develop management capability in Irish SMEs as an issue. SME managers and subject matter experts attended six focus groups and over 450 SME managers responded to the online survey carried out. Companies surveyed included micro 5-9 employees (9% of sample), small 10-49 employees (55% of sample); and medium 50-250 employees (36% of sample).
Key Findings of the report are:
- Managers recognise management and leadership development as a top priority. However, fewer than half of the firms surveyed for the study reporting a dedicated budget for management development. Time is identified as the biggest barrier to training; but having the financial resources and negative perceptions and concerns about relevance were also important.
- SMEs report a high reliance on informal manager learning and business strategising practices, especially in smaller firms. However, in this study, firms with better innovation outcomes and management scores were found to conduct more formal training and to use more formal approaches to strategising.
- The study identified a large capacity for delivering management-related training and development to SMEs in Ireland by a wide range of agencies and bodies, both public and private sector comprising 1,100 management development courses with 81,000 participants in 2019. However, feedback was that many SMEs find the training offer confusing and not sufficiently coherent. Another aspect arises from managers’ lack of clarity about what they need, both personally and for their business. A good skills assessment is the first step on the path to clarity and the identification of priority areas for training.
- The study shows a need for improvement in HRM practices concerning dealing with underperformance and hiring practices. Also, a weakness in performance monitoring that can lead to a failure to recognise or deal with underperformance in a timely manner.
- Survey respondents in general felt confident about their digital literacy, but further questioning on this suggests that this is within the context of standard communication tools such as email or social media. Most firms do not use advanced analytics and data monitoring to assist in decision making. Firms that did demonstrated better management practice scores and improvements in innovation outcomes.
- As firms grow and reach different stages in their development their management development needs will change. Resilience is important for SMEs, in particular Irish SMEs that are more exposed in a globally outward-looking economy. Despite such a global outlook, exporting and the international presence of Irish SMEs is weak relative to other countries.
The study identified several key areas of weakness among Irish SME managers, where additional training needs to be focussed, such as formal strategising, HRM and monitoring of KPIs. The area of management development in Ireland lacks data for monitoring progress over time and for assessing the links between investment in training and better outcomes for firms. The report makes a series of recommendations to address these challenges. An Implementation Group is to be established to lead and coordinate the delivery of the recommendations. The aim will be to build on the work that is already being done. Much of the work detailed relates to coordination and cooperation between organisations. Strong and effective coordination between all these bodies is required.
The EGFSN report can be accessed HERE.