Bad people management costs UK £12bn each year

The UK is losing £12bn a year due to poor people management policies,
according to report out this week.

The figure, which equates to 1.66 per cent of the UK’s total gross domestic
product (GDP), is based on the average earnings of managers and the proportion
of time spent managing poor performers.

The report – Getting the edge in the new people economy, by consultancy SHL
and think-tank The Future Foundation – surveyed 700 managers in seven countries,
including 100 from the UK, in organisations with turnovers of more than £1m.

Failure to match the right people to the right jobs is also widespread, says
the report. It takes almost eight months for a UK employee to reach the
required level of performance in a new job, with managers spending 25 per cent
of their time dealing with those poor performers.

John Bateson, CEO for SHL Group, said: "The figures are startling and
only begin to scratch the surface of the problem. The statistics are based on
salaries, and do not take into account the amount of money each individual can
potentially bring into an organisation."

John Philpott, chief economist at the Chartered Institute of Personnel and
Development (CIPD) agreed that this type of research was valuable in
highlighting the issue, but felt the figures quoted were unlikely to be

"There is a huge cost associated with poor people management, but
sometimes I suspect the numbers are there for effect," he said. "The
real issue is that there is definite scope for improvement in people

Last year, an exclusive Personnel Today survey of 700 senior HR professionals
showed three-quarters were concerned with the abilities of line managers.

By Mike Berry

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