Engage middle managers to maximize bottom line

2008-6-10  |     NEWSPAPER EDITION

ALMOST every company has them. They may number six or 6,000 and they all share the same job category - middle managers.

They are often referred to as the "glue'' that holds companies together, bridging the gap between the top management team and lower level workers.

However, middle managers also can be a challenging group of employees to develop and retain.

According to a 2007 Accenture survey of middle managers around the world, 20 percent reported dissatisfaction with their current organization and that same percentage reported that they were looking for another job.

One of the top reasons cited was lack of prospects for advancement.

"Many companies are seeing significant turnover in middle management ranks, and with significant turnover, they don't have the ability to execute strategy,'' says vice dean of Wharton Executive Education Thomas Colligan.

In addition to strategy implementation issues, the cost of turnover is extremely high for companies. Colligan noted that one large partnership facing a 20 percent turnover rate did a calculation in which it concluded that for each 1 percent it could reduce turnover, it would increase partner earnings by US$80,000.

These observations are even truer in a down economy that is struggling with higher gas and food prices, reduced consumer spending, downsizing and a degree of uncertainty that is affecting industries across the board.

David Sirota, co-author of "The Enthusiastic Employee: How Companies Profit by Giving Workers What They Want,'' predicts that middle managers will "again bear a significant part of the pain that the current economic conditions will bring.''

Joe Ryan, adjunct professor at Wharton Executive Education, agrees. As companies go through economic cycles like the current one, middle managers get hit with the elimination of rewards and incentives and, in some cases, layoffs. This is particularly true now in the financial services industry, he says.