A survey of 2,000 UK staff by Randstad Financial & Professional (RFP)  revealed that one fifth (19%) of employees say there are now fewer layers of management at their company than five years ago – whilst just 1 in 7 (14%) say that more layers of management have been added.

As a result, RFP believes that financial services workers and accountants are being forced to switch companies to climb the career ladder, as the number of internal incremental promotion opportunities is shrinking.

Tara Ricks, MD of RFP (pictured), said: “Accountancy and financial services firms streamlined their business models in the wake of the financial crisis, and one of the key ways of doing this was to reduce layers of management and increase the spans of control of each strata. But creating leaner workforces has a knock-on effect on internal promotion opportunities.

“As the tiers of middle management are slowly squeezed, the opportunities to climb the career ladder within an organization are contracting. Finance workers are being forced to move out of their company to progress their career, or face professional stagnation. At the same time, employers face losing ambitious high-flyers to their competition – and could find them hard to replace as the universal skills shortage continues to bite.”

Fewer opportunities for progression in IT & telecoms, education and nursing

The research analysed a diverse range of sectors – from accountancy, social work, and IT to engineering, nursing and property – to find out the average number of layers of management in each of the main UK industries.

It found that the leanest management structures were in the Education (3.5), IT & Telecoms (3.5) and Nursing (3.5) sectors – each having significantly fewer layers than the UK average (4.4).

Both Accountancy (4.7) and Investment Banking (4.7) firms typically had more layers of management than the UK average.

Ricks added: “The labour market has roared back into life over the last few years, but accountancy firms and finance companies continue to flatten internal structures to maintain leaner business models. The result is the creation of more productive, well-oiled companies, able to implement improvements at a faster pace – but less room for progression between positions.”

She concluded: “There are fewer cogs in the machine, but each cog is locked more firmly into place. The next five years will see the average layers of management fall further as the slim-down continues.”

The trend for delayering

In 2005, the Boston Consulting Group claimed the phrase ‘delayering’ to describe the flattening of organizations’ management structures. But removing tiers of management has been a key tactic for management consultancy firms including the likes of Booz Allen Hamilton and McKinsey since the eighties.

The logic is that compressing and amalgamating layers together allows decisions made at the top of the career chain to filter through to the workers at the bottom much more quickly, helping companies to be more efficient and save money. Increasing the span of control of managers also encourages leadership through example, allowing workers to operate autonomously and discouraging the temptation to micro-manage.