Career development: Business still looks bad in the insurance industry

Taking an exam

A new report by the Chartered Management Institute has revealed that managers in the insurance sector fear a bleak and uncertain future. As the downturn continues to cast its shadow, optimism has collapsed and managers are questioning whether the recession is really over.

There is a very real danger that if the government does not act fast to increase the support available to business leaders, its attempts at deficit reduction and widespread reforms — featured in the comprehensive spending review — could be severely hampered.

CMI's latest Economic outlook report, authored by its chief economic advisor Lord Eatwell, tracks business confidence among senior executives and reveals some of the worries that are affecting managers across the UK. Nearly all UK managers surveyed — 82% — claim the recession continues to negatively impact on their organisations. To make matters worse, 60% of managers still operate under pay freezes, while a similar number of organisations (53%) continue to have their doors shut to new recruits.

Chancellor George Osborne opened his spending review by announcing that we face the prospect of a 'hard road ahead' but one that, ultimately, 'leads to a better future'. For businesses within the insurance sector, it is clear the hard road is becoming a well-worn path. In fact, managers have experienced such a rough ride already this year that they cannot imagine things getting better any time soon. Most say they feel pessimistic about their prospects over the next six months.

Unsurprisingly, job insecurity is now at record levels too, with 38% of managers feeling insecure, up from 32% six months ago, and 13% very insecure.

The government must take what steps it can to help out. It is unreasonable to expect, particularly after the spending review, that the flow of investment via government will improve significantly in the short term. But what is clear is that if businesses are going to get back on their feet, highly skilled and confident managers will be needed to lead the way back to growth.

CMI research reveals that 62% of business leaders want the government to give them greater freedom to spend what little funding for skills development is available. After all, managers know better than anyone where money for skills development needs to be spent within their business.

The insurance sector will find it difficult — if not impossible — to continue to develop and support their managers unless government does more to stimulate a reliable flow of bank lending and initiates greater financial support in the form of tax breaks for skills development.

But responsibility does not just fall to government. The CMI is also calling on employers to recognise action they can take to improve their prospects. When cash flow is tight, cutting training budgets may seem the most viable solution to free-up some cash. Yet, without highly skilled and fully trained managers, organisations cannot operate at their best and this risks further damage to their operations and the wider economy.

So employers must resist the urge to further reduce their squeezed development budgets and recognise that continued investment in management skills development is the best way to improve morale, boost confidence levels and strengthen their businesses.

Ultimately, the key to recovery, both for the insurance sector and the UK more widely, is to ensure that its managers are confident about the future. This cannot happen without increased government support. The coalition must extend a lifeline to managers now, especially if the efficiency reforms announced earlier this month are to prove a success.

The full Economic Outlook report can be found at

Ruth Spellman is chief executive of the Chartered Management Institute

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