Business managers: skills opportunities and challenges (2019 update)

Summary

The business, or administrative and commercial managers plan and coordinate a range of functions (e.g. finance, policy, human resources, research and development, advertising, public relations) within their organisations.

Key facts:

• Around half of business managers are employed in just three sectors: professional services, manufacturing and wholesale & retail trade. 
• The key 3 workplace tasks and skills of business managers are autonomy, creativity and resolution and gather and evaluate information.
• Around 3.8 million people were employed as business managers in 2018. Employment in the occupation grew by 10 per cent between 2006 and 2018.
• Employment is projected to grow by 14 per cent over the period 2018 to 2030.  This will create more than half million new jobs.  The total demand for business managers will reach 2.6 million between 2018 and 2030 – including more than 2 million job openings needed to replace people who will leave their workplaces for reasons such as retirement.
• Business managers traditionally constitute a highly qualified occupational group. The share of people holding high qualifications is expected to grow to more than to 70% till 2030.

Tasks and skills

Business managers [1] plan and coordinate a range of functions (e.g. finance, policy, human resources, research and development, advertising, public relations) within their organisations. Their job involves, for example, formulating and administering policy advice, strategic and financial planning, directing the development of initiatives for new products, marketing, public relations and advertising campaigns, monitoring and evaluating new policies and strategies. The two main subgroups for this occupational group are ‘business services and administration managers’, and ‘sales, marketing and development managers’.

According to Eurofound's Job Monitor, the key 3 workplace tasks and skills of business managers are autonomy, creativity and resolution and gather and evaluate information.

Figure 1: Importance of tasks and skills of business managers

What are the trends for the future? [2]

Around 3.8 million people were employed as business managers in 2018. Employment in the occupation grew by 10 per cent between 2006 and 2018. The employment level of business managers across sectors is expected to increase by 14 per cent over the period 2018 to 2030, representing more than half million new jobs. 22 of analysed European countries are expected to create new jobs for business managers, while in only 6 countries their employment levels should decline.

Figure 2: Future employment growth of business managers in European countries (in %)

Still, this underestimates the true level of employment demand. Over the period 2018-2030 an estimated 2.1 million people are projected to leave the occupation for one reason or another such as retirement [4]. Given the projected increase in employment over the same period, this will result in there being around 2.7 million job openings that will need to be filled between 2018 and 2030.

Figure 3: Future job openings of business managers (2018-2030)

With regard to education level, around a quarter of business managers held medium level qualifications in 2018, but this is projected to slightly decrease in the period 2018 to 2030. During the same period the share of highly qualified workers is expected to grow from around 69 to 71 per cent of total employment. The percentage of low qualified workers in the occupation is projected to remain stable in the future.

Many people in this occupation work in the business services sector, especially in wholesale and retail trades and administrative and support services. In the future, the strongest employment growth is expected in health, accommodation & food services, construction and financial and insurance activities.

More information on this occupational group can be found here.

Which drivers of change will affect their skills?

The skills required for these managers have changed considerably in recent years due to technological change, globalisation, and demographic change. The impact of these drivers depends on the specific sector and nature of each manager’s job. For example, sales and marketing managers may need different skills from human resources managers to respond to even the same (economic, technological, social etc.) driver.

• Technological developments will continue to change the skill profiles of these managers, especially given their major role on the collection, analysis and use of data (‘big data’) in their organisations. Business managers will need to understand an array of new technologies, choose the ones that best fit their needs and deploy them within specific organisational and/or departmental contexts. [5] For example, technological advancements, such as automation and ‘blockchain’ distributed databases [6], are already radically changing job tasks in this occupational group.

Managers working in the banking and financial sector are likely to see the business models in which they work being disrupted by the “fintech” wave [7]. “Fintech” will create a need for people at ease with complex and evolving situations and with an aptitude for programming languages. [8] In the same sector, increased automation is bringing about the introduction of robot-advisors which are reformulating the way consumers take financial decisions. This, in effect, creates a new paradigm for the sector and subsequently its personnel.

“How to ensure your organisation is ready to take advantage of the FinTech people opportunity”

• Encouraging and incubating innovation: Financial Institutions (FIs) need to re-learn how to innovate and attract talent with the right mix of technical and commercial skills. This involves a mind-set change from traditional leadership-down management to a model that encourages innovation.
• Adopting a FinTech mind-set: Established and large financial institutions will need to experiment with new business arrangements (such as partnerships and joint ventures) to gain access to the talent and the innovation needed to pinpoint game-changing products. This involves identifying promising profiles and developing incentives to attract entrepreneurial talent.

Source: Blurred lines: How FinTech is shaping Financial Services, Global FinTech Report, PWC, 2016

A very recent but quickly evolving trend is the so-called “RegTech”: the use of technological solutions to facilitate the delivery of regulatory requirements. Corporate managers will need the skills to use and understand “RegTech” to facilitate their decision-making, for example on fraud prevention and easier collaboration with financial supervision. [9]

• As international competition intensifies [10] effective resource management is key. Business managers would benefit from skills like effective time, materials and budget management; co-ordination and optimisation of available resources has always been a key skill for business managers, but in a globalised business environment one would increasingly need to also anticipate the effects of once-off ‘shocks’ deriving from external markets. Globalisation and an organisation’s international exposure of activities also shapes human resource management approaches, as well as the challenges and actions expected from different human resources expert roles. [11]
• Growing trade globalisation in the ever-changing business environment stress the need for skills such as a capacity for anticipating and implementing change; being agile; and foreign language skills. [12] Exposure to foreign markets also requires thorough understanding and compliance with foreign regulations, as well as an understanding of foreign consumers.
• For managers working in advertising, public relations and marketing, the growth of digital marketing has created new skill demands in areas such as social media optimisation, analytics and return-on-investment, and client management in international markets. [13] In sales, the increased prominence of web-based selling requires sales managers to embrace new techniques of customer handling and relationship-building skills. [14]
• Demographic changes already alter labour markets significantly. Human resources and selection managers in particular are faced with challenges posed by the changed demography of European workforces [15]. Specific skills will be needed to manage the younger generations [16], facilitate knowledge transfer from older workers to younger cohorts (e.g. through specific pairing between experienced and inexperienced employees), and exploit fully the high level of digital literacy characterising generations Y and Z.
• As a part of its Ditigitalization and future of work project, Cedefop estimates the risks of automation for occupations. The most exposed occupations are those with significant share of tasks that can be automated – operation of specialised technical equipment, routine or non-autonomous tasks  – and those with a small reliance on communication, collaboration, critical thinking and customer-serving skills. The risk of automation is further accentuated in those (occupations) in which people report little access to professional training that could help them to cope with labour market changes. Business managers belong to occupations where the automation risk is very low.

How can these skill needs be met?

The demand for new and/or updated skills of these workers is growing, due to the drivers above and other, more sector-relevant changes. It could be argued that this is reflected in the rising number of business managers participating in training in the period of 2011-2017 (from 451 thousands to 582 thousands) [17].

The training itself is provided by various means. For instance, private sector organisations in collaboration with universities provide classes on the effects of legislative changes, on budgeting and amendments to executive processes, [18] or on programming for those dealing with ‘fintech’. Some programmes have a step-by-step approach, offering a tailor-made training plan to make up for students’ skills gaps [19]. Business managers can strengthen their qualifications and skills by pursuing online competence frameworks. Exchanges of good practice for administrative managers can also bring benefits, as demonstrated at European level where public-private cooperation activities have been used [21].

At the same time, employers have an important role to play. By offering training opportunities, and encouraging a learning-friendly corporate culture, they can actively prevent skill gaps [22]. Managers in this occupational group hold very important positions and failing to keep their skills updated could have major negative effects in a firm’s productivity and competitiveness.

Business managers in SMEs typically face greater constraints (such as in time availability and resources) compared with those working in larger corporations, which limit their training opportunities. SMEs could explore online training options that offer several benefits; they can also benefit from working with business clusters that have both the infrastructure and the network to provide support and indirectly facilitate managers’ training.