Underperforming middle managers are cutting the productivity of British business by a whopping £220 billion per year.

The figure comes from research by management consultancy Hay Group, which also found that 38 per cent of UK directors believe their organisation is ‘paralysed’ by ineffective middle management.

In fact, 40 per cent of British directors claim their middle management is the single greatest barrier to achieving their company’s objectives.

According to the report, Corporate Soufflé – is the middle giving way?, 54 per cent of senior managers feel middle managers are not committed to achieving their company’s strategic goals, with 62 per cent bemoaning their lack of management and leadership skills.

And although 72 per cent of middle managers believe they could do their boss’s job, according to senior managers only 21 per cent of middle managers have the talent to become an effective senior manager.

Giles Walker, senior consultant at Hay Group and author of the report said: “Our research reveals an alarming performance gap at middle management level. British business leaders are struggling to compete in a challenging global economy because middle management lacks the skills to make business strategy happen.

“Unless UK Plc takes action to address the skills gap, this productivity erosion will only continue.”

Another key finding is the lack of trust between middle management and their senior colleagues – just 34 per cent of middle managers believe their senior counterparts are honest with them, a figure which rises to 44 per cent when senior managers are questioned about the honesty of middle management.

It’s when the findings are translated to the bottom line that the failure of middle management becomes alarming.

Senior managers believe that, given appropriate training and development, middle management could be up to 29 per cent more productive.

But their main concern is the impact of middle managers on the rest of the workforce, with 48 per cent of senior managers complaining that middle managers fail to address underperformance in their teams.

Middle managers themselves confess that with better training, their frontline teams could enhance productivity by the same 29 per cent.

A 29 per cent productivity increase at middle management and frontline levels would represent a staggering £220 billion additional annual output in the UK service sector alone.

Walker added: “With the impending retirement of the baby boom generation from UK Plc, developing middle managers into tomorrow’s leaders is a business critical challenge for Britain’s senior management.”

The issue for HR and leaders is that both senior and middle managers have diagnosed a lack of training and development opportunities and ineffective performance management as key causes of middle management underperformance.

More than two-thirds of senior managers admit that their middle management colleagues have not been adequately trained for their current position. Similarly, 54 per cent of middle managers feel that a lack of training is preventing them from performing effectively.

Senior managers also state that on average it takes a newly recruited or promoted middle manager more than seven months to perform their role effectively – compared to a target of three months.

The research revealed that the average British middle manager has not participated in any formal training for an average of 17 months – backing up the belief among 22 per cent of senior managers that training is not a high priority for their organisation.

That belief is reinforced by 64 per cent of business leaders and 60 per cent of middle managers describing the system of performance evaluation and feedback in their organisation as ‘inadequate’.

Walker said: “Rather than expressing frustration over middle management capabilities, business leaders must implement effective training and development programmes and performance management tools to enable them to improve skills and enhance performance.”