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Closing leadership skill gaps across frontline and mid-level managers

Leadership capability gaps across frontline and mid level managers are now one of the most significant risks facing organisations. While many businesses continue to invest in senior leadership development, capability at the frontline and middle management level remains inconsistent. This gap has direct implications for performance, engagement, and organisational resilience.

For learning and development and HR leaders, strengthening leadership capability across these levels is no longer optional. It is essential for sustaining performance, supporting employees, and navigating ongoing workforce change.

Nearly 60% of frontline managers receive no formal leadership training despite the complexity of the role (Korn Ferry, 2025). At the same time, around 80% of an organisation’s workforce is managed by frontline leaders, meaning their capability has a disproportionate influence on engagement, productivity, and culture (Korn Ferry, 2025). When these leaders are underprepared, the impact is felt across the entire organisation.

Organisations are increasingly recognising that leadership capability at the frontline and middle management level is critical to organisational performance. The Institute of Managers and Leaders IML supports organisations across Australia and New Zealand through leadership development programs, professional accreditation, and capability diagnostics designed to strengthen leadership effectiveness across the management pipeline.

Across Australia and New Zealand, leadership capability gaps are occurring alongside broader skills shortages. The Hays Recruitment 2025 Skills Report found that 85% of hiring managers report a skills gap and 91% cite skills scarcity as their top challenge (Hays, 2025). These pressures extend into leadership capability, where gaps in manager skills create broader organisational risk.

At a global level, research from DDI’s Global Leadership Forecast 2025 highlights persistent capability challenges among emerging and mid level leaders. Nearly half of emerging leaders struggle to manage conflict effectively, with 49% failing to demonstrate capability in this area and only 12% showing high proficiency (DDI, 2025). Trust in immediate managers has also fallen significantly, with global trust levels at just 29%, indicating a growing credibility gap in leadership (DDI, 2025).

This combination of capability gaps, declining trust, and rising complexity is reshaping how organisations approach leadership development. For L&D and HR leaders, the focus is shifting from isolated training programs to sustained capability building across the full management pipeline.

Why leadership capability gaps are widening

The role of frontline and mid level managers has changed significantly in recent years. Managers are now expected to lead people, implement strategy, adopt new technologies, and maintain team engagement simultaneously. Organisations are effectively reinventing manager roles, requiring them to balance people leadership, technology adoption, and strategic execution rather than focusing solely on supervision (Deloitte, 2025).

Despite this growing complexity, leadership training for frontline managers remains under invested. Yet these leaders are responsible for engaging employees, executing strategy, embedding culture and maintaining team performance. Without structured development, many rely on trial and error, reducing confidence and consistency across teams (Korn Ferry, 2025).

In a UK workforce survey, 39% of employees reported that their manager lacked sufficient training or skills to perform their role effectively (People Management, 2025). This lack of capability contributes to lower engagement, weaker communication, and reduced performance.

Soft skills are emerging as the most urgent development area. Communication, coaching, emotional intelligence, and conflict management continue to appear as key gaps across management levels (Sinek, 2024; edX, 2025). These capabilities are essential for maintaining performance in hybrid and rapidly changing environments.

Research from Gallup shows that employee engagement and manager support are closely linked. When managers feel unsupported or undertrained, engagement levels across teams decline significantly (Gallup, 2025). Strengthening manager capability is therefore one of the most effective ways to improve organisational performance and retention.

The World Economic Forum’s Future of Jobs Report 2025 also identifies significant capability gaps across resilience, adaptability, and analytical thinking. These are leadership capabilities rather than technical skills, reinforcing the need for sustained development across management levels (World Economic Forum, 2025).

How capability gaps affect organisational performance

Leadership capability gaps at frontline and mid level have a direct impact on performance. Managers shape daily employee experience, influence engagement, and translate organisational strategy into action. When capability is inconsistent, organisations experience:

  • Reduced productivity
  • Lower trust in leadership
  • Inconsistent team performance
  • Higher turnover
  • Slower response to change

Frontline and mid level managers play a central role in maintaining clarity, supporting wellbeing, and enabling performance. When these leaders are confident and capable, teams operate more effectively. When they are unsupported, organisations see reduced performance and weaker engagement.

For L&D and HR leaders, closing leadership skill gaps is therefore not only a development priority but a strategic one. Strengthening manager capability supports organisational resilience, improves retention, and enables consistent performance across teams.

Assess your organisation’s leadership capability

Many organisations underestimate the scale of leadership capability gaps across frontline and mid level managers.

IML works with organisations across Australia and New Zealand to assess leadership capability and identify priority development areas.

Explore leadership diagnostics and capability assessments.

Moving beyond one off training to sustained capability building

Closing leadership gaps requires more than occasional workshops. Organisations are increasingly moving toward integrated development pathways that build capability over time and embed learning into everyday work. Traditional one off training programs are no longer sufficient to address persistent leadership capability gaps (Talenza, 2025).

Managers need structured development that includes:

  • Practical leadership tools
  • Ongoing feedback and reflection
  • Coaching and support
  • Recognised capability benchmarks
  • Learning aligned to real workplace challenges

When development is embedded into daily work rather than delivered as isolated training, capability is more likely to be applied and sustained. This approach also allows organisations to address specific skill gaps across frontline and mid level managers at scale.

Practical pathways to closing leadership skill gaps

Structured leadership development helps organisations address capability gaps in a targeted and measurable way. Many organisations are now adopting staged development pathways that support managers from first promotion through to experienced mid level leadership.

For newly promoted or transitioning managers, foundational leadership development is often the most urgent need. With 60% of frontline managers lacking formal training, early capability building is critical. Programs such as the New Manager course provide practical development for first time leaders, equipping them with essential skills in communication, delegation, feedback, and team leadership. Early development reduces reliance on trial and error and helps managers build confidence quickly.

At the mid level, capability gaps often relate to coaching, strategic thinking and influencing across teams. When mid level leaders report challenges in these areas, structured development such as Management Essentials can help strengthen practical leadership capability and improve team performance.

Organisations are also placing greater emphasis on measurable leadership standards. For those seeking credibility and consistency in leadership capability, professional accreditation such as Certified Practising Manager CPMgr provides an independently assessed benchmark. Accreditation signals that managers meet recognised leadership standards and supports long term capability development across the organisation.

Beyond formal programs, many organisations are shifting toward tailored development aligned to specific organisational needs. Instead of generic training, customised leadership development can be embedded into daily workflows and aligned with diagnostic data. This enables organisations to target specific skill gaps, integrate learning with work, and customise development for frontline and mid level managers’ context.

Strengthening leadership capability for the future

Leadership capability across frontline and mid level managers will continue to shape organisational performance. As roles evolve and workforce expectations shift, organisations that invest in structured leadership development will be better positioned to maintain engagement, productivity, and resilience.

For L&D and HR leaders, the priority is clear. Closing leadership skill gaps requires sustained investment, practical development pathways, and learning that is embedded into daily work.

By strengthening leadership capability across all levels, organisations can build stronger teams, improve trust, and support long term performance.

Build stronger leadership capability across your organisation

Closing leadership capability gaps requires more than isolated training. Organisations need structured development pathways that build leadership capability across frontline and mid level roles.

IML works with organisations across Australia and New Zealand to assess leadership capability and deliver practical development programs that strengthen leadership performance.

Speak with our team about leadership development.

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