BACKGROUND: A competent management workforce is crucial to achieve the effectiveness and efficiency of health service provision and to lead and manage the health system reform agenda. However, the traditional recruitment and promotion approach of relying on clinical performance and seniority provides limited incentives for competency development and improvement among hospital managers in Iran. There is limited evidence on the competency development needs of hospital managers in Iran that can guide setting training and development direction. This study aims to identify the competency development needs of three management levels (senior, mid-level, and frontline) in public hospitals and explore the difficulties that managers experienced. METHODS: The study adopted a cross-sectional survey using the validated management competency assessment partnership (MCAP) tool. The MCAP tool, consisting of 82 behavioral items that measure six core management competencies, was distributed to 162 public hospitals in 19 provinces in Iran between September 2021 and March 2022. The data were analyzed using descriptive and inferential statistics including the mean and standard deviation, chi-square test, independent-samples t-test, and one-way analysis of variance. RESULTS: In total, 1051 managers completed the survey either online or on paper. Peer and team conflict, employee performance, loss of skilled staff, and supervisor confrontation were the five difficulties most often encountered by all three levels of managers. The survey confirmed that only a small proportion of managers had the opportunities to participate in formal and informal management-related education/training, such opportunities were much lower for middle and frontline managers (P <
0.001). Middle managers were less confident in their demonstration of the core management competencies than that of senior and frontline managers (P <
0.001). Managers who completed management training organised internally by the hospitals consistently received higher mean competency scores for all competencies (P <
0.001). CONCLUSION: The study provides compelling evidence highlighting the importance of developing strategies to systematically enhance the capabilities of hospital managers, particularly mid-level managers. Incentives to encourage hospital managers to participate in both formal and informal management training, along with the commitment from hospitals to establish mechanisms that build management capacity, support managers, and guide the preparation and recruitment of management positions, are essential.