Question:
When I think of Britain, I think of a dominant global empire. Was this not the case? Was Britain completely incompetent outside their navy? With respect to WWI.
Short Answer:
Not incompetent, more like their greatest strength, at least during the first few years of the war, became a significant liability, the Empire. Unlike most of the other great armies in Europe, the British army was employed prior to war. It was used to police and maintain the empire. It was already a smaller force, although a professional one. It was saddled with a legacy manpower need entering a war which the other great nations did not share. In a time when technology and a lack of matching tactics would deem greater numbers the paramount value.
Answer:
Just prior to WWI, the British Empire was at the height of its power and global influence. It encompassed about a quarter of the world. It was the Worlds largest economy, the leading industrialized base, and of coarse the worlds largest Navy. And yet the British standing army, including reserves was small relative to France, Russia, and Germany. The British army just prior to WWI in 1914 including reserves consisted of 975,000 men. About a quarter of France and Germany's forces, and about 17% of that fielded by Russia. Although Britain would ultimately out mobilize France during the war from 1914-1915 the British Expeditionary Force consisted of only 6 divisions or 250,000 men. Given France suffered 250,000 casualties (80,000 deaths) during 1 battle, first battle of the Marne (Sept 12, 1914) you can clearly see the problem.
Why was Britain so understaffed? Britain employed a small professional army to police it's empire. When WWI broke out it didn't negate the need for that police effort, remember Ireland war of Independence, Australia had an active Independent movement, Britain had fought two wars in South Africa in the last few decades, and South Africa's Boer population were culturally Dutch, German and pro German in WWI. India with a population greater than Britain could not be neglected either. Britain could not send their entire force to the Continent to fight WWI, many were already engaged in work important for the Empire.
Then what exposed BEE's manpower issue which might have been mitigated by experience, training and professionalism was the unprecedented carnage of WWI. Military technology had developed(**) since the last great power war, but Military tactics to overcome such advances had not. Thus the nature of WWI exasperated the lack of manpower in a time when the war was placing an overwhelming priority on manpower.
(**) Not only had the machine gun come of age, but also because of the science had revolutionized the production of nitrogen necessary for the manufacture of munitions and explosives. No longer were industrialized nations limited by their access to guano (bat shit) to produce munitions, now such countries could produce unlimited nitrogen out of thin air. see Habar Process