The saying, “one man’s meat is another’s poison”, could be applied to the current fortunes of interims.
After all, a recession, as it is now being called, spells insecurity and even redundancy for some, but may signal good times for the interim manager.
For starters, there’s the obvious freeze or reduction in the number of new permanent posts available in organisations where work nonetheless needs to be done. Talented interims are therefore required to undertake project work and to handle situations in firms that lack experience in certain fields.
Tony Evans, director and former chairman of the Institute of Interim Management (IIM), explains: “There is a ripple effect from the economic situation that has an impact on the interim market. It is a better climate for interims – there is a greater demand for them.
“More people want interims who are involved in restructuring, as they may not have people with the skills necessary to fulfil these needs at the time.”
Vikki Worsley, managing consultant at Hudson, has found that the interim market, which she says was “hesitant” in the first quarter of this year, is now buoyant. But she admits that the interim roles requested tend to be business critical.
“We are not necessarily seeing companies saying, ‘It would be quite nice to do this or that…’ If it’s not business critical, they are not dipping their toes into the market. I have placed a couple of senior candidates who are going in to help with the disposal of a business – clients are looking for people with strong due diligence and Tupe experience in a unionised environment. There are some key things there that you have to get right and that require specialist skills,” she says.
This is a sentiment echoed by many consultants, including Martin Wood, managing director of BIE Interim, who believes interims can provide fast access to an alternative set of skills and will therefore always be needed in tough times. “For major change projects – for the real interim executive – demand continues, whatever the economic situation,” he says.
Darren Wentworth, head of HR at Robert Walters, concurs. Using interims, he says, allows organisations to be flexible and to use specialists to undertake particular tasks. “It can be a lot easier for an interim to come into a business, assess the current situation or business strategy objectively and deliver the required solution. This might involve a restructure or difficult decision that would be hard for a permanent member of the business to make,” he says. “There has been a significant number of interim assignments focused on change and restructure but this should not be regarded as negative, as a number of organisations are working through change and development projects to establish traction for future growth.”
Worsley says the market is “steady” – again, not a word you’d associate with troubled times. Rather than panicking on hearing words such as “recession”, she says the situation has simply led to caution. For example, organisations that had previously called interims in for multiple interviews, only to later say that the post had been lost in a restructure, are now hiring again because decisions have been made and headcounts clarified.
Interim management provider Russam GMS held its summer congress recently. Speakers from institutions such as the London School of Economics and Cranfield School of Management highlighted the opportunities that exist for interim managers as businesses begin to feel the effects of the credit crunch, high inflation and the downturn in consumer spending. Chairman Charles Russam said the immediate future looked good for interim managers – with openings appearing in the public and private sectors across functions such as HR, finance and marketing. Russam GMS’s survey of 7,500 interim managers polled in December 2007 revealed that demand for interims had increased compared with 2006, with the number of assignments and daily pay rates at an all-time high. But the findings also showed that demand for interims eased slightly in December.
Research by the CIPD suggests a less rosy picture. Gerwyn Davies, public policy adviser at the institute, says that the number of self-employed temporary workers, which includes interim managers, is bearing the brunt of the jobs slowdown. “It’s perhaps surprising, given that in current conditions you would think contract staff are more likely to be hired by employers who may be more cautious about demand prospects,” he says.
“From the latest CIPD/KPMG Labour Market Outlook survey, we anticipate a growth in the number of HR professionals but it’s certainly going to be at a lower rate than we have experienced in recent years. Our broad prediction is that prospects for the HR profession are pretty much in line with the UK workforce as a whole,” concludes Davies.
Perhaps it’s unsurprising that verdicts on what’s happening in the interims market conflict. From sector to sector, and from client to client, the situation has been inconsistent, says Beverley Corrigan, manager at Oakleaf Partnership. She has noticed “quite a few” HR functions moving to shared services regionally, most likely for financial reasons.
Corrigan says: “I’m not sure whether there was a decision made at the beginning of the credit crunch, but a lot of large organisations seem to be going down [the outsourcing] route. Also, we are finding the entry-level sector – junior to mid-market – has been busy in the past couple of months. A lot of senior positions across interim and permanent are quite costly and are being challenged. So if people leave, are they going to replace them or disperse that responsibility?
“In financial services,” she adds, “we have seen volumes slow down – but not dry up. But in other areas – public sector and industry and commerce – it has been steady. One trend we have noticed is that companies are looking at interim-to-permanent positions. They check the skill sets and abilities of individuals before they hire them and make them permanent.”
Like Worsley, Corrigan has noticed that more project roles are emerging, with a growth in analytical roles, designed to study a certain area of an organisation before decisions are finalised – possibly to restructure, outsource, or help with downsizing.
“At the moment it’s the more strategic ‘heads-of’ roles, but not in great abundance,” says Corrigan. “The positions that we are seeing more of are the internal recruitment roles. We are witnessing fewer learning and development and organisational development roles – there is less demand for specialised roles in the HR market. The positions that we are getting through are more on the generalist or project side. People aren’t going to grow a learning and development team in this business climate.”
Jo Skipper, head of MDH Interim at Macmillan Davies Hodes, also says there is no definitive theme in the market at the moment. The start of the year saw a thirst for talent management roles, she reports, which was followed more recently by a demand for generalist roles.
“There’s more of, ‘We don’t know where our business is going in 12 or 18 months, so we don’t want to take people on permanently but we still want the job done,’” says Skipper.
She says there is an appetite for senior HR interim roles that attract £700-plus fees a day. Interims with a strong track record can demand their worth, whereas those at the beginning of their career might find their rates are being squeezed.
“Clients may not be happy to pay for the cherry on the top, but will see what they can get for £500 a day. That’s happened over this past quarter. We are having to coach people and [tell newcomers that] they are not going to be able to walk in and get £800 a day now. They are probably going to have to start at £500 and then it will go up,” Skipper adds.
But BIE Interim’s Martin Wood doesn’t think rates are suffering – they are not an issue if the candidate is right, he says: “In fact, our average rate is rising.”
This is borne out by the IIM, many of whose members earn in excess of £500 a day. Evans of the IIM says rates have risen by 5-10 per cent in the past year and will climb further in the next couple of years as demand outstrips supply. Robert Walters’s Salary Survey 2008 shows significant regional variations. For example, while rates for HR interims stayed steady in most of the country, the top rate for a head of compensation and benefits in the Midlands rose from £600 to £700 per day in 2007-08.
So, is the interim management market solely defined by the credit crunch right now? Gail Bell, managing director, Interim Alliance, says that the sector is continuing to grow because there are always business needs that are directly linked to change.
“The market remains risk averse because of the unstable economic climate,” Bell says. “But the main themes remain the same, where clients require executive resources on tap to manage projects in a changing arena.
“The interim market has always been about providing flexible, value-for-money solutions, and that does not change with the market circumstances,” she adds. Rather, at a time when organisations are keen to get the most from every penny, interim management and all it offers is even more relevant.
Bell believes that “the prudent and sensible use of interims” makes particular sense in a market such as this one. “If the climate prompts an organisation to think about its shape, its staff and staffing levels, then a well-commissioned interim assignment covering analysis, creation of potential ways ahead and – importantly – implementation can pay enormous dividends,” she says. “The skills needed to carry out this work are rare but available in interims.”
Bell has also found that, as the interim market becomes more widely acknowledged and understood, there has been a significant rise in the number of permanent senior managers moving into the interim arena. Managers are keen to work on more specific projects and influence business strategy across a range of sectors, particularly in the change management specialism, she says.
“Professional interims will continue to serve clients well. Often in times such as these, a glut of recently released executives might come into the market. While they may have some of the skills, an experienced interim will be used to dealing with demanding clients in challenging times,” says Bell.
Endorsing this, MDH Interim’s Jo Skipper says that HR professionals who have been a manager or director for the past couple of years, and are financially secure, are entering the interim world to get a greater variety of experience under their belt.
“We recently ran an advert [for HR interims] and the phone hasn’t stopped ringing with people enquiring how they start moving into the interim market. Given the credit crunch, there are a lot of people who think that now is a good time to move on. Maybe their organisations are going through a round of redundancies, and they worked through that five years ago and don’t want to again.”
Martin Wood has noted that as the market matures, many good career interims have emerged. “Some are finding their downtime increasing. The supply of aspiring interims is also going up and the quality needed to succeed has reached higher levels,” he says.
Working as an interim can indeed give individuals the opportunity to expand their portfolio, as well as providing a route into tailoring the sort of work-life balance that professionals are coming to expect. Katie Fennemore, who heads the interim women initiative on behalf of Russam GMS to promote interim management as a career, says it can allow women to fulfil their career and lifestyle ambitions and earn more per day than they would in a similar permanent role.
“There are currently more men than women working as interims, but we are trying to balance this statistic,” she says. “With the backdrop of today’s economic climate, there will be more need for employers to use specialists on a bespoke basis, perhaps for only one week a month in areas such as finance, marketing and general management. This way of working can suit professionals who see these types of assignments as beneficial to their lifestyle and career hopes.”
As Gail Bell says: “Times of change, from small to turbulent, are sensible periods to use an interim. The in-house management team has more than enough to do running the business, and hiring an interim for a specified time at a known cost to carry out value-driven projects really makes sense.”
Interim way of working offers better balance
When Beverly Mayle’s husband was approaching retirement, she decided to change the way she worked to give her the work-life balance that would enable her to spend time with him. Inspired by a freelance trainer who had impressed Mayle with her own work-life balance, she quit her permanent role to become a management and HR interim.
“I didn’t want to be in an office nine-to-five every week while my husband was at home,” says Mayle. “So I took the challenge. It wasn’t psychologically easy. Financially, fortunately, it was okay as [we had] a small buffer that didn’t make it a real drop to start with. I had some good contacts and got some excellent assignments right at the beginning that boosted my confidence.
“Interim management is perhaps better suited to those who want the flexibility to handle juggling childcare or looking after other members of their family, or who just don’t want to work flat out. I go with the flow – if an assignment comes up and it appeals to me, then I’ll take it. It’s not an easy ride like in a company where you’re sure you’ve got that job. It can be feast or famine.”
Mayle, who has been an interim since 1999, and was the director of a travel company prior to becoming a qualified HR practitioner, has worked across many sectors, including the Civil Service. Her current role, secured through Russam GMS, is an assignment for People 1st, the sector skills council for the hospitality, leisure, travel and tourism industries.
“I’m happy now that I have a fairly good spread of experience in different sectors,” says Mayle. “I also work as an HR interim for Skillsmart Retail, the sector skills council for retail. One of the briefs was to get the HR department of People 1st fit to be able to offer a shared service to Skillsmart Retail. It’s transformed the whole concept of HR from an administrative function, which it had been for the past two to three years, into being a business partner, actively liaising with management to develop their teams, to recruit the right people the first time and to help with the corporate and people strategies and to mirror those in Skillsmart Retail.”
Mayle says she has found that when the market is down, it can improve the situation for interims because organisations don’t want to take on permanent staff. In any case, she admits: “I could never go back and work permanently somewhere. I thoroughly enjoy each assignment – meeting new people, seeing different places… even if the commute can be pretty ghastly, for three months it has novelty value in some ways. I could never go back into an office and think, ‘This is it,’ every day.”
The global picture
Regardless of what is going on in the UK, the international interim management market has its own trends and drivers.
James Hunt, managing director of Penna Executive Interim, which supplies executive interim managers across Europe, says international trends in interim usage vary greatly from country to country, and are hugely dependent on regional labour laws.
Hunt explains that in France, for instance, because of legal restrictions, businesses could find it quite tricky
to take on a senior executive who is not a permanent employee, which has a huge impact on their ability to use interims.
“We have also noticed that in other countries, notably in Spain and even in the US, the whole concept of using an interim is far less developed than it is in the UK,” he says. “Although there are a number of organisations in the US that do offer interim services, on the whole most businesses there cannot comprehend that a senior person could enter their organisation from the outside and not be a permanent fixture – so there is certainly a process of education that still needs to be employed in particular markets to make interim use accepted.”
Gail Bell at Interim Alliance and BIE’s Martin Wood both say international assignments are “always popular”.
MDH Interim’s Jo Skipper agrees, noting an increase in demand for roles with international exposure. She says: “It could be that companies are going through acquisitions. We are seeing a lot of mergers, and [companies want] interims who have had European exposure. It’s less, ‘We need an interim we can send off to Dubai or Hong Kong,’ and more that a company has merged with two organisations and now, for example, has two European head offices as well as a UK business, and is asking, ‘How can we integrate these?’
“There is a real skills shortage of senior interims with broad international skills,” Skipper says.
See the CIPD factsheet on interim managers