The bigger picture

The
interim market has come a long way over the past five years, and is now
expanding across all sectors. Adele Kimber brings us up-to-date on its present
status

Five years ago, a top-level cadre of a few thousand senior managers defined
the interim management market. They were almost all male, aged 50 plus, and had
worked at board or head of function level in a blue-chip organisation.
Board-level projects or spells covering for senior managers earned them fees of
£800 or more a day.

Today, the interim market has changed immeasurably, and despite a recent
economic slowdown, interim managers are finding opportunities across all
sectors and at an expanding number of management levels.

The battle to establish the concept of interim management has been won, with
a clear recognition both from private firms and public sector organisations
that interims are an important part of the resourcing mix.

The expansion of the market has been fuelled by several factors: the success
of the original interim agencies in establishing the concept in the minds of
top managers; the business opportunities in the sector spotted by traditional
recruitment firms; and a new breed of middle to senior managers, tempted by the
interim lifestyle.

The expansion of the market is undoubtedly good for HR professionals. Recent
research from Mori for agency BIE Interim Executive, shows HR directors are
increasing their share of top-level interim assignments. In research carried
out with chief executives of the FTSE 500 companies, interim HR directors had
been recruited by 13 per cent of respondents, up from 4 per cent in 2001.

Martin Wood, managing director of BIE, says the rising number of senior HR
interims being appointed reflects the changes many firms are undergoing in the
current uncertain economic climate.

"Organisations are seizing the opportunity to parachute top-level
resources into positive and negative situations to move things forward as
quickly as possible," he says.

But despite the positive long-term outlook for HR interims, the economic
slowdown has hit the current market hard. While increasing numbers of managers
vie to find an interim assignment, the demand for interim managers is
relatively low, and struggling to recover towards the heady levels of demand in
mid-September 2001.

The latest figures from Russam GMS show that 48 per cent of interim managers
were on assignments at the end of 2002, compared with 49 per cent in the
previous quarter.

"Ideally, that figure would run at 60 to 65 per cent," says Russam
GMS chairman, Charles Russam. "The highest figure we have recorded was in
June 2001, when 57 per cent were on assignment."

The HR market

The current market is challenging for HR interims. Interim agencies report
patchy demand, with most assignments coming in the public sector, retail and
charities. Demand from banking, IT and telecoms is low.

At agency Chiumento, interim and strategic resourcing director Graham Bird
reports strong demand for HR interims in financial services, retail and FMCG.
He says that despite the long list of redundancies in financial service
companies, his agency is seeing demand for HR interims to fill resourcing gaps.

But the prospects for individuals trying to find an assignment are tough,
due to huge numbers of candidates coming into the market. "If someone asks
me for an HR director or a compensation and benefits manager, I am spoilt for
choice," says Bird.

He points to several HR disciplines in demand: mergers and acquisitions,
compensation and benefits, harmonisation of terms and conditions, and
redundancy projects. "The most successful interim HR managers have three
or four technical skills areas," he says.

HR agency Interim Performers says that in the past 12 months there has been
a general bias towards requirements for downsizing experts and change
management specialists, as well as interim managers specialising in
compensation and pension schemes.

"Clients are increasingly looking for greater skills and experience,
but at the same time putting a downward pressure on pay rates," says Julia
Meighan, managing director of Interim Performers.

"HR interim managers have had to lower their expectations on pay rates
to get interim assignments."

The latest figures from Russam GMS show the average daily rate for all
interims was £473 at the end of 2002, down from £489 in the third quarter and
£511 at the end of 2001. Nevertheless, Meighan reports some positive signs,
with recent enquiries for HR interim managers to carry out recruitment
projects.

"Clients are becoming more knowledgeable about interim management and
are using them more as a strategic resource rather than just for filling gaps
arising from sickness or maternity covers," she says.

At Chiumento, the agency reports a strong swing from assignments covering a
gap towards project-focused roles. Some 70 per cent of HR interim assignments
are for project work, with 30 per cent covering gaps. A year ago, gap work was
easily in the majority.

"In financial services and retail particularly, we have seen slimmed
down HR functions who bring an interim in when faced with a project outside the
normal run of HR events," says Bird.

When Caroline Lawrence, acting senior personnel officer at Walsall
Metropolitan Borough Council, was faced with just such a challenging HR project
– restructuring the legal services department – she turned to an interim HR
manager for help.

"I was concerned about how much support I could give and decided that
the project needed extra input," she says.

Lawrence used agency TMP Worldwide to source a suitable interim manager.

"We needed someone to look at the mix of people, grades of jobs, the
structure of the department, to negotiate with trade unions and to assess how
we recruited and advertised posts," she says.

After critical government and audit reports, the council has been going
through a major restructuring exercise called Re-inventing Walsall, and also
had an interim management board. The consequent restructuring plans at the
council were demanding, and it was essential to deliver results quickly.

Getting the right person was critical. "I wanted someone with a very
specific HR background, public sector experience and good strong negotiating
skills," says Lawrence.

She believes a successful interim project is about finding the right fit.
"I felt that if they hadn’t got public sector experience for this project,
they couldn’t hit the ground running. The interim manager ran the whole project
and my input was to steer him on local issues and monitor decisions," she
says.

"The interim manager we hired is a task-orientated finisher, able to
make a lot of decisions. I was able to carry on with my day-to-day work and
offer much of my input via e-mail."

Public sector

The Walsall experience is typical of a growing trend in the public sector to
turn more readily to external skills.

TMP consultant Emma Taylor says there has been a surge in demand for IMs
across the public sector, with demand for policy projects and many generalist
HR roles in the NHS.

"It is still an emerging market. The public sector is turning to
interim agencies to fill gaps if their rigorous systems mean recruitment takes
time. Historically, the public sector has used people through their own
networks, but they are now looking further a field," says Taylor.

Bill Penney, managing director of Ashton Penney, points to the inclusion,
for the first time, of interim suppliers within the government-run procurement
scheme S-Cat, which simplifies sales of services to the public sector.

Penney argues that this recognition of the sector will increase the profile
of interim agencies and their candidates to potential public sector customers
and provide a fast-track for business.

"Contractual arrangement will have already been agreed, so providing
interim managers to local authorities, the NHS, and government agencies will be
easier. It will increase the take-up," he says.

"It will be a real encouragement for the public sector to think interim
and to use the designated S-Cat providers."

HR director at the London Borough of Kensington and Chelsea, George Bishop,
says he uses interim managers for two reasons – to fill gaps when senior level
local government recruitment has been difficult, and to carry out specific HR
projects.

He used an HR interim to look at the structure of the personnel function at
the local authority and decide how it could be reorganised into an integrated
function.

"I wanted an interim with an outside background to look at ideas
independently," Bishop says. "The benefits were clear: a specialist knowledge
and expertise, an external view and someone to challenge the accepted
thinking."

He argues that finding the right interim managers for the public sector can
be difficult to get right.

"I was looking for someone with drive and energy to achieve things.
They are there to manage an outfit, drive a project, have sensitivity and
social skills," he says.

"They must also have project management skills – managing their time
and my money. And they need an exit strategy, the ability to hand over the
management and a project report."

Making it as an interim

Interim agencies report a flood of skilled managers keen to try out the
interim life, causing a huge surplus of talent. But these agencies are wary of
professional staff tempted by interim work because of redundancy or failure to
find a new permanent job.

At Praxis Interim Management, registrations from would-be interims were up
400 per cent in the past few months. Managing director Patrique Habboo says the
agency rejects 70 per cent of new applicants because they lack the commitment
to become an interim, not because they lack skills or experience.

"These people are very different from the professional interim who goes
into an organisation with blinkers on to deliver his targets," says
Habboo. "Professional interims are not there to prove themselves and have
no emotional baggage. Nor are they going in with the objective to create a
permanent position for themselves. One of the biggest concerns of employees in
an organisation is that an interim wants to create a job for themselves."

Chuimento’s Bird argues that HR interim work must be a positive career
choice for HR professionals. Those likely to make a success of it are attracted
by the work-lifestyle balance, and are also confident about their own ability.

"The best interims put their reputation on the line and feel
comfortable with the uncertainty about what will happen when a project comes to
an end," says Bird.

"Successful HR interims are now much more likely to have resigned than
to have been made redundant. A few years ago, the classic HR interim manager
was male and over 55. Now we are seeing younger people and a huge increase in
the number of women," he says.

The Interim Management Association (IMA) cites the levels of continual
professional development (CPD) undertaken by interims as evidence of a pool of
committed managers. Its latest figures show that 60 per cent of interims had
undertaken CPD in the past year at an average of 14 days per person per year.
Just over half of the training – 54 per cent – was in managerial and personal
skills, and 30 per cent covered technical skills. Some two-thirds also say they
plan to undertake technical or managerial skills training in the next 12
months.

Interim agencies

As the number of would-be candidates increases, so too does the number of
agencies claiming to offer interim staff. In 2000, there were 30 to 40
companies in business, but now, as much of the traditional recruitment market
dries up, many search and selection companies are entering the fray.

The IMA reckons that up to 300 agencies claim to deal with interim managers.

"We are in competition with other companies who are flying flags of
convenience," says Clive Bennett, chairman of the Irma’s marketing
committee.

The number of operators trying to get into the market can cause confusion
for both HR interims and recruiters dipping their toe into the market for the
first time.

"If you are recruiting a project manager or filling a gap, make sure an
interim provider has a history and a database. Ask what sort of support
services go along with the assignment. Remember that an interim needs a clear
brief, timescale and delivery mechanisms," Bennett advises.

The huge expansion of interim agencies is creating a competitive marketplace
and playing a part in blurring the edges between pure interim and conventional
permanent resourcing.

Many well-established agencies are keen to hang on to the idea of a
high-level, high-price market. But others argue that interim management is a
subset of the general resourcing market, and can cover many types of
assignment, both full and part-time. "Interim management should not be
seen in isolation," says Russam.

"It is one way of bringing people into the organisation. Being on or
off the payroll is irrelevant."

At transport consortium, Trans4m, HR manager Mike Wilmott has embraced the
wider definition of HR interims and recruited three: one to cover a secondment,
one to carry out a defined project and a third who has moved from temporary to
permanent status.

His first experience was when he recruited someone to cover his own
nine-month secondment from parent company Seaboard to set up an HR function for
start-up Trans4m.

The success of that first arrangement, organised through agency Interim
Performers, led Wilmott to recruit two more interims into the HR team at
Trans4m. The first was needed to work in a traditional HR role at the start-up,
which soon became a permanent position. The second interim has just been
recruited to oversee a six-month resourcing project for the organisation.

Wilmott says it is important to understand the motivation of the interims.

"We have recruited HR interims in very different circumstances and they
have different outlooks and ambitions," he explains.

"You need to recognise that interim managers are different to permanent
recruits and can be put in at the deep end. They do not need any induction
training, they are ready to go on day one and are quite adept at finding their
own way.

"You must realise they are resourceful and trust the professionalism
they bring. You are paying interims a premium, so you need to expect more of
them and give them a free rein."

How to be a successful HR interim

– Display a record of achievement in a variety of HR roles

– Offer a range of technical HR skills

– Demonstrate good project management experience on your CV

– Be able to make a quick contribution to business decisions

– Offer the drive and energy to complete a project

– Show sensitivity to internal client issues

– Exhibit high motivation and self-sufficiency

– Commit to interim management as a career choice

– Develop self-marketing and sales skills

– Keep technical and management skills up-to-date

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