Permanent hires have reached a low, but that doesn’t mean employers have stopped recruiting. Seasoned interim expert Nick Robeson explains why interim managers are wise buys in uncertain times.
The credit crunch is already having a big effect on hiring staff. Latest figures from the Recruitment and Employment Confederation show that the hiring of permanent employees is falling for the first time in almost five years as confidence is sapped across the labour market. In other words, when the economy looks uncertain, people hunker down.
This has led to an increase in companies taking the interim management option more seriously, not just to fill last-minute gaps, but also to provide new direction and impetus in these challenging times.
Layers of expertise
The interim management industry is worth more than £2bn in the UK. It is made up of layers of management expertise, from independent directors acting like modern-day non-execs, to operational managers adept at handling crises, turnaround programmes or projects.
It’s now an exception to find an organisation with a £50m-plus turnover which has not, at some point, used an interim executive. I believe we are in for another period of growth, borne out of tough times. And there are compelling reasons why this should be the case.
Consider this potentially business-saving solution for a firm facing immediate challenges. An interim executive is typically in place within two weeks, often over-qualified for the job in hand, owned by the organisation and while being resolutely objective, will always do what is in the best interests of the company.
Organisations can be wary initially and their first interim purchase is often in distress. But so often the added-value quickly becomes clear, making an interim the first option while a permanent replacement is found.
All this becomes more acute during economic downturns: Employees tend not to be looking for a new job, feeling it’s safer to stay put the talent pool starts to freeze up businesses don’t want to add to their fixed costs so are wary of hiring more permanent staff. The option to bring in a highly experienced executive on a day-rate basis becomes increasingly attractive. And after a decade in this business, I’ve never known the level of talent among interims to be higher.
Many organisations will also be looking at their wider performance rating as economic pressures grow. You might argue that they always have this under close review, but when the spotlight falls on any organisation in this kind of climate, the first thing they start asking is: ‘Where can we perform better?’, ‘Where can we cut costs?’, ‘How can we deliver sooner on a programme or project that is delayed or is taking time to close out?’
Delays can mean the focus moves away from managing existing customers better and winning new business, which is what they must do to survive. Suddenly scrutiny falls on all the individuals in the organisation and whether they are adding real value. If they’re not, then the likelihood is they will be exited from the business – leaving key capability gaps and a stretched management team. There is little time for executive search, a process that can take up to six months, so interim management becomes extremely attractive. It’s talent management on demand.
A cut too far
The last recession, in 1991-92, was one of the recognised catalysts for the interim management sector. It was very early in the profession’s evolution and a lot of senior managers found themselves in the marketplace because organisations needed to cut back hard. They cut to the bone and a bit further, then realised that they needed to bring people back. In an enormous number of cases they re-hired the very people whom they had just fired on a contract basis.
Now however, modern, lean and efficient companies need talent on tap. There are currently 10,000 interim managers in the UK, 2,000 serving the executive or board. Over the years there has been continual improvement in the abilities of people choosing to enter what is now a profession in its own right.
Today’s interim manager is no longer the ‘redundant company man’ of the late 80s, but the experienced portfolio executive with exposure to many businesses during their 15- to 25-year permanent interim career. Many will have been involved in the successful sale or purchase of a business, but most importantly – during these uncertain days – they will bring energy and focus to each assignment that allows them to engage quickly and deliver operational change at pace.
If, as the doomsayers would have us believe, we are heading into another full-blown recession, then this could be groundhog day for interims.
Many interims will have worked through the previous downturn in the 1990s, and their skill and experience will be ever more keenly sought out.
We have you covered
- Wide choice of management expertise
- Personnel in place within two weeks
- Work for the best interests of the company
- Bring energy and focus to each assignment
- Can provide new direction and impetus
- More than qualified for the job in hand
Recruiter view: why interims are a sound investment
Marcus Glover, managing director, Proactive HR
“It’s worth businesses considering the opportunities that this period of uncertainty presents when looking at their current workforce. Professional interims are a great solution without long-term commitment – whether you need to finish a project, bring in specialist skills or replace a permanent leaver. You can use a professional interim for as short as a week to up to two years, with short notice periods, so you can control your commitment. Once your need has disappeared, so too does the cost.
As for the interims themselves, this type of market is a great opportunity for those looking for a more flexible approach to working.”
Jo Blissett, director, Interim Performers
“While there has been significant publicity about the strength and performance of the UK economy coupled with stock market worries and consumer confidence, we’ve seen an increase in the use of interims to deliver HR and change projects. In uncertain markets many organisations rely on interims for a number of reasons: costs can be directly managed and there are no additional overheads normally associated with recruiting permanent employees interims are highly experienced at delivering tailored business results to boost business growth and efficiency. What’s more, using interims means you get direct access to highly skilled experts with a proven track record of delivering results to critical timescales.”
➤Jo Skipper, head of MDH interim
“The business world has definitely changed, and these changes are set to continue. The job of a successful interim is to ‘parachute’ in and assess, advise, support and direct a business into a better position than it was prior to the start of an assignment. The credit crunch requires companies to review their operations to reduce their cost base, or drive improved income performance, so an experienced interim is perfect to support these projects. There were many lessons learned after the last downturn that extended the HR profession. There is now much greater understanding as to what makes the people aspects of business more successful, be it talent management, retention, career planning or engagement. Many of our interims are now sharing their expertise with businesses, for them to be in a better position as the economy picks up again.”
Jenni McCann, partner, Frazer Jones
“As would be expected in a market where permanent headcount is harder to come by, instead of seeing a downturn in the use of interims, we have noticed a marked increase in opportunities both on a short-term temporary and contract basis. The increase in roles has been seen at all levels of the HR market.
At the mid to senior level, with a large number of organisations going through major restructures affecting HR, we have seen a greater requirement for consultants with expertise in change and project management. There is also a demand for people with global and international experience who can deliver results quickly. With both clients and candidates across all sectors reporting frustrations with recent headcount constraints, we would expect that this increase in the use of temporary and interim staff will continue until the market stabilises and confidence improves.
Matthew Reaney, director, Jam HR Solutions
“Corporate nervousness around the global economy is providing a significant opportunity for interim managers. The credit crunch may result in organisations being more cautious in recruiting permanent employees, so using an interim manager is an ideal solution. Organisations may be wary about creating permanent roles that might present them with expensive and painful redundancy problems but are still faced with the challenge of improving organisational efficiency and delivering change. Interim managers are increasingly viewed as a flexible and cost effective solution in response to the delivery of specific business objectives.
This means organisations can respond rapidly to changing market dynamics while retaining a leaner structure and although the day-to-day cost may appear high, when you remove the standard executive benefits package from the equation the cost compares very favourably with that of a permanent employee.”
Nick Robeson is chief executive of Alium Partners. He has more than a decade of experience in interim manager recruitment and was chair of the Interim Management Association (IMA) from 2004-08. He led a management buyout of Boyden Interim Management in 2003. The company has since rebranded as Alium. He remains actively involved with the IMA.