Interim management market overview: Demand is anything but temporary

What is an interim manager?

A senior-level professional working on an independent basis for a limited period of time, with operational control over a project, team and/or budget. They range from project manager level to chief executive.

How long have they been around?
20 to 30 years
What sector uses them the most?
Manufacturing
Where are interim managers not used?
In a strictly professional capacity – such as doctor or lawyer
How much do they charge?
Day rates start at £500 and as much as £2,000. Average rate is £537
When should they be used?
To advise on and implement a specific project
Are there any alternatives to using an interim?
Consultants

There is a war of words going on between interim managers and management consultants. Many consultants see themselves as having greater strategic muscle and that the interim’s role is more one of implementation. Interim managers disagree, saying they have just as much strategic clout as a consultant.

“Interim managers say there isn’t much difference between themselves and consultants,” says Charles Russam, director at interim management provider, Russam GMS. “Consultants wouldn’t agree. They think interim managers are more routine in what they do. However, interim managers are basically doers and can perform a lot of the work that consultants do and they can cost just half or a third of the price.”

Price isn’t the only advantage of using an interim manager over a consultant, according to Emma Brierley, chief executive of resourcing company, Xchangeteam, and author of Talent on Tap: getting the best from freelancers, interims and consultants.

“Consultants usually advise and don’t have operational control,” she says, “whereas an interim manager will go into a company, give advice and then implement it.”

Temporary confusion

What this debate shows is that there is a lot of confusion about what interim managers do. This is partly because the role and profile has changed a lot in the past 10 years.

It all began in The Netherlands in the late 1970s when Dutch employment legislation was so tough that organisations began hiring senior people on a temporary basis. UK employers followed suit in the 1980s, making greater use of temporary staff to carry out specific project work when they were experiencing employment issues of their own – namely two major recessions.

Not that it was called interim management back then. Brierley says the sector has gone through various name changes – ‘head renters’ being one of the more outlandish labels. The sector has also gone through huge change in terms of what it offers.
In the beginning it was mostly about filling vacancies.

Nick Robeson, chief executive of Boyden Interim Management and chairman of the Interim Management Association, says: “Classic, good old-fashioned interim management was stop-gap work, covering sudden departures and maternity cover. Now it is more about project and programme management. Interim management these days is where someone is owning a project or team or budget.”

So many organisations are going through huge amounts of change and interim managers are often called in to effect those changes.

Interim managers are also a more diverse bunch these days. Whereas 10 years ago it was a primarily male sector, populated by 55- to 65-year-olds, there are now more younger practitioners and more women. Russam says that roughly 40% of his organisation’s jobs now go to women, with HR being a particularly popular choice.

“Women tend to focus on HR first, then finance and then marketing,” he says. “Men, however, go across the piece – although you do get more in manufacturing, engineering and sales.” Russam thinks women like the flexibility that the profession affords them, enabling them to combine senior-level work with family life.

Youthful experience

The average age of interims has dropped as people are moving into the sector mid-career rather than in the latter part of their career, as before. A recent survey by recruitment company Robert Half Management Services, shows that 57% of candidates are under 50 and 20% under 40.

However, Russam says his company’s latest survey of the market indicates that an increasing number of interim managers in their late 40s are moving back onto the full-time payroll, which has been good news for professionals in their 60s, he says, as “they have taken up the slack”.

Many interims do dip in and out of permanent work during their freelance career. And this flexibility is what attracts a lot of people to the sector in the first place. That and the money, of course. A typical interim manager will earn around £100,000 a year working through their own limited company. Working about 160 days in a year, the average day rate is 537.

Of those on Russam’s books, only 50% tend to be on an assignment at any one time. Whether this is representative of the rest of the market is hard to tell as overall figures are elusive and it is difficult to even establish how many interim managers there are.

Robeson says: “It is a question we are always asked, but there is no real data to give a firm answer. There are probably about 10,000 dedicated, full-time interim managers in the UK.”

The market is reportedly worth between £300m and £500m annually, depending on the definition of interim management. There are about 300 providers, but Tom Brass, secretary of the Institute of Interim Management, says that most assignments don’t register on its books.

“A lot of interims don’t work through providers,” he says. “Probably only a third of assignments are put through them. The rest come through networking and personal marketing.”

What is certain is that the market is growing. How much, though, is not so clear. Robeson says the consensus is that the market is growing by 16% to 17% at the moment, after a slowdown during 2000-2002.

“It now looks like it’s going to be a booming year in 2006,” he says.

However, Russam believes that most predictions are overly optimistic. “The market probably isn’t as big as people think it is or growing at a huge rate,” he says. “It is growing, but at a steady rate.”

According to Robeson and Russam, manufacturing makes the greatest use of interims. A recent Boyden survey shows that manufacturing accounts for 22% of the market. “Manufacturing has been so screwed down by costs that they are down to a very small core team,” says Russam. “So people who have been made redundant come back as interim managers.”

But, recent research by interim management consultancy Praxis, claims that the public sector hired the most interims last year. Its survey says government bodies accounted for 20% of interim work, followed by financial services at 13%.

Russam agrees that the public sector is a good market for interims. “Because of rumblings in the public sector about the costs of consultants, there is a very strong message being put across the public sector about using interim managers instead,” he says.

Promoting themselves as a viable alternative to consultants is what interim managers, providers and bodies such as the Interim Management Association need to do to ensure demand grows. It is all about self promotion, says Brierley.

“They have to educate the marketplace on what they can achieve, demonstrate success and be able to measure performance.”

That, she insists, is the best way to increase market share and keep taking the work that would otherwise go to consultants.

Interims analysed by professional discipline

Disciplines	Dec-05	%	Full-time	%	Part-time	%
General management	344	31%	108	27%	62	40%
Finance	188	17%	91	23%	19	12%
Sales and/or marketing	133	12%	37	9%	33	22%
IT	90	8%	42	11%	9	6%
HR	90	8%	37	9%	11	7%
Other	84	8%	27	7%	10	6%
Purchasing and/or distribution	79	7%	34	9%	3	2%
Production and/or engineering	72	8%	17	4%	7	5%
Not specified	13	1%	5	1%	0	0%
Total	1093	100%	398	100%	154	100%

Interims on assignment by discipline

Function	Dec-05	%	Jun-05	%
General management	166	31%	158	28%
Finance	109	20%	107	19%
Sales and/or marketing	68	12%	60	11%
HR	48	9%	53	10%
IT	48	9%	48	9%
Other	42	8%	43	8%
Purchasing and/or distribution	38	7%	44	8%
Production and/or engineering	24	4%	36	7%
Total	543	100%	549	100%

Source for tables: Russam GMS Interim Management Snapshot Survey, December 2005

HR interim market

The HR interim market is buoyant. According to Heidi Waddington, director of national temps at Hays recruitment, demand has recently escalated.

“The market has more than doubled in the past year and has probably increased by 300% over the past three years. We have noticed a huge growth at all levels,” she says.

Chairman of the Interim Management Association, Nick Robeson, thinks the HR market is growing by about 12% a year. The Praxis research also found that the number of HR departments taking on interims had risen from 10% in 2004 to 17% in 2005.

As a function, HR knows how to use this resource and makes particular use of interims to oversee specialist work such as talent management, putting in appraisal schemes and downsizing. HR functions are so streamlined these days that interims are called in to fulfil specialist roles and effect change. It is also common to use interim managers to fill vacant HR director roles or to take stop-gap roles.

For more on interim management go to:

The right person for the job – when is the right time to employ an interim?

Try before you buy – how four HR directors use interim managers