Demand for interim managers is on the increase, but whether you’re hiring or looking to move into interim work yourself, it’s not a decision to be taken lightly. Georgina Fuller reports.
The days of interim managers being brought in as a last resort to cover maternity leave or fill a gap in the HR support team are over.
Today’s “career interims” are more likely to be spearheading a major HR project – anything from change management to restructuring – and acting as a business partner to the HR director. And employers have become increasingly willing to pay for the privilege of having a career interim on board.
According to the latest research by the Interim Management Association, the number of interim assignments undertaken in 2007 represented a 55% increase on 2006.
Manage the change
“Many organisations are going through rapid periods of change, whether downsizing or growth. There’s a big need for senior level HR people to help manage that change,” explains Sarah Barwell, managing consultant of the interim arm of Strategi Search and Selection.
And as the market becomes more dynamic, so do the candidates, according to Lynn Walker, interims consultant at Courtenay HR recruitment.
“The concept of career interims has really taken off,” she says. “A few years ago it was retired people who wanted to continue working for a while. Now interim managers are much younger, more ambitious and dynamic.”
HR in particular is making good use of interims, especially when it comes to specific projects where they might not have the expertise in-house.
“It’s more commercially astute to have an interim with a specific area of expertise working on a project,” says Stephen Dixon, global head of talent at Dufry Management, a retailer. “If, for example, we’re reviewing our reward policy, we’ll buy in a reward expert to oversee it.” Walker agrees: “Employers are often hiring beyond their own capability as they may not have the right person on board to do a particular job. It may be a very sensitive project, such as downsizing, where they want an impartial, experienced and external person to lead it.”
However, high demand means many interims can name their price. Interim managers earn an average of £550 a day (anything from £250 to £750 a day at the top level).
“Interims can cost a lot of money but it won’t affect our headcount budget and it’s usually on a short-term basis,” adds Dixon.
Walker says that such rich financial rewards mean HR directors are finding the prospect of project work increasingly attractive and that the interim recruitment market is becoming more competitive as a result.
“HR directors are coming to us to ask how they can become an interim and what sort of skills and experience they need to do project work,” she says.
But with interim assignments typically lasting between three to nine months and the ubiquitous credit crunch starting to bite, can organisations really afford to shell out such huge costs?
The current economic climate could actually work in favour of interims, Barwell reckons. “Interims might be the best solution for employers as they don’t affect the headcount budget,” she says.
There are other incentives too. Alistair Cook, director at HR recruitment firm Digby Morgan, says the flexibility that interims offer is a big plus for HR. “Employers can cherry-pick the best person for the job at peak periods and have total flexibility. It will depend entirely on supply and demand.”
Laura Hands is manager at Frazer Jones HR recruitment firm. She says that an interim can bring a fresh viewpoint and experience of dealing with a similar situation, which the HR director may not have. But they have to be able to hit the ground running.
“Interim managers have got to start delivering straight away on any given project and show the results on a daily basis. They have to be very resourceful and not mind being held constantly accountable,” Hands says.
The rapid turnaround for recruiting an interim is also seen as a big advantage to employers, according to Barwell. “If an organisation is acquired by a competitor is could take six months to find a senior level recruit. It only takes 48 hours with an interim manager and they can start making an impact immediately,” she says.
The impending recession could also mean that interim managers have an even broader range of projects to work on in addition to the more traditional change management assignments.
“There’s much more of a focus now on learning and development roles, succession planning and talent management. As we see a downturn in the economy I think demand may shift from more generalist HR interim roles to more specialist internally-focused ones,” Barwell notes.
There are, however, some pitfalls around employing interim managers and HR must be crystal clear about what it expects an interim to deliver on any given project.
Harder to manage
Dixon says: “It’s harder to manage interims because they can be much brighter than other employees and they don’t necessarily have the same motivations. You have to give them specific milestones and push them to reach them. “
Walker says that employers must also have realistic expectations of what the interim assignment involves.
“HR directors often just think that they have an urgent requirement for an interim without actually investing the time upfront to discuss what they need and what the job involves,” she says.
“Sometimes the job of finding an interim is delegated to their assistant who doesn’t really know what the project is about.”
Communicating the brief to the interim manager (or agency), setting clear objectives and having regular meetings throughout the project is essential to get the best out of an interim, Walker advises.
Being an interim manager, however, does not suit everyone.
“People can underestimate how hard you have to work and the short timescales you have to make a difference,” Walker explains.
Do it yourself
“The market has become furiously competitive and just saying you want to be an interim isn’t enough. You’ve got to show that you have the skills and capability for the role.”
Hands says that being an interim manager has become increasingly commercial and that new interims have really got to sell themselves.
“If, for example, you’ve worked at Marks & Spencer for 20 years, an HR director might think you’re somewhat institutionalised. So you’ll have to demonstrate how you’ve managed change and delivered on different projects there over that time,” she says.
There’s also a downside to being such a flexible resource. Dixon says that interim managers can be used as scapegoats if a project goes wrong. “It’s much easier to blame an interim than a permanent member of staff or company culture, so they can become easy targets.”
And while the perks of financial rewards, work-life balance, variety and job satisfaction are undeniable, the precarious nature of interim work can cause headaches.
“Not everyone can cope with ambiguity and change and it can be really tricky if you don’t have any previous interim experience. You have to be able to cope with the interim lifestyle and manage what we call a ‘portfolio career’ with lots of different roles,” Barwell says.
Walker says a good interim manager has to be very resilient. “You don’t necessarily make many friends doing interim work. When you have a permanent job you leave a network of people and all the security that comes with it. It can be tough.”
But if you’re earning up to £750 a day, as significantly “more than just a temp”, it might just soften the blow.
The legal situation
Earlier this year, the Institute of Interim Management (IIM) recommended that the Treasury reassess its proposed “income shifting” legislation for interim managers.
Unlike temporary or part-time workers, interims take total responsibility for tax, insurance and other statutory requirements. They are subject to commercial rather than employment law, meaning that they can be threatened with unlimited fines and jail sentences for failing to comply with government regulations.
But the IIM membership organisation is campaigning for fairer treatment of interims. The association says that the nature of “feast or famine” working patterns means that interims will often have to endure periods without any income.
IIM deputy chairman Tom Brass says: “If an interim manager is provided to a client by a large company under a contract, the profits of that company are distributed as dividend by that business, and are taxed by reference to the marginal tax rate of the shareholder.
“However if the interim manager is supplied under an identical contract, but by a company which is owned by the interim and their spouse, the dividends from the resultant profits are taxed at the highest tax rate of the interim manager, not at the marginal tax rate of the shareholder, if lower.”
The introduction of “income shifting” legislation has been deferred till April 2009 and is currently under consultation.
Interim management: how the market shapes up
- 79% of positions are at senior manager or board level
- The average length of an assignment is four to six months for 42% of interims, with 10-12 months being the next most frequent duration for 29%
- 66% of assignments are located in London or the South East, with 9% based internationally.
- 88% say there is no formal evaluation process for assessing the benefit they have made to the organisation
- 67% of interims believe that organisations would struggle without using interim managers
- When they’re not on assignment, interim managers maintain and develop their professional knowledge with the top three sources being: reading professional journals (29%), networking (20%) and attending industry seminars/workshops/conferences (19%)
Source: Chiumento ‘Positively Interim’ Report, May 2008