Interims hit by downturn

The demand for HR interim managers specialising in recruitment and retention
has been damaged by the economic downturn, but those specialising in
restructuring and downsizing have benefited. Ben Willmott reports

Demand for HR interim managers fell significantly last year as UK employers
reacted to the economic downturn, a survey released exclusively to Personnel
Today shows.

The study of more than 1,200 interim managers published today shows that
demand in different sectors varied significantly compared to the previous year,
as companies’ priorities changed in response to the new market conditions.

The Praxis Interim Management poll reveals that HR, which was the most
popular function for interims during 2000 – when it made up 18 per cent of
assignments – dropped to 8 per cent last year. The research also reveals that
the type of HR expertise in demand has moved from recruitment and retention
activities, such as compensation and benefits, towards change management and

Praxis managing director Patrique Habboo believes the findings show interim
management can act as an accurate indicator of the economy’s health.

"What has been particularly interesting are the trends that have
emerged, with well over a third of our interim managers involved in
cost-cutting exercises, restructuring and downsizing, business turnaround and
one-off commercial projects, such as preparations for sale and actual
disposals," he said.

"Previous findings had shown the opposite – projects around recruitment
and retention, growth of market share and acquisitions. Interim management
really does seem to reflect the general economic climate."

Interim manager Robert Purse, formerly HR director for Railfreight
Distribution and the Fire Service College, agrees that the economic downturn
has led to changes in the way employers use HR interim managers.

But he thinks reward specialists are just as important in an adverse
economic climate as when business is booming.

"Clients are tending to be more selective. Whereas in the past there
were a substantial number of generalist posts available, clients now tend to be
looking for more specialist skills," he said.

"These may well be change management, but could equally be compensation
and benefits related because some companies are taking advantage of the current
situation to review their compensation and benefits strategy. They want their
rewards structure to be competitive, but they don’t want it to drive them into

The study shows IT interim managers scored 10 per cent of total assignments,
down slightly from the past 12 months – a figure that possibly reflects the
postponement of some projects. In contrast strong growth was registered in
areas such as business turnaround, which made up 13 per cent of assignments,
and the management of major one-off large commercial projects, which comprised
6 per cent.

Habboo believes these areas proved increasingly popular because both are key
requirements in a downturn. But he also thinks the trends are an indication of
the more strategic use of interim managers.

The study found there was increasing demand for finance directors as
companies were faced with the need to embark on cost reduction programmes and
tightening of financial controls. The percentage of interims working in this
sector amounted to 20 per cent of assignments – the highest in the individual
sectors covered by Praxis.

Finance directors with proficiency in several languages, as well as
pan-European experience in mergers and acquisitions, fund raising, joint
ventures, investment appraisals and implementation of financial systems were
particularly in demand.

Just over half those surveyed worked at daily rates of more than £600, with
some of the highest rates found in areas such as business turnaround and large
commercial projects. More than 80 per cent of turnaround specialists and about
70 per cent of those working on large commercial projects achieved daily rates
of £800 and over.

The important role played by interim managers in toughening economic
conditions was also revealed by an increase in the length of assignments last
year. The study reveals that more than half of all assignments lasted between
six and 12 months, with a further 12 per cent exceeding a year. Only 16 per
cent of assignments averaged less than three months and 19 per cent three to
six months.

Industry sectors emerging as making the strongest use of interim management
were financial services, pharmaceuticals, retail and utilities.

Habboo concludes, "The message is clear, our clients still have a need
for highly experienced expert executives to continue delivering shareholder
value. The use of interim managers allows them a cost-effective means to do so,
without adding to their fixed cost base".

Kathryn Riley, formerly HR director for the RAC and with six years
experience as an interim manager believes the current economic climate means
there is even more pressure on interims to be able to deliver results.

She said: "You have to have an ability to be parachuted into an
organisation and start making an impact in the first couple of days. You have
to be able to analyse a situation, decide what needs to be done and then follow
it through and initiate it."

Interim life draws the young

Younger female HR managers are opting for life as an interim, or freelance
manager, according to research.

More than half the interim managers on the database of consultancy
Chiumento, which specialises in HR placements, are under 50, with the
proportion in their 30s rising from 8 per cent a year ago to 12 per cent now.
The proportion of women shot up from 33 per cent to 40 per cent. The results
were released last month at a seminar held by Chiumento.

Melanie Adams, a 36-year-old interim HR manager who has had placements at several
blue-chip companies, told the meeting: "Some people think of an interim
posting as being a ‘temp-to-perm’ deal after they have been made redundant. But
real interim management is a career choice."

She said that opportunities for interims often arise in women-dominated
personnel departments because of maternity leave. In one posting she helped
cover for four key HR staff who were on maternity leave at one time.

Graham Bird, director of interim resourcing at Chiumento, said: "The
population of interims used to be 50-plus executives who had been made
redundant. That is certainly not the case now."

Another recent survey by the Interim Management Association revealed that HR
is the second most populous discipline among interim managers, after finance.

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