The rise and rise of interims

Why would an individual choose a way of life with considerably less security and no company pension, holiday or sick leave benefits, where a new assignment must typically be lined up every few months? Faith Glasgow welcomes us to the interim market

Gone are the days of a job for life. It is a paradigm shift which may bring a tear to the eye of those who yearn for security in their work environment; but it has also opened up a whole new way of working for those who relish change and flexibility, with the growth of ‘career’ fixed-term contract professionals – known in recruitment circles as the senior interim market.

The market for temporary staff at lower levels has always been fairly well-established, with a steady flow of mainly young people happy to take short-term work to bridge a gap, or while they decide what they ultimately want to do, or to expand their skills base, or as part of a year travelling.

But as David Angel, director of recruitment agency Michael Page’s Interim Management division, observes, there is clear evidence of growth in the interim market over recent years, and more specifically in the volume of finance professionals in interim management posts. The expanding market has been driven both by demand from employers and by growing numbers of qualified professionals keen to work this way.

What is underpinning this growth? Angel points to the economic downturn in 2001/02 that forced companies to trim their overheads. Since then, he says, ‘economies have picked up, but businesses have remained leaner in headcount terms, partly because technology allows them to, and partly because there is still pressure on the cost base. As a consequence, they’ll generally be more cautious before creating a new permanent role.’

At the same time, without the old ‘job for life’ option, many individuals have opted for (or been obliged to consider) a more flexible approach to their career paths – often striving for a better work/life balance in the process. Most significantly, says David Angel, ‘the stigma of being an interim doesn’t exist any more, compared with, say, 10 years ago, when contract workers were often viewed as “unsuccessful”.’

There has always been a certain amount of demand for ‘stopgap’ staff at a senior level, to cover for maternity leave or illness, or in the event of an executive’s unexpected departure; around 20%–25% of Michael Page’s interim work involves this kind of placement. ‘Even this side of the market has expanded, as the talent pool of available interims has grown – it encourages companies to take this route, rather than sharing out the work internally or temporarily promoting someone less experienced to cover during the recruitment period,’ he says.

But the bulk of the market is for project-based placements. ‘Today, an interim manager may be involved in far-reaching change programmes such as global systems implementations, restructuring, M&A [mergers and acquisitions] and IPO [initial public offering] activity, rapid growth management, turnarounds and programme management,’ says James Watkins, head of interim management at Imprint Search & Selection.

The advantages for the company are not difficult to see: as Watkins puts it, interim managers are increasingly viewed as ‘a flexible and cost-effective means of hiring superior talent and expertise to deliver specific objectives’. Indeed, in many cases, they are looked on as a more hands-on, proactive alternative to consultancies, brought in to implement and manage change instead of simply writing reports about what should happen next.

Moreover, says Sharon Beagley, who looks after interim manager placement in the financial services sector for recruitment agent Robert Half (RHMR), ‘interims tend to be hardworking, loyal and very committed to whatever they’re working on.’ Indeed, adds David Angel, one of the key skills required of interims in management roles is the ability to fit in from day one. ‘They need to behave as though they were permanent employees to get staff commitment and carry the job through,’ he explains.

Against their flexibility, an interim manager may prove somewhat more expensive for the company than a permanent staff member would – though at more senior levels, with generous benefits to build into the equation for permanent staff, there is not much difference. Nor are companies obliged to shell out on additional costs such as training courses for interims, as they would be for permanent staff (though some do).

Cost may have something to do with the 2006 findings by RHMR that interim management is ‘much more popular with large companies’. It is a surprising outcome, says Phil Sheridan of RHMR: ‘The role interims play, in stepping in and solving problems when resources are either not available or tied up elsewhere, fits perfectly within the workings of the SME business model.’

There is little evidence to suggest that interims themselves are mostly ‘making do’ in the absence of anything more permanent, according to the RHMR research. This found that only a tenth of interim managers surveyed plan on being an interim for less than a year; indeed, a third intend to make a full career of it.

But careers can be pretty fluid affairs these days. Angel makes the point that although it would be difficult to enter the senior interim market without the experience, skills and gravitas built up in a previous career in a permanent job, there is nothing to stop existing interims departing. ‘Some go back to permanent work, or set up their own business, or get involved in a management buy-in/out – but a lot of people look on it as the way they want to live their life,’ he says.

What are the attractions? Earnings potential is significant, says Beagley. ‘An interim on a day rate of £500 [the minimum level for managerial posts] for 48 weeks can earn £120,000 a year; the permanent salary equivalent might be around £100,000.’ But a daily rate of £750–£1,000 is quite common for senior managers, according to Angel, and some in key management roles are on twice that and more.

On top of the money angle, adds Watkins, they have real flexibility to build the kind of existence they want. ‘They can balance intensive, time-defined project work with periods spent away from the market, either with the family or focusing on personal goals – hobbies, travel, study, a business interest.’

It is also vastly easier to steer clear of office politics. Indeed, Ahmed Williams, an accountant by training who ‘troubleshoots’ at large corporations on an interim basis for the professional services firm Resources, believes that is a big attraction for both sides. ‘We’re doing a defined job, and it’s for senior management to work around the politics associated with the issue you’re working on – it’s not our responsibility,’ he says. ‘Corporate politics is often at the root of the problems we have to sort out, and it helps to have a neutral third party identify what has to be done.’

Crucially, too, many senior interims find their work very interesting. They are regularly faced with the task of managing change in new, challenging, problematic scenarios – and that is a great deal more stimulating than the routine of ‘business as usual’ in a job you have been doing for the past five years.

Take Katijah Shakur, an accountant who has been working for the last 17 years as an interim in the public sector via the public sector agency Capita Resourcing. Among other jobs, she spent almost five years at the British Museum as project accountant on the Great Court scheme. She has also worked for the House of Commons and is now working under the exotic title of ‘transformation consultant’ with the Home Office.

‘I started off years ago doing mainly financial work, but my subsequent roles and training have covered other specialisations such as programme management, risk management, business analysis and writing policies,’ she says. So would she ever consider a permanent job? ‘I always look for good permanent opportunities, but it’s always ended up that I’m offered very good contracts... in a lot of interesting places and it’s hard to say no.’

Risk

However, there is general agreement that even if you are the kind of person who thrives on this level of variety and intensive work periods, the downside of interim existence is the risk of unwanted spare time between assignments – for which, of course, you don’t get paid.

Williams, for example, worked for a while on his own as a freelance interim. ‘The trouble is that the more senior you become, the more difficult it can be to find the next job when a contract ends – I was relying on my own contacts, and it could take me a couple of months,’ he explains. ‘The advantage of going through a company like Resources is that they can line the next job up for me, so if I don’t want time off it’s easier to roll straight into the next contract.’

What is the outlook for the sector? Angel regards the present market as ‘assignment-led, with more interims than jobs’ – which equates with longer gaps between jobs and potentially lower day rates. Any downturn in the wider economy would exacerbate that trend.

But, as usual, it will be the weaker contractors who are hit hardest. As Watkins of Imprint points out, the call for ‘best in class’ talent is increasing: ‘The very best managers are likely to remain in high demand and command competitive remuneration packages.’

Faith Glasgow is a freelance journalist, writing mainly on property and finance. She has contributed to a wide range of publications, including most of the UK broadsheets, Vogue, Country Life and Investors Chronicle.