An interim solution?

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first_imgHighlyskilled interim managers are a popular choice for carrying out short-term topmanagement level assignments in all professions from HR to finance. But why areinterims favoured over a permanent solution? Liz Simpson reportsImagine a situation where your organisation’s finance director leavesunexpectedly and you need someone to fill their shoes while you look for apermanent replacement. Or a sudden change in strategic focus has highlightedthe need for a senior executive to head up a new, time-sensitive project, andno-one in the company has the requisite experience. In many scenarios, day-to-day business in today’s fast-paced marketplacecannot wait while you track down the perfect, permanent candidate. Andsometimes that time and expense isn’t the right solution anyway – which iswhere an interim executive comes in. As Digby Jones, director general of the CBI says: “To adapt tofast-changing market conditions, companies have to be nimble and that meansadopting a more flexible approach to HR. Interim management can play animportant role in strategic resourcing, allowing companies to implement change,cover unexpected absences, manage particular projects and offer a helping handin a time of crisis.” The concept of interim management should not be confused with temping orcontingency search. “Think of David James, whose ‘interim’ spell trying tosalvage something from the UK’s Millennium Dome fiasco has helped our industryby flagging up the concept of putting someone in charge for a fixed period tobring about change,” says Martin Wood of BIE – a specialist ‘headrenting’(as opposed to headhunting) firm, which, since the early 1990s, has placedinterim executives in many European countries as well as Australia, India, Singaporeand the US. “Up to 2,000 assignments a year require interim individuals operatingat board level or one layer below. Half of these are covered by executives newto this kind of career,” continues Wood. “These are people who have the competency profile to hit the groundrunning, be immediately credible and have the experience to achieve aclearly-defined and measurable set of strategic objectives. They are notmanagement consultants; they are not brought in to advise, but to get theirhands dirty, staying on average six to nine months per assignment,” headds. According to specialist Russam GMS, whose clients range from British Gypsumto Zurich Financial Services, the size of the UK market for interims is around£5bn (around $7.3bn), growing at just over 10 per cent a year. In the US, experts report a 25 per cent annual growth rate and a potentialvalue of $1bn for the temporary placement of board level interims. Driving thetrend are talented executives whose skills will always be in demand and who wantto blend work with lifestyle issues , allowing them to undertake a nine-monthassignment and then take the next three months off. Plus, the new world of work has seen stakeholders require businesses toachieve even greater efficiencies, breaking down large initiatives intodiscrete, concurrent projects with specific timeframes. This is highlycompatible with engaging project-oriented individuals who don’t require aseverance package, pension rights or handholding when it’s time for them toleave. Of course, top talent doesn’t come cheap and an interim solution is noexception. Tom Friel is the Silicon Valley-based president of Heidrick &Struggles Ventures, which has recently launched a global interim managementservice. Demand has grown steadily over the past five years, predominantly inthe UK, Germany, France and Australia as well as in the US. Friel says: “One model that a number of US firms use to calculate thecost of an interim is 1 per cent per day of the annual compensation package forthe position that the interim is holding. Others quote between 1.5 and twotimes the expected annual salary. Just remember that an interim doesn’t requirethe company to make contributions to a pension scheme, pay for holidays or sickleave or any executive perks.” Some companies do go it alone and hire an interim directly, thereby savingthe 25-33 per cent agency fee. But few recommend this course of action. Chloe Watts, who heads the Interim Practice at specialist UK HR search andselection firm Courtenay HR, says the only occasion she could envisage when aninterim doesn’t work out is when a client chooses not to use a third partyprovider. “As experts in the interim market we understand the differentskill sets these kinds of executives need to successfully complete a project,such as professional maturity and credibility. “When interims walk into an organisation they don’t have long to makean impact. They need to be comfortable with changing priorities and, whileunderstanding the politics of the organisation, have a knack of not gettinginvolved.” A professional provider will also ensure that areas such as tax liabilityand intellectual property issues are agreed upon before the interim begins theassignment. Hiring an interim executive differs from traditional forms of recruiting inmany ways – not least being that a good third party provider can often meet aclient’s needs in a matter of days. When asked for one key piece of advice forselecting an interim to work for your company, Martin Wood of BIE suggests:”When meeting candidates, think of it less as an interview, and more likean audition. Your concerns should be around proven methodology and process.Once you’ve outlined the details of the task, you need to seek proof that thecandidate has done this kind of thing before. “It’s not a question of how many degrees or other qualifications aninterim has – more their experience of handling very specific situations. Whatyou look for is someone who will be effective from day one.” Chloe Watts, of Courtenay HR’s Interim Practice, offers the following advicefor making the most of your relationship with interim management providers: – Challenge the interim provider on their service. How do they source andverify the credentials of candidates in their networks? – Work with individual consultants on understanding your business andculture to help them respond with “best fit” candidates – Have well-formed outcomes so you can say, “In three months I expectx, y and z to have happened” – Agree terms (covering issues such as non-disclosure agreements andintellectual property) prior to commencing a search to avoid potentialmisunderstandings – Feedback promptly after meeting candidates as turnaround times are quickfor experienced interims – Communicate regularly during the assignment and debrief the provider whenit ends so they can tailor their service to your ongoing needs. Case history: Managers’ bonuses are cut if they cannot lead effectivelyIt isn’t lifestyle issues that keep DavidKitchen happy not having a permanent job. After all, this 60-year old HRveteran has worked virtually non-stop as an interim executive for the past 10years. It’s the continuing professional challenge of working in differentindustry sectors for a variety of companies that appeals to him. “As a member of the Institute of Personnel and DevelopmentI need to have an ongoing record of professional development, which I think ismore difficult to fulfil when working for one company,” says Kitchen, whoturned to interim work in 1991 when he found it was easier to come by than apermanent position.Kitchen’s international change management experience was calledupon to integrate various European operations when global engineering giantCharter acquired Howden in 1997. During the one-year project four sites had tobe closed – involving large-scale redeployment, recruiting and retraininginitiatives – which required Kitchen to work closely with the Howden EuropeanWorks Council and local unions.Following Kitchen’s success, the company – which had largelydevolved the HR function to line managers – saw the need to appoint a permanentHR director to continue developing the various systems Kitchen had initiated.Apart from the reward of fresh challenges, Kitchen findsinterim work quite lucrative. He earns around £1,000 a day (approximately$1,455) – sometimes more. “A good rule of thumb is to divide your lastpermanent salary by 100, given that you may be on assignment for half of theaverage 200 working days a year. The agency you are working through willinvoice the client, adding their fee on top of that,” says Kitchen. He adds: “My longest period between jobs was three months,back in 1995, after I completed a 22-month long assignment. I’d been out of themarket so long that my name wasn’t as well-known as it had been previously.”However, there are downsides to this kind of employment.Kitchen points out that new Inland Revenue regulations in the UK mean, despitehaving set himself up as a limited company, his fees are now taxed as salaryand he can no longer take the money as a dividend. Plus, he is liable for bothindividual and employer’s National Insurance contributions – even though he isone and the same person.One thing Kitchen would like to see changed, which somecompanies are now beginning to address, is the chance for interims to receivebonus pay. “More than anyone else an interim is judged by deliverables,yet we are not eligible for the rewards accorded to members of a company incentivescheme,” he says.However, the advantages definitely outweigh the disadvantages,according to Kitchen. “For one thing, being independent allows you to stayaloof from the minor politics that go on in business life,” he adds. I hadto be part of that for 25 years and, believe me, I don’t miss it.”Further informationwww.europeaninternet.comwww.watsonwyatt.comwww.pwcglobal.comwww.wmmercer.comwww.fedee.com An interim solution?On 1 Feb 2002 in Personnel Today Comments are closed. Previous Article Next Article Related posts:No related photos.last_img read more