Doug Baird is managing director of Interim Partners, a provider of interim managers to the private sector.
How has recession changed the interim executive sector?
It has focused clients’ minds on what they want from an interim manager, and that boils down to a very specific set of skills. That is good news for interims with in-demand specialisms, for example turnaround or cash management expertise in the manufacturing sector, and financial services interims with experience in risk and compliance. Before the recession, very successful generalist interims tackled different roles in different sectors. That is much rarer now.
What has happened to pay rates?
Pay rates for interims have held up surprisingly well. Businesses are still willing to pay good rates for an interim candidate with the right fit. Interims with sought-after experience, such as project managing Solvency II preparations for an insurer, or integrating retail banking units, will get a very attractive rate. There is more downward pressure on rates coming from interims themselves, who are sometimes willing to reduce their rates to keep their pipeline of work full. That does have a knock-on effect. Following large scale redundancies in some sectors, interims have also faced competition from former permanent staff looking for work.
Who are now the most active users of interims?
Big companies are the heaviest users, with financial institutions using them most. Big businesses are always adapting to change and they need specialist managers to deliver their programmes. Turning to an interim was accelerated by the recession, when businesses wanted to avoid taking on permanent staff, and is now deeply embedded. If anything, their use of interim managers has increased since the recession. Other sectors using interims actively since the recession include business support services, such as outsourcers, and the private healthcare market. Private-equity-backed smaller businesses also still use a lot of interims, as the PE houses like to bring in fresh perspectives.
What about the public sector?
Demand and rates have fallen in the public sector as austerity has started to bite. Central government departments have seen the biggest fall in demand, but usage has not stopped completely. The health service and local government have fared much better and remain active users of interims. In the NHS, new demand has been created by merger and acquisition activity between hospital trusts, when whole teams of interims are used to deliver integration.
What type of expertise is in demand?
We are seeing high demand for interim chief executives and chief finance officers, who can inject momentum. Cost-cutting expertise is also sought after. In financial services, banks with substantial exposure to distressed assets are using a lot of interims with collections and arrears experience. Regulatory change also continues to drive demand, so experience of Solvency II or Basel III projects is valuable.
Has gender balance changed?
In the third quarter of 2010, the proportion of female interims peaked at 39 per cent, but stood at 31 per cent late last year. Over the long term, we’re seeing an increase in the proportion of women interims.
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