July 16, 2008 Archives

A line in the sand seemingly appeared in the economy this past week, cautious optimism would appear to be slipping into pessimism. With British shares narrowly escaping a close in bear market territory. City fund managers are warning the market could halve in value over the two to three years and with the so-called super woman Nicola Horlick saying that we are seeing out the last days of the Roman Empire, with the Chinese economy within the next 20-30 years being larger than the US and London very much competing with New York and new Cities like Shanghai and New Delhi. But in my personal view this is all good news for Interim Managers and the Interim Management provider community.

A lot has changed since the last downturn, there are now very few organisations either in the private or public sector who have not seen the excellent value that Interim Managers can bring to the party in good, and of course, bad times. It is ironic, since recruitment is generally a very good barometer for the economy as a whole, that our parent company Harvey Nash plc is prospering globally across all recruitment streams, be it Executive Search, Contingent, Permanent and Contract and this very much includes our US operations. What organisations are recognising is the value of having the right calibre of manager/employee in place, there is movement/churn but this is a positive thing - in the City we have clear evidence that the Investment Banks might be exiting people out the front door, but there are interim managers and contractors being brought in through the back door. At Impact Executives we continue to trade above last year and as opposed to only certain sectors hiring, we are continuing to see widespread use of interim managers to good effect, across both the Private and Public Sectors. I find it particularly interesting that the Public Sector values interim managers so much that day rates, as evidenced by the IMA Mori research across approx 29 providers, shows parity in day rates with the Private Sector and in some cases, these are even higher in the Public Sector.

When I attended the TMA (Turnaround Management Association Conference) at the tail end of of last year, the specialist Turnaround Interim Managers were anticipating the prospect of significant turnaround work and whilst this will come particularly from the Private Equity community, all this work has not yet materialised... Over 6 months in, we are not seeing evidence of this...positive realignment and restructuring yes, but we are also seeing much positive growth still, despite Mervyn King’s gloom and doom, coupled with the negative media, we are talking ourselves into something that is not as bad as it appears to be - UK plc is not as broke as the media make out. In my office which happens to be our global HQ, last week I did a representative poll across all our businesses and every consultant is working flat out on assignments and whilst there are a few extra hoops to go through with clients, and maybe the extra interview in the process, we remain very positive across the global piste...

So for Interim Managers within this negativity of the nation, there are opportunities - in the CBI/KPMG report published 19 June 'as much as 72% of employers complain that they are unable to fill certain skilled job vacancies. So on average, one in six Interim roles are backfill and compared to a couple of years ago, organisations now rarely use interim managers to just manage the status quo.

The good news is that the number of interim assignments continue to rise, approximately a staggering 8% per quarter with roughly seven out of ten assignments being in the Private Sector.

In the Private Sector Banking and Finance continue to have the largest number of assignments, with manufacturing following close behind.

In the Public Sector local government remains the largest user, followed by Central Government and Health.

Three out of Ten Interim Executives were hired to carry out special projects, followed by HR and Finance roles.

Programme and Project Management continue to be the most popular reason for hiring an interim manager, with over 2 in 5 being used in this capacity, then followed by Backfill or Gap Management, followed by Business Improvement and Change/Transition Management.

For IMA members the average length of assignment is running at approximately 130 billable days.

You may then say ‘evidence this boom in the use of Interim Managers’ - well, I interview and speak to many very talented interim managers on a monthly basis and if last month is anything to go by, they are all very busy and receiving a lot of calls about prospective roles. Whilst there might be a little more show casing by clients...it is pretty bouyant out there - so I am convinced that interim managers will be Kings and Queens (25% of IM's being placed are consistently female) over the next few years!

The views expressed in this blog are personal to Clive Sexton and are not necessarily representative of either Impact Executives Ltd or Harvey Nash plc ...with reference and thanks to the CBI/KPMG Survey 19 June 2008 and the IMA Mori Survey Results from approx 29 members.