An elite group of troubleshooters

Interim managers used to be much like stand-in teachers in schools – parachuted in to cover absences by the permanent staff, only to disappear and be forgotten as quickly as they arrived.

But the market for interim managers has changed. Rather than plugging gaps, they are now experts, brought in to tackle business-critical projects. According to an Ipsos Mori survey conducted on behalf of the Interim Management Association, the number of interim management placements increased by several hundred in each quarter of 2012.

Jason Atkinson, chairman of the IMA and managing director of Russam Interim, an interim management firm, says the industry is worth £1.5bn, with most of its private sector assignments in banking and finance.

“The market has grown by 93 per cent since 2006,” he says. “Interims are experts coming in to do essential roles around change management – people who can get a project back on track, do transformational projects, big merger and acquisition work, restructuring work, regulatory reviews…or handle an emergency situation.”

The new breed of interim executives are an elite group of troubleshooters. Their attraction for employers is a proven track record, combined with a flexible short-term contract. They can be found within days and can typically be asked to leave within days, too – in contrast to the lengthy processes normally involved in executive level recruitment, on-boarding or dismissal.

It is a model that suits economically uncertain times. Nigel Peters, managing director of interim firm Alium Partners, says: “It’s not part of business as usual. Gap-fills used to be the market, but companies tend to take that on the chin now.

“Recently it’s more for discrete projects, taking costs out, M&A, transition integration, etc. A FTSE100 company, for example, sold off part of their business in the form of a management buy-out. We placed an interim executive to help them do that, undertake the transaction, and he is now helping the new management team with driving costs out of the new organisation.”

Meeting new regulatory requirements has also been a big driver for the use of interim executives, particularly in the City of London. Mark Davies is chief executive of Grovelands, a firm that predominantly places interim managers in the banking and finance sector.

It started trading in October 2009 with just two staff and is already up to 70, placing hundreds of interims. “There has been a big push towards using interim executives for problem issues and for regulatory investigations, in particular for very big projects such as Solvency II and Basel,” says Mr Davies.

These are people who have done it before and can – in theory – get things done faster than a permanent member of staff. Some of Grovelands’ executives, for example, are already Financial Services Authority “approved persons”.

Mr Davies argues that senior interims are often of a higher calibre than the client – especially smaller businesses – would be able to attract on a permanent basis. “They tend to get somebody who is more experienced, has seen a broader spread and who can make an immediate impact, fix things, and move on.

“We had someone join us who had been legal director at one of the large banks and before that had been compliance director at the regulator. Through us he joined an insurance broker as its worldwide risk director and resolved quite a lot of regulatory issues. He’s been there for 12 months and we’ve just agreed he’ll stay for another six months.

“They are in the process of slimming the organisation down and will, at the end of it, probably recruit a permanent member of staff for a slightly smaller job.”

The length of a placement can vary from days to years, with the IMA reporting an average period of 152 days, although 12 months is common.

For the client, it might seem costly: the average wage of £400 a day rises to £700 in financial services, with some reaching four figures. But Mr Peters says: “If you take a permanent executive’s basic salary and then add a bonus, a pension, a company car, the headhunting fees, sick leave, and so on, I would say any project short of two years is a saving.” The risks are also reduced, he says, as notice periods for interims are “between five and 20 days”.

It means interim executives are a tough bunch. Mr Atkinson describes them as “super interim project managers” who will have picked up battle scars: “They can be upfront with the board and the senior stakeholders, be very strong, thick-skinned and resilient. They get the job done and move on.”

About 40 per cent of Russam’s placements are now women, compared with 10 per cent eight years ago and the average age is falling – although weight of experience remains crucial.

Being an interim is no longer part of a retirement plan or a redundancy fall-back; it is a chosen career path for those that enjoy big, short-term challenges. But it is unclear whether the increased use of interim executives is a sign of things to come, or more a sign of the economic times.

New graduates: a chance to ‘try before you buy’

Interim executives are hired for their business experience – but this does not mean there are no roles for new graduates.

The answer depends, to some extent, on terminology, as some graduate interims are starting to occupy places once filled by generally lower skilled temporary staff, especially in banking and finance.

Mark Davies, chief executive of Grovelands, an interim firm in the banking and finance sector, says graduates account for 30 per cent of his placements: “We’re providing probably about 250-300 graduates on a contract basis to very large regulatory and mediation projects.

“Things like fraud identification, ‘phishing’ scams, accounting projects – anything where you need somebody just starting out on their career who is professional, bright and able to learn really quickly to work on a repeatable task that can get done again and again.

“We’re seeing people take on young graduates, typically for about six months, train them for a week or so, and they are usually up to speed after three weeks.”

“We had one client who took on 10 graduates, trained them up on fraud detection and prevention, and had them working on that for about five months. In that case because the graduates were so good they offered seven of them permanent jobs across different functions. One of our clients describes it as a ‘try before you buy’ system.”

Mr Davies argues that such interim placements benefit both parties: “I think it’s a wholly good thing for graduates.

“What it is replacing is the normal temp market. Clients are saying to us that when they bring in temps they are not quite sure of their quality or commitment, and so there is a huge amount of churn.

“With graduate interims, because they’ve gone through a selection process and they are looking for a longer-term job, there is typically very little churn, they are highly competent and get on with the job quickly.”

Graduates themselves seem to agree: a Recruitment and Employment Confederation report recently found that graduates “are seeking more flexible options and companies feel they must offer flexibility to attract the best talent”. Perhaps “try before you buy” is working both ways.