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2010/2011 Annual UK Interim Management Survey

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Sponsored by Boyden Interim Management

Welcome to the Annual Interim Management Survey conducted by Boyden Interim Management, and thank you for your contributions.

This year’s survey covers responses from over 700 professional Interim Managers and 100 Client organisations.

2010 appears to have been a much more encouraging year than expected, with 80% of the responding Interim Managers having completed one or more assignment, a pleasing increase on 2009, with over 75% of Client organisations surveyed having engaged one or more Interim Managers and 10% using up to 50 last year.

All data was gathered in December 2010 and early January 2011 and the results refer to the calendar year 2010.

As always we are pleased to share this overview and insight with you.

Patrique Habboo, Managing Partner
Boyden Interim Management UK

The headline results from 2010 are:

  • Growth in the utilisation of Interim Managers during 2010, particularly at the higher end of the market
  • 84% of Clients in 2010 were very positive about their Interim hires
  • There are significantly fewer female Interims registered with Providers, despite them being in demand from Clients
  •  Average day rates saw virtually no change year on year, however, this was due to greater demand for more senior Interims at the £1,000 plus per day end of the scale
  • Although Interim Managers are expected to cost more than permanent employees, our analysis shows that Interims often cost the same or less, whilst being more experienced and overqualified for the same role
  • The Financial Services sector saw the largest growth in demand for Interim Managers, with the Public Sector slipping back
  • Both Clients and Interim Managers demand a bespoke service from providers, simply database matching is not good enough
  • Internet networking sites such as LinkedIn now account for 10% of all Interim assignments, predicted to rise to 40% over the next 3 years

An overview of the Interim Management Market

Our survey reports growth in the utilisation of Interim Managers during 2010, particularly at the higher end of the market where seniority and experience can help organisations in a change phase.

In last years survey many Interim Managers and Client organisations were quite pessimistic about the prospects for growth in 2010 following a recessionary year in 2009. However 35% of Clients were optimistic and 50% of Interim Managers were quite bullish and there have been great opportunities for Interim Managers who have offered Clients the skills needed to help a company through a difficult phase.

“We wanted to avoid commitment to cost during a difficult time for the company and the skills needed at the time of change were likely to be different to those needed as we went forward”

“The market appears to be more active at the higher end whereas I have colleagues at the lower levels who are finding life very difficult”

However for others 2010 has undoubtedly been tough as inevitably redundant senior managers see Interim Management as a quick and easy way to get a paid assignment while they look for another permanent position and many of these are prepared to accept lower day rates.

“I have been an Interim Manager for 20 years and have been fully active for 95% of the time until 2010 when the market slowed”

“I guess it was to be expected but I am amazed at the sheer volume of people fleeing to the Interim market and in so doing the number of Interims who have little or no understanding of the key attributes of a good Interim – focus, value, effectiveness and efficiency”

84% of Client organisations rate the experience of using an Interim Manager as a very, or extremely, positive one

The average number of Interim Managers used by the Clients responding to this survey is 5, with a number taking on 10 or more, up to 50 Interims in the largest organisations. This suggests that Interim Managers are a much valued resource

The reasons given by Clients for hiring an Interim Manager were:

78% - To cover a short term need for specific skills for a project  or programme
6%   - Insufficient in-house expertise
11% - To cover an unforeseen gap in senior management
8% -   Urgent need for new skills within the business
5% -   Needed as a catalyst to drive change
5% -   Need to strengthen leadership capabilities
3% -   Difficulty of recruiting from the permanent market

Key Metrics and Trends in 2010

Industry Sector Demand Patterns

Although the Public Sector remained the highest user of Interim Managers, there was making up lost ground from 2009

There was also a rise in the number of Interim Managers working in the energy sector, particularly in renewable energy sources.

Functional Demand Patterns

Those in demand were Interims who could operations people and the demand for change managers more than doubled.

General management roles reduced slightly as did consulting roles, perhaps an indicator of less emphasis on strategy with more organisations focusing inward on cost control and efficiency gain.

Why Interim Managers choose this career

23% - Variety of Clients and assignments
17% - Flexibility of working i.e. can take breaks
12% - Independence/control of own life
9%   - The remuneration
7%   - Freedom from company politics
6%   - Focus on results and adding value
4%   - Experience of a wide range of organizations
3%   - Better work life balance 

“The one step removed independence, allowing commitment without being embroiled in organisational politics and the opportunity to give objective advice.”

For Interims the attractions of their career choice is primarily the variety of Clients working.

This means that Interim Managers may work extremely hard for 6 months but can then take a prolonged break. The lack of involvement in company politics is also quite high on the list allowing Interims to spend more of their time achieving results on behalf of their Clients.

A typical Interim Manager is male and aged between 50-60 years with fewer than 20% being women of any age, and yet women are more likely to be on assignment and for longer periods than men.

Only 14% of Interim respondents to this survey were women, although 20% of all candidates that Boyden placed in 2010 were women. Since only 15% of the candidates registered with Boyden are women this suggests that women Interim Managers are at least as marketable as men and the Interim Management survey for 2010 found that women were billing 14% more days and 12% more were on assignment, than men. We can think of no reason why there are not more women Interim Managers.

50% of all Interims are aged between 50 and 60 years with only 3% under 40 and nearly 20% are over 60. In the Interim Management market age and experience is sought and valued rather than overlooked.

“New age legislation and the need for longer and creative approach to resourcing and for Providers to be bold in putting forward grey haired alternatives to younger hires”

Average Fees and Day Rates

Average day rates saw virtually no change year on year with greater demand for more senior Interims at £1,000 per day.

The range of day rates reported for 2010 varied enormously from £154 - £2,500 and the average Interim day rate was £728 - up 1% on 2009 and only 2% off the record for the decade of £742 per day.

44% of Client respondents would expect to pay between £750 - £1,000 per day for a director level Interim Manager

42% would expect to pay between £1,000 - £1,500 per day and the average day rate Clients are reporting is £1,058. It seems that despite downward cost pressure in many other areas, Interim Management day rates remain resilient as Clients place experience above cost savings.

Perhaps unsurprisingly the not for profit sector pay the lowest average day rates whilst Financial Services pay the highest. There seems to have been a lowering of average rates in the public sector whilst for manufacturing which was traditionally reputed to pay lower day rates this is no longer the case.

The expectation is that Interim Managers will cost more than a permanent employee but this is often not the case.

We asked Client organisations whether they expected a senior Interim Manager to cost more or less than a permanent employee and perhaps unsurprisingly 83% said they expected them to cost more. Our research however shows that this is often not the case. 40% of Interim Managers in this survey earned between £100 - £150K in their last permanent position and the average remuneration package for all Interims was £130,000. When employment costs such as NI, the average cost of a senior manager / director rises to circa £173,000 equating to a working day rate of £752 only slightly higher than the average Interim day rate.

When you consider that most Interim Managers are training periods, work very long hours and are focused on results, they start to look like fantastic value for money.

The Role of the IM Provider

The Interim Provider marketplace remains highly fragmented, albeit slightly less so that a year ago. Our survey listed 106 different Interim Provider organisations, compared with 138 in 2009, although again there were very few providers placing more than 10 of the surveys Interim respondents.

Boyden, Odgers, Alium and BIE were the top Providers in order of number of placements reported, with Alium appearing on the list for the
first time.

The main reason that Clients choose to work with Boyden Interim were given as:

  • Boyden only work with the top 10% of hand selected Interims giving the best chance of a good match
  • Speed of response
  • Combined Interim and Executive Search

The need for speed of response is illustrated by Client expectations. It is not just taking and responding to a brief that needs to be quick!

70% of Clients want Interim CVs within 3-5 days

73% of Clients expect to have an Interim Manager in company within 2 weeks.

Both Clients and Interim Managers demand a bespoke service from providers, simply database matching is not good enough.

“Employers should have the confidence that recruits from Intermediaries are competent and safe and candidates should be confident that they will be looked after and not be sidetracked by having to do their own credit control for example”

Clients were asked how Interim Providers generally could improve their service and the following were the key suggestions:

21% - Ensure that candidates are a good match, especially re the ‘fit’
16% - Build close relationships with Clients to better understand their needs
13% - Maintain regular contact with Interims and the Client once the project is underway
11% - Consider some flexibility in charging / payment of day rates
5%   - Take briefs and respond to them quickly

“In executive positions 80% of the role is chemistry with internal and external customers therefore there needs to be a greater fit of personalities”

“Placing people on the basis of ‘fit’ is much more effective than a database approach to skills mapping”

“I hope the ‘on-line only’ Interim Service Providers who offer database matching only finally bite the dust in 2011 – they are appalling!”

Boyden’s value to its Clients is clearly reflected in the time taken to understand and carefully match Client needs with suitable candidates.

Detailed knowledge of Boyden candidates means that the response can also be very fast, with potential Interims identified and their availability checked within a day where necessary - and there are no barriers to a permanent position if this is what the Client wants.

“Interim providers shouldn’t be too sniffy about whether candidates are permanent of temporary if they have the skills and availability. This is frequently used as a barrier”

The Interim community, not surprisingly, had different requirements from their Providers as follows:

  • Timely payment of invoices
  • Brand and reputation - being one of the top 3 UK providers
  • Global reach across a network of overseas offices
  • Regular contact via newsletters etc
  • Ease of registration

“In a recession good experienced Interims will always add value and strongly branded quality Providers will increase their share of assignments”

Internet networking sites now account for 10% of all Interim assignments

Whereas in 2009 50% of assignments were via Providers, in 2010 this had dropped to 41% and the 59% of self sourced assignments were broken down into:

Own contacts: 53%
Business networking: 9%
Social networking: 9%
On-line Interim communities: 9%

The remaining 20% included other sources such as Client referrals / word of mouth, own website and direct marketing, being on bank and auditor panels and off-line networks.

Social and business networking sites hardly featured in last year’s survey but our analysis suggests that Interim Providers may have lost out recently to this new source of Interim assignments.

Future Trends for 2011

Far from being a sluggish market, both Clients and Interim Managers are optimistic about the level of Interim assignments in 2011

Cost cutting and austerity measures, particularly in the public sector, coupled with uncertainty in the private sector may not sound like a great start to a new year in the Interim market. However Client organisations responding to this survey said they were as likely, or more likely, to use an Interim Manager or Consultant than in 2010 - only 10% saying they were less likely to make use of this type of external resource. This compares well with the 31% of Clients who were less likely to take on an Interim Manager last year.

When asked about forecasts for 2011 Client organisations gave the following very optimistic responses:

33% - Expect Growth in 2011
10% - Pessimistic re growth for 2011
35% - Investing for the upturn in the market
22% - Expect cost cutting to be a focus for 2011
8%   - Waiting to see what will happen to interest rates / economic growth

“We are expecting a dramatic increase in the need for Business Change Managers and Merger and Acquistion experts”

Three times more Client organisations are optimistic for 2011 and over a third will be investing for growth, a totally different picture to last year when 46% of Boyden Clients said that they were pessimistic about their markets in 2010.

“Turnaround will be the skill set more in demand in 2011”

“In a constrained economy the benefits of Interims who get in, do the job and get out again without long term employment costs needs to be emphasised and the confusion with expensive consultants who are seen as unnecessary costs without real value need to be overcome”

Interim Managers themselves are also bullish about their prospects for 2011 - 60% think that the Interim market will improve during 2011 leaving 17% who think the market is ‘dead’ and 14% not expecting any improvement until 2012.

“It has been dead in the public sector but the pressure to actually do something will force the government’s hand and the lid on the public sector market will start to lift towards the end of the first quarter 2011”

“The outlook for Interims looks positive for 2011 as companies gear up for recovery and the M&A market improves”

“I have seen dips in the market like this over the past 10 years. Demand will return and continue to grow as a sensible commercial choice for Clients”

The public sector is less likely to be the great provider of Interim assignments as in previous years but they are still a good source of assignments.

“The new world of the NHS will mean there are fewer and different opportunities – with much more commercial focus. I hope this means that the best Interims will survive and will restore confidence in this market”

“In the public sector there will be significant redundancy programmes and there are bound to be occasions when Interims are needed to help with this. I expect the Public Sector market to pick up in early 2011 and then slow again in 2013/14 when Local government has been effectively downsized”

37% of Interim assignments are likely to come from social and business networking sites

There was a loose consensus among Interim Managers responding to this survey that while few had actually obtained an assignment from a business or social networking site such as LinkedIn, they were expecting them to become an important source for circa 50% of their work within 3 years.

These sites may of course replace Interim contacts which they used to self source assignments but they may also affect Interim Providers. Search companies are already using LinkedIn as a key resource, if nothing else making research easier for them.

“I use it to recruit other Interims onto projects I lead as an Interim”

“I find LinkedIn to be a key resource – certainly above 50% of enquires come from this network”

“Interim Managers have to be much more proactive nowadays – such as active networking and scouring the Internet for adverts. We can no longer rely on recruitment firms to do the work for us”

Boyden Interim Limited has consistently been a leading provider in the UK and Europe to both public and private sector organisations. As part of the global Boyden network with over 70 offices in over 40 countries, we never cease working to build upon our reputation for delivery, discretion, integrity and professionalism.

Established for over 60 years as a leading executive recruitment and interim management firm, we take advantage of our local knowledge, cultural understanding and industry & functional expertise to retain the best leaders for organisations, throughout the world.

For more information please visit www.boydeninterim.co.uk

Produced by:
Boyden Interim Management
Tel: +44 (0) 207 389 9771
www.boydeninterim.co.uk