HR Interim Management: Is it time to take the interim plunge?
Steve Hemsley, December 21, 2009
The number of HR professionals leaving permanent jobs to take on interim roles is rising. Is this really the best time to do it?
The start of a new year is often reason enough for professionals to consider where their careers are going. Add a recession into the equation, though, and the temptation to up-sticks and find something safer is even more compelling - and HR professionals are no less immune than anyone else.
In fact a survey by online intelligence company XpertHR claims one third of HR professionals who left their posts in the past 12 months did so by choice. The report puts staff turnover in the HR sector at 15.1% with 5.2% resigning - up from 4.5% in 2008. With CIPD membership up by 2%, it is clear these people are not leaving the industry entirely. What does seem to be happening is that many of those who have left are deciding to make a lifestyle decision by shifting from a permanent role to setting themselves up as an HR interim.
It is difficult to know exactly how many HR professionals are seeking to become interims, but with interim agencies (see below) saying more candidates want to be added to their books, is now really the best time to become an HR freelancer?
According to the Institute of Interim Management (IIM), the HR interim market is worth between £80 million and £100 million a year. HR constitutes about 10% of the total interim sector, but this has actually declined by about 20% since the start of the recession.
It points to life as your own boss being erratic at the very least. So what is the true picture?
IIM director Ad van der Rest is an HR interim himself through his company, Visible Goal. He says work is still around for those seeking this lifestyle but what he is more concerned about is what he calls 'cowboy interims' - those who are entering the marketplace with extensive HR experience but who are unaccredited and uninsured. The IIM only accredits members if they have professional HR qualifications and experience, are covered by professional indemnity insurance, have examples of assignment achievements and references from clients and are continuing their own professional development so that their skills remain up-to-date.
"Some HR professionals have simply been made redundant and are looking for temporary roles and are calling themselves interims," van der Rest says. "But it takes a lot of work and energy to set up your own business, sort out your branding and get an accountant. Employers can confuse interims with contractors, so employers must look at people offering solutions to their problems and not those simply presenting a list of previous HR jobs."
That said, van der Rest insists HR directors should not be put off becoming an interim if they genuinely want to establish their own business. Specialist areas career HR interims can exploit as the upturn accelerates include change management, restructuring, mergers and acquisitions, employee engagement, performance and talent management, as well as learning and development.
One problem for new entrants is that they can find it particularly tough to win their first assignment. The advice from the experts is to accept a lower than average day rate to get a foot in the interim door and to nurture relationships with potential clients and recruiters cultivated through networking. Andrew Pope, a director at interim provider Kingsley Search, says HRDs need to time their arrival into the interim world carefully.
He says: "I did advise someone not to leave a permanent role because, as an interim in a recession, you are a commodity and the supply and demand ratio is not in your favour. There are lots of long-established HR interim managers waiting for their next assignment and many clients still automatically look at these first."
However, a study by talent management consultancy Ochre House reveals there are still opportunities for interim newbies. It has discovered the highest level of demand for interims is at HR business partner level, paying an equivalent permanent salary of between £40,000 and £60,000. Those particularly in demand are interims with change management experience.
Intriguingly the study suggests full-time interim managers are actually in danger of being ousted by the growing number of redundant professionals. Ochre House finds 70% of organisations recruiting interims to fill short-term senior vacancies would actually prefer someone who has just come out of a permanent role rather than a longstanding career interim, because they have not had time to get blase about what they provide.
The Interim Management Association (IMA) also believes now is a good time to consider an interim career. Its view is that employers and agencies are looking for new talent. In contrast to the IIM, the IMA says up to 30% of new interim placements are HR-based because of the skills needed. It says this has been the case irrespective of the recent economic climate.
But the IMA does make one point absolutely clear: "There is not much demand for people who are just 'dabbling' at being an interim," says IMA chair Paul Botting. "Over-qualification is what good interim placement is all about and clients want people with scar tissue from a long career in HR."
For HRDs who do decide to take the plunge, finding a reputable interim agency can be difficult. The recession has enabled providers to become much more choosy about who they take on.
Raj Tulsiani, CEO of Green Park Interim & Executive Resourcing, says his company only accepts about 15% of the people who walk through its doors, and it uses strict psychometric testing to assess candidates. He says interims have had to accept lower day rates. For top-level generalist HR interim roles these have dropped from about £1,500 a day to £1,000 in some cases and at the lower end of the market from £750 to £550. "Some people made redundant or who have resigned have got bad career advice about how attractive it will be as an interim," says Tulsiani.
Similarly, Kate Mansfield, a managing consultant at independent senior interim provider Alium Partners, says only people with broad experience and a depth of marketable skills will succeed as interims. Alium takes on about 10% of the people who ask to register. "Ideally we are looking for people with at least one interim assignment under their belt, their own company and who are looking at a long-term interim career," says Mansfield.
BIE Interim has about 400 HR professionals on its books. Executive director Nick Diprose says he has now become "very careful" about who he registers. "As an interim you need credibility and to be able to make an impact personally and professionally," he says. "The HR function has taken a hit this year and there are fewer interim posts. The demand is for ex-HRDs who can really add value."
Actual demand for HR interims has flattened off significantly over the past 12 months, by as much as 50%, according to Gareth Jones, managing director at Courteney HR. He says some day rates have even fallen to as low as £300. "Even interims who we know have had continuous work for years are coming out of the woodwork saying jobs have dried up. Others have had to take roles that are not really challenging them," he says.
Such negative stories can easily put off HRDs considering making the leap into the interim world.
Catriona Drysdale, head of interim at FreshMinds Talent, hopes the current climate will not deter people who would make very good interims. She says her company saw a 350% increase in demand for interims during October and early November compared with the previous year, even if day rates were lower. "Anyone who is a great networker and who has the skills to impress even the fussiest employers will make a success of an interim career," says Drysdale. "Even if you are new to the market and do not have a history of interim assignments you can still package the individual projects you have managed during your permanent career."
Over the next few months, as the economy creaks along, HRDs considering life as an interim will need to weigh up the obvious lifestyle benefits of being their own boss against whether there is a real demand for their skills at this time.
THE BROADER MARKET
Research by interim specialist Russam GMS indicates the market is improving, although there is unlikely to be another boom in demand any time soon. Its snapshot survey of 9,000 interim managers reveals although interim activity fell by 4% in the six months to June 2009, this was better than the 11% decline experienced by the industry in the previous half year. The recession has meant fewer jobs, more competition and a squeeze on daily rates, but the research paints a less negative picture for 2010.
"Our latest research at the end of December is expected to show the rate of decline has continued to slow," says chairman Charles Russam. "The recession mood is still there but we seem to be getting closer to a recovery." Because of the recession he says interims have realised the importance of networking. "Between 40% and 50% of work comes through agencies in a downturn and the rest from an interim's own personal endeavour. HR directors considering entering the market will need a very strong network." The survey reveals average daily pay rates for permanent HR interims was £563 in June, down from £592 last Christmas, a drop of 4.8%. However, part-time HR interims saw their pay increase from £594 a day in December 2008 to £615 a day last summer.
Former group HR director of technology company Telent Nigel Baldwin had been considering entering the world of interim management for three years before he took the plunge last year.
Telent was the name given to the former Marconi businesses not bought by Swedish telecoms company Ericsson in 2006. Baldwin had a chance to move to Ericsson but stayed to oversee a massive change programme at Telent that included closing and relocating a number of sites. "When this job was done I felt I needed to do something different so I came to an amicable agreement with the company to move on and I began my interim career last summer," says Baldwin. "I read documents on how to be a good interim and I ticked all the boxes. I was good at building relationships, had a breadth of skills and I wanted to feel independent." He adds: "I made calls every day to set up meetings with interim agencies and recruitment companies." Baldwin has formed his own limited company called People Advantage and registered with interim provider BIE Interim. His first interim role was with distributor RS Components. "I realised I had to play to my strengths to win work in the recession around restructuring and cost reduction and helping businesses with trade union relationships. I cannot see myself going back into a permanent role."
More than £100 million in efficiencies and cost reductions for his employers is a proud boast and one that Reitze Brouwer is confident will mean he enjoys a long and successful interim career. He has 10 years' international HR leadership experience behind him and speaks five languages - something that should help him win international work. He formed Reitze Brouwer HR Interim Management and Consultancy in July 2009 after leaving his post as HR vice-president total reward EMEA at SAP Software. He is also a former global resourcing manager for BT. "Six months before starting as an interim I realised there were opportunities in efficiencies and cost controls. However, like most people I misjudged just how serious the recession would be," he says. "Most of my work has been as a consultant because interim management is a real struggle if you have only just started. You still have to prove yourself and build relationships with agencies." But his expectations for 2010 are positive. "There is a lull in the interim market as much of the work around restructuring has been done. We are now all waiting for companies to have more confidence to invest in HR again."
Kevin Fisher has just started his interim career but is still in two minds about whether he should leave the permanent world behind forever. After being made redundant from his 12-year role as group HR director of marketing services business at CPP Group, he has spent the past few months enjoying more time with his family. He is now keen to win his first interim role and has registered with provider Russam GMS.
"I have researched the interim market in depth and have talked to those who have made the leap and to agencies. But I must admit I am looking at permanent roles too," he says. From talking to agencies Fisher has noticed a change in what clients want from HR interims. "Before the recession, if you came to employers with a strong set of generalist HR and management skills, they would be less worried about sector experience. Now they want industry experience too."
HOW TO FIND NEW INTERIM WORK
Two years ago Ruth Manning decided to return to the world of work as an interim in the financial sector.
As a chartered accountant and with a successful senior management career behind her with employers including HBOS, she expected the offers to flood in. When they didn't she went searching online for help.
"It was hard to get well-balanced advice because many interim agencies paint a very rosy picture of the market and tell you how easy it is to make a successful career as an interim," says Manning. She decided there must be others in her position who needed help both to find interim work and to market themselves to potential clients.
Her response was to set up a website called Plato's People (www.platospeople.co.uk) which is a database that matches candidates with employers looking for interims.
"This is an additional networking tool for interims who want to get more work directly rather than involve agencies," she says. "The site is particularly useful for new HR interims who do not have a history of success and are finding it hard to break into this market despite their experience and skills." She adds: "My site is not trying to sell a dream. It is giving practical help to people considering becoming an interim and those finding it tough."
HR interims can add their CV to the Plato's People website free of charge while employers pay to search by postcode, key words or sector. Employers can also post assignments.