· 6 min read · Features

Is the interim market growing or shrinking?

Published:

Four reports paint a very different picture of the interim manager market. It's not clear if it is growing or shrinking, if day rates are rising or falling or public-sector contracts are increasing or decreasing. Which survey should HRDs trust?

Back in August, football's controversial rating system endorsed by England boss Fabio Capello rated unknown Blackpool player Luke Varney ahead of Wayne Rooney as England's best striker. The explanation was that the so-called 'Capello Index' was only judging one week's performance. But the 'error' dramatically demonstrates how statistics can leave those trying to interpret them scratching their heads.

Interim management is probably as far removed from the Premier League as you can get, but those analysing the ups and downs of the interim playing field are also sending out mixed messages. The Interim Management Association (IMA), the Institute of Interim Managers (IIM) and providers such as IMS Executive and Russam GMS are respected surveyors of this industry. In the past two months all four have published market forecasts. But if these are brought together for comparison, as HR magazine has done for the first time here (see 52), the only clear thing about them is that they paint an even more abstract picture of the market rather than a definitive representation. There seems to be major differences of opinion about what the state of the market is at the moment - growing/not growing; day rates increasing/decreasing; public-sector contracts increasing/decreasing. They show just how difficult it is for HRDs (and interims themselves) to know which surveys to trust. Which is the truest indication of what's really happening and which are just talking up the market?

The latest IMA Market Audit, carried out by Ipsos Mori, gathered data for every assignment completed across various industries between April 1 and June 30 from across the IMA's membership. The latest statistics show how volatile business can be quarter to quarter. The private sector now takes 52% of roles, up from 48% in the first three months, yet banking and finance's share of private assignments is down from 43% to 34%. This time it is the chemical, biotech, pharmaceutical and retail sectors experiencing growth. The need for HR interims, it says, has increased, accounting for 13% of all assignments (12% in Q1), while the need for special project interims fell to 22% (from 37%).

"This is a small sample and we are seeing a lot of short-term movements in the statistics," admits IMA chairman Paul Botting. "The share split between private and public-sector work could widen as we see Government cut costs." As for the 8% drop in the overall number of assignments, Botting says this occurs from time to time and is nothing to worry about.

While the IMA figures report public-sector assignments down, the Russam GMS bi-annual survey suggests interim positions here are holding up and that pay is stable. Its snapshot study claims day rates in local government rose 6% to £549 between December and June. The Russam GMS numbers also say HR specialists are in greater demand in both the public and private sectors, with their daily pay rate rising by 11% to £614. Pay is also up for interims working in engineering, by 10.5% to £504; and manufacturing, by 5% at £540.

The manufacturing sector has been a tough one for interims. John Wilson, head of manufacturing at Russam GMS, describes the past couple of years as dire.

"The difference between the IMA stats and ours is the source. We question our large database of registered interim managers rather than providers so you will get a different bias to many answers," says Russam GMS chairman Charles Russam.

More than 1,000 interims - 91 of whom are HR interims - responded to the latest survey. "You can get wobbly findings from time to time so the bigger the sample the more accurate the picture," he adds.

He accepts that individual interims can lose confidence if their own personal experience does not tally with the findings of industry surveys. "What respondents are saying is that different bits of the market are behaving in different ways, but the trend is generally up."

The latest IMS Executive Interim Attitude Survey shows clearly the pressure on day rates. A glance through the responses reveals interims are not happy. Many have had to accept cuts of about 25% in their earnings, particularly for public-sector work. Others are holding firm or negotiating differently by agreeing to performance-related bonuses. But the 5th Annual Interim Management Survey, conducted by the Institute of Interim Managers, reveals that few of the interims questioned are as optimistic about the medium-term future as the IMA or Russam GMS results seem to indicate.

Of the more than 640 members questioned between July and August, less than 30% expect things to improve before the end of this year and only half think business will get better in 2011. IIM director and HR interim Ad van der Rest believes the different surveys confirm how important it is that interims and HRDS thinking of hiring them improve their networking skills. "Regardless of trends, the impact on interims is very individual, and improved face-to-face and online networking with HRDs will help them buck a trend," he says. "Waiting for the phone to ring is no longer sufficient."

Julie Waddicor, managing director of Hays Human Resources, says the surveys point to a fragile upturn and to HRDs wanting a more flexible workforce. "Clients are looking for more sophisticated ways to use interims and want niche skills. For HR interims there is work for those with expertise in employee relations and talent management," she says.

Nigel Peters, director of interim provider Alium's private-sector practice, believes the IMA survey is probably the most accurate reflection of what is happening. He is also not surprised by the IMS Executive figures showing that 83% of interims have reduced their day rate this year. "It is my job to discuss with employers the real value an interim can bring to their business, but there is no doubt clients are much more discerning."

It is difficult to get a consistent picture of what is happening because there are many sector differences. Nick Diprose, executive director at BIE Interim Executive, agrees the industry needs to do more to clarify the return on investment argument of using interims. "Providers like us must be more creative when putting interims into the market as clients are getting cleverer at sourcing talent," he says.

In response, BIE is helping one bank client create a more flexible HR model. It now has an in-depth understanding of the bank's business strategy and is generating a pool of talent based on the competencies it requires for its global change management programmes. This ensures it can provide skilled interims when needed. There will be a 75:25 split between permanent staff and interim managers enabling the bank to scale its recruitment up or down as required.

What is unclear from the surveys is whether or not more women are becoming interims. At the end of 2009, 32% of interims were female, according to the IMA, but the April-June audit shows it is now 29%.

Traditionally an interim career was a way for women to break through pay barriers in their sector. What they might not have bargained for are pay differentials between what male and female interims are paid, with some providers saying the difference in day rates is about 7%. "It is not as prevalent in the interim world because agencies usually fix the rate for a role," says Doug Baird, managing director of Interim Partners. "But some men earn more in industry and take that differential with them."

So what about the interims themselves? Alison Brown has been an HR interim for seven years and she says she has been unable to achieve more than £500 a day since the middle of 2009. Clients are asking her to include expenses in her daily rate, which hits her earnings as she is based in North Yorkshire. To try and boost her number of assignments she is targeting more acquisition work, having previously taken on mostly client downsizing and restructuring projects.

"The period between assignments is getting longer," she says. "An accurate survey is needed that determines the true state of the UK interim market. I have lost count of the number of assignments discussed with me which then disappear into the ether." She says one large employer in her area briefed at least four interim agencies with the same assignment and she was contacted by each provider and put forward for the post. She then heard nothing. "I have a circle of friends who work as HR interims and none of us is working at present. I am the only one to have worked during 2010."

Perhaps analysing figures for the interim market is more like scrutinising Premiership football data than we may think. Winners one week can easily become losers the next.

COLLABORATIVE COMMUNITY

Interims can drag themselves out of the current gloom by pooling their resources and working together. Former engineer Richard Ilsley has launched a collaborative online community called Synogis (www.synogis.com) where individual interims share the cost of promoting themselves and pool advice. Interims who are working in the same sector or are geographically linked to form practice groups. There are also personal case studies that clients can access. Membership will be limited to 500 and interims - who pay £25 a month - must be invited to join. "We don't want to just become a database," says Ilsley. "We only want people who embrace the collaborative way of working so they, and everyone else, benefits. We share the costs and the advantages. We are not an agency." One Synogis HR interim is Guy Ellis, director of CourageousHR. "Clients know they are getting career interims because people have to be invited to join by other interims who know you and your work," he says. "I've been involved since the start, although it can be hard to always put in the time to help administer the site, which is everyone's responsibility."