Interim Executive Confidential – The Independent Executive
We have seen executive careers take many forms over the past decade. Some of it was caused by economic changes while other times it was most influenced by personal changes. Experienced executives have a number of options when making the next career choice from taking a full-time position, retiring, focusing on board work or going independent as a contingent executive (ie. interim executive, management consultant, advisor or coach).
As much as each of these decisions seemed independent of the other, over the past ten years, we have witnessed executive careers as more fluid, interchanging and often overlapping between these options. At Cerius, we work primarily with the executives who want to work on a contingent basis. We often get a number of questions surrounding what that career choice looks like, what an executive can expect and why executives choose this path. No better person to ask then a large group of executives, so we surveyed our network and want to share the information along with what we are seeing in the marketplace.
Who makes up the contingent or interim executive workforce?
With over 75% of the executives surveyed being baby boomers, it is clear that being independent isn’t just for a retired executive who isn’t ready to play golf full time. Though we are seeing more executives step into this career long before they are nearing retirement age, it is still most popular among executives who have had a successful executive career and are looking to now work independently with various companies who can use their expertise.
This career field is still somewhat new in the United States compared to our UK counterparts for a number of reasons. Our survey found that just under 30% of the executives have been in their career for five or more years compared to over 72% based on a recent survey of interim executives in the UK. The duration includes both consecutive and non-consecutive years as an interim executive or management consultant.
We are seeing a growing demand for interim executives at the CEO and President level. There are a number of variables impacting the top position whether it is family owned, privately owned or publicly traded. From retirement to health issues and even being forced out, the increased demand is reflected in our survey with over 45% of the executives providing that top level expertise. It is closely followed by operations at 41.3%. We were surprised to see technology expertise be more predominant than finance with over 21% of those polled. Finance, sales, and marketing were somewhat even with 17.4%, 17.4% and 17.9% respectively.
Why does an executive do interim or management consulting work?
It was clear from our survey that interim executives love the freedom of this type of work. It provides a better work/life balance than their previous careers and the ability to choose the types of challenges they want. There was also a strong pull to interim executive work for those in the process of looking for their next role (permanent or temporary) and executives who have sold their company or are semi-retired. As most executives enjoy the freedom of interim executive work, over 86% said they would consider a full time position for the right opportunity. This is down from 90% in 2013 and a stark comparison to those polled. Meanwhile, over 90% would recommend interim or consulting work to another executive.
Over the past ten years, we have seen executive careers become more fluid between interim executive and full time employed roles than the prior decades. It no longer is one or the other. As we track executive careers over the past decade we are seeing less of a division and more of a migration from one to the other depending on a number of variables from personal situations, external factors and the need for either consistency vs. variability at any given time. At the same time, the average tenure of a company executive has shortened quite a bit causing some to question how long is “long term employment”.
What does their business look like?
Most interim executives spend much of their time doing business development and securing opportunities. Though the concept is being adopted by more and more companies in the U.S. there is still a percentage of the SMB market unaware that this option exists. When asked about their top sources for securing assignments, the executives said networking was top of the list at 84.7% and referrals also being a great source for 62.8% of the executives. However, the internet is becoming a substantial resource for many interim executives. From online talent marketplaces to social media, over 36% of the executives use the internet as an effective source for opportunities.
Though there is an extensive range of rates for interim executives and management consultants, over 70% of the executives reported client rates between $100-250/hour with the median at $150-200/hour. There does not seem to be a connection between a lower or higher rate and the amount of time spent working on an assignment.
How busy an interim executive is depends primarily on two factors in our experience: how busy they want to be and how long they have been developing their interim executive business. Some key points:
- Just over 50% of the respondents worked at least 2 days a week on an assignment over the last two years.
- On the flip side, just under 30% worked less than 1 day per week.
- This coincides with just over 30% having been an interim executive or consultant for less than one year. For most, it takes time to develop which is one of the factors we see driving the online talent marketplaces.
- Regardless of how much an executive is working, the work/life balance is clearly seen with over 72% of the executive respondents taking off three or more weeks per year. That is no client work, no networking, and no business development.
When asked about their prospects for the coming year, almost 73% of the executives are forecasting 2016 to be better than 2015.
As quickly as the weather can change, so can the life and career of an executive. The good news
is an executive’s career now comes in every shape and size from corporate executive, business owner, start-up entrepreneur, interim executive, management consultant, coach, advisor, board member and the list goes on. At Cerius, we have been educating, advising and placing interim executives for over a decade and look forward to continuing that into the next decade better than ever.