Interim Executives: Myths, Misconceptions, and Realities (Part 3)
Here are some of the most common myths and misconceptions we hear about interim executives.
This is an excerpt from our new book The Executive Search where we break down the myths of interim executives.
“I Don’t Need That Much Horsepower” or “This Candidate Is Overqualified”
For starters, there’s no such thing as overqualified or too much horsepower with interim executives.
As long as the rate matches the engagement level, it does not matter that an executive has previously been a COO and is now willing to step in as interim director of operations. This hang-up may be a valid concern if you were buying the car, but in a lease situation, it is completely irrelevant. When it comes to interim executives, in fact, getting more than you’re paying for is generally the point.
There are a number of reasons why interim executives are willing to take on a less demanding interim role (and interim rates). Some have reached a point in their careers at which they’ve had enough of long hours and frequent traveling and wish to slow the fast pace of their hectic career. Others seek to work fewer hours with fewer responsibilities. If you have been a CEO for more than ten years, stepping in as a COO can be a fun and enjoyable assignment. Also, an interim role is explicitly not permanent; it is not a five- to ten-year commitment. It is usually four to nine months.
Even though a candidate may be traditionally “overqualified,” most interim roles offer the potential for a great deal of challenge. In the majority of cases, someone with extensive experience and perspective in the C- suite may be just the right choice to be the hands-on, day-to-day individual helping the team through a tough project or a rocky time. Experience, a.k.a. “overqualified,” matters and can translate to savings of both time and money.
“…the company will gain more from what the overqualified interim executive can accomplish in a short period than it would from an appropriately qualified candidate in the longer term.”
Other reasons for interim availability include looking for a career change.Particularly at the management and executive level, it becomes increasingly more difficult to find a new position the higher you go, other
than where you have spent most of your career. Taking a job for which you are “overqualified” in a new
industry is not uncommon. Regardless of tenure, the company will gain overqualified interim executive can accomplish in a short period than it would from an appropriately qualified candidate in the longer term.
Overqualified executives are uniquely positioned to impart experience and knowledge and leave it behind when they depart the organization and its employees. This will be a more and more from what the more common pattern as the baby boomer generation exits the workforce.
Overqualified executives can bring innovation, efficiency, and maturity to the company, resulting in thousands, if not millions, of dollars in increased revenue and productivity as well as cost savings. It is wise to consider that talent while it’s still available—before your competitors swoop in and take it. It is a win-win situation for both parties and a big asset to hiring companies.
“An Interim Executive Is More Expensive Than a Full-Time Executive”
It’s no hidden fact that interim executives are more expensive on an hour-by-hour basis than the base salary of a full-time hire. But the good news is, this is an apples-to-oranges comparison.
In situations where the role may not require someone full-time or long-term (but the organizational practice is only to hire full- time employees), consider this. When you compare the full package of hiring and recruiting costs, plus the time it takes for a new executive to settle in, an interim executive almost always turns out to be less risky and less expensive.
For example, the day rate for a part-time president may be $1,600. If you were to extrapolate based on the daily rate only, you would incorrectly assume the executive will cost $416,000 per year ($1,600 × 260 workdays).
But the interim executive introduced in the auto lease example only cost the company $196,100 over a 2.5 year period he was not on-site and working every day of the year. For this size company, by contrast, the average, fully burdened (salary, bonus, profit sharing, benefits, taxes, etc.) cost of a full-time president would be an estimated $450,000. The return on investment for the company was more than twelve times the cost of the interim.