The Best Kept Secret for North American Business Is Out – Interim Management Executives
Interim management executives are one of the most sought-after professionals in the business world, and organizations can rent their expertise as needed.
In a beautiful British accent, the caller on the other end starts the conversation with, “So what is the hang-up with Americans and the use of interim management?”
As an owner of an interim executive firm in the United States, all I could respond with was, “you’re preaching to the choir.” That was the first of two conversations I had in a single week in which I was asked why businesses in North America [both U.S. and Canada] have not adopted a staffing model so widely used around the globe, especially in Europe.
In fact, a 2015 survey by a European alliance of major corporations (Transition Management Group) on current management trends found that interim executives are becoming a big favorite among companies on the continent. They interviewed 400 CEOs and found that 72% support and are at ease with an interim management model, while 55% of executives had already used interim leadership.
Who are Interim Executives?
Interim management is not a new concept, but its use was not common anywhere two to three decades ago. Back then, interim executives didn’t exist in great supply; people tended to work at the same company for decades and retire with the gold watch.
But that’s all changed. Now, interim managers are one of the most sought-after professionals in the business world, and organizations can rent their expertise as needed. They are able to bring skills and background into the company for only the duration it is needed.
What is Driving the Adoption of Interim Executives?
From the standpoint of companies who use them, some of the top reasons for the increased adoption of the interim executive model are:
- Lack of bandwidth
- Lack of expertise
- Increasing cost of employees
- Speed of placement and results
Our observations are borne out by studies in the marketplace. A 2016 presentation by NERA Economic Consulting outlines a company’s economic reasons for choosing alternative work arrangements. The independent contractor marketplace allows employers to achieve:
- Increased efficiency through a project-based workflow
- Greater agility in responding to fluctuating demand
- Better performance through output-based compensation
- Lower costs through employee-owned assets
The recession also left a big mark on business owners when it comes to heavy overhead costs and the need for flexibility with talent. Talent remains the cornerstone of business, but today, the talent is more flexible and scalable through each stage of the business growth cycle. And startups are being built from scratch around the philosophy of, “how large can I grow the company with as few employees as possible?”
While pre-recession thinking said, “I must own my employees,” post-recession thinking says, “I just need to rent the expertise I need, when I need it.”
Portable Benefits Also Support Interim Staffing Solutions
As health coverage becomes more portable and American legislation catches up, independent contracting will continue to go from an appealing work arrangement to an increasingly realistic arrangement for more and more Americans.
Companies like Etsy are creating benefits tied to the employee, rather than the employer, which then follow the individual regardless of what company they work for or work arrangement they provide the services. As these and other supportive trends in benefits continue to develop, highly skilled workers will be empowered to leave full-time employment arrangements for more autonomy and better work-life balance.
Why Interim Management as a Career?
I often hear the question, “Why is an experienced executive on the market and available to just step in to my company as I need him (or her)?” Unless you are at that stage in your career, it can be challenging to understand why executives choose the interim management career path.
Year after year, Cerius conducts a survey of independent executives, and the top reason they indicate for choosing their career path is always the desire for more flexibility.
Most Independent Executives enjoy not working 2080+ hours a year, having the ability to choose the type of work they do, and working in a variety of companies and situations throughout the year. Increasingly, we are also seeing executives take on interim executive assignments as a means to vet companies as they consider their next full-time role. Taking the right role with a good company that is the right fit is as important to executives as it is to companies.
As a business grows, there is always an inflexion point causing a talent gap. Talent today is as fluid as business has become unpredictable. Most businesses no longer have 3-5 year plans, but rather 6-18 month plans. The independent workforce, particularly at the executive level, can provide the same flexibility and scalability in North America as it has for decades in Europe to help keep up with market changes and close the talent shortage gap so many industries are facing.