Today in YouAgile we report the contribution of Jon Younger published on Forbes on Mar 1, 2022.
Interim Management Is A Growing Opportunity In The Freelance Revolution
Interim management is poised to continue its growth hike.
INIMA, the International Network of Interim Manager Associations, has published its new survey, reporting on experiences during 2021, and kindly invited Forbes and the team at Agile Talent Collaborative and #freelancerevolution to take a first look.
INIMA primarily focuses on European interim management. Europe is a principal market for interim, a consequence of Europe’s generally more restrictive employment laws. Unlike “at will” employment relationships typically found in the US and emerging economies, European rules make it more difficult to end an employment relationship without considerable financial penalties. Interim has flourished, in turn, as a tool of talent arbitrage, but often enables an organization to attract more experienced experts than permanent roles would allow.
Here’s what we’ve learned about interim managers during the past year. Where possible, the data compare 2022 with INIMA’s prior (2021) survey results.
Interim roles are growing across Europe. As INIMA points out, there was a 7% increase from the 2021 survey in interim work, with standout growth in the UK (16%) and France (10%). According to the report, January 2022 reported an even greater rise of 11%, with the UK and France again the leader (21%).
Personal networks remain important. In 2021, personal networks were the primary source of interim roles (48%), followed by interim marketplaces and consultancies (24%). This trend continues, with 51% of interim assignment generated through relationships. Although we are seeing more open channels for interim management, fewer assignment (-4%) came through providers. This is interesting because of the growth of providers offering corporates interim talent.
The profile of interim managers is changing but slowly. In last year’s article reporting on the interim management space, the typical interim was 56 years old and male. While the demographic is changing, it is doing so slowly. This year’s report points out, “A typical European Interim Manager is male, aged 54 years, with more than 7 years of experience as an interim professional.” While the 2021 Eurostat survey reported 35% of permanent management positions in Europe were occupied by women, only 14% of the European Interim Managers were women in the INIMA survey. The INIMA survey provides some detail on the contribution of women interim leaders. Among European countries, the greatest participation levels among women interims were Poland (23%), Portugal (22%), and France (18%). Lower levels were reported by Germany, Italy, Spain and Switzerland, all under 10%, and the UK at 13%.
Interim managers tend to have deep experience as temporary leaders. Overall, the average interim experience was about eight years (7.8). At a country level the experience of interims varied, a reflection of the maturity of the profession in different markets. UK interims had the highest average level of experience at 10.5 years, followed closely by Liechtenstein and Switzerland. Poland, Spain, Portugal and (surprisingly) France interims were the markets where interims were lowest in experience, all under 7 years. Still, that is a substantial base of average experience.
Most wanted areas of expertise among interim management talent haven’t changed. As in the prior report, the functional skill most in demand in 2022 survey is board participation and general management (30.5%). Following, and again similar to 2021, the top five key functional areas for interim assignment are:
Utilization is high for experienced interim managers. Experienced interim managers were exceedingly busy in 2021. Average utilization was 63%, a very significant jump up compared with 33% in the last report, no doubt a consequence of responding to Covid-19 dynamics and, implicitly, influenced by the great resignation. The highest level of utilization was in Germany, where interims reported being engaged on assignment 81% of the time. Utilization levels varied by country with Switzerland (68%), Italy (67%), and France (63%) among the leaders. Only Portugal (34%) and Spain (47%) reported utilization levels below 50%.
Durations are increasing. The 2021 survey found that durations on assignment averaged just over 11 months, and the 2022 survey results found that across markets, assignments similarly lasted just less than a year. Switzerland (14.7) and Italy (14.4 months) were somewhat longer than the norm.
Fractional interims are a relatively new category. Historically, interims work full-time on assignment until the assignment ends. But fractionalization – an increasing factor in talent staffing and management – is creating new opportunity in the interim field. By market, 51% of Spanish interims and 40% of Italian interims were on part-time, rather than full-time, assignment. Interims in most other markets reported an average of 20-30%, and 25% was the overall European average. The survey data does not specify whether these individuals are managing a portfolio of multiple interim roles, but it’s likely given high overall utilization levels.
More commercial, less public sector. In the 2021 report, 90% of interim roles supported commercial organizations, and 10% were public sector or non-profit. Markets with the highest percentage of public sector assignments were the UK (17%), Poland (15%) and Switzerland, (11%). In 2022, only 8% of interim roles served the public sector, a slight decline. Poland (18%) and the UK (16%) were on top, again, but no other market broke 10% in the not-for-profit segment.
The commercial organizations hiring interims are divided between startups and larger corporates. Overall, 31% of interims were on assignment with startups and SMB organizations, while 40% were working with larger organization of more than 500 employees. Markets varied: Italy (65%) and Spain (63%) were most focused on smaller and newer organizations, while interims in Liechtenstein (71%), the UK (62%), Germany (57%) and France (49%) were primarily focused on larger organizations. This is a change from 2021 when half of assignments were with startups and smaller companies.
Three key business challenges dominate interim assignments. An interesting analysis described the top business issues interims were asked to address in their last assignment. The top challenges were change management, project execution and process transformation. New business development was also frequently mentioned These results are consistent with the findings of last year, where almost half the work of interims focused on transformational challenges.
Interim pay is attractive. In the 2022 report, average day rates for interims were 850 euros. However, averages don’t sufficiently represent the significant variance across countries: Daily fees range from 1350 euros per day for Switzerland to half that day rate in Spain, Portugal and Italy. The UK, a major interim market offered an average 970 euro equivalent.
In an earlier review of interim management, four themes were evident: increased interest on both the buy and sell side, the rise of interim as a distinct career gateway, the growing range of industries and professions inside of interim – like HR – and the variety of supply points for engaging interim talent. While personal relationships continue to dominate, we see more and more participation by adjacent industries like executive recruiting and consulting. One new and important trend is worth noting. A far greater supply of retired executive, part of the talent tsunami, are interested in joining the interim ranks. This bodes well for the future of interim.
Viva la revolution!