Welcome to Boyden s annual review of the Interim Management market in the UK

Transcription

1 2011/2012

2 Introduction Welcome to Boyden s annual review of the Interim Management market in the UK Boyden has been surveying the Interim Management market since the 1990 s, providing an insight into market trends for our Clients, Interim Managers and potential users of Interim services. The Boyden survey is now one of the largest studies of its kind conducted in the UK. Perhaps surprisingly, 2011 showed a strong rebound in demand for Interim Managers with the community reporting high utilisation, a resilience in day rates and a continued growth in the awareness of the benefits that Interim Managers can bring to organisations. As always, we have observed variances and clearly defined trends within the Interim market place as a whole. In the public sector, for example, demand patterns have continued to trend sharply downwards. It is also noteworthy that the gap in the gender divide has widened with a 6% drop in the number of female Interim Managers registering with Boyden Interim during the course of the year. These, and other patterns, are examined in more detail in the body of this report. Highlights 85% of Interim Manager respondents delivered at least one assignment in 2011 Average Interim day rates remained resilient at the top end of the market 82% of Client respondents expect to pay c per day for an Interim Manager at Director level Public Sector demand for Interims continued to drop sharply and accordingly day rates in this area came under severe downward pressure Finance, Programme Management and HR were the three functional areas which saw the strongest demand for Interims All data in this report was gathered between December 2011 and January 2012 and refers to the calendar year May I take this opportunity to thank all our Clients and Interim Managers who participated in this year s survey. I hope you find the results both interesting and informative. Patrique Habboo Managing Partner

3 The Interim Management Market Uncertainty on a global macroeconomic level provided perfect conditions for growth in Interim Management The UK economy has been challenging for many companies over the past couple of years and there is little sign of immediate improvement with 90% of Clients surveyed believing that we are already in a recession or heading quickly into one for Despite this, 85% of Clients surveyed told us that the worsening economic environment of 2011 did not reduce their use of Interim Managers and 21% said that they are more likely to use an Interim Manager or external consultant to help with a specific project. 76% of Client organisations surveyed had engaged one or more Interim Manager during 2011, with an average of nine Interims employed. However, this average was skewed somewhat by a few organisations which had used larger numbers of Interim Managers over thirty in one case. There also seems to have been very little, if any, decline in activity among our registered Interim candidates. This 2011 survey showed that 82% of candidates had worked as an Interim Manager during the year and nearly 50% had worked on more than one assignment. Interim Managers were asked for their unprompted comments on the state of the Interim market and three themes emerged from these:- 1. It feels as though we are in a recession although we may be talking ourselves into it rather than as a result of a downturn in activity 2. Client organisations will still need expert advice even in a recession and Interims are cheaper than permanent recruits or the Big Four consultants 3. Permanent recruitment companies are entering the Interim market without understanding the concept and are therefore trying to place the flood of people who are between jobs 2011/12 Boyden Interim Management 3

4 Demand for Interim Managers Public versus Private Sector There was a significant reduction in the number of Interim Managers employed by the Public Sector during 2011, dropping from 16% in 2010 to 11% last year, and this figure is almost half the 21% recorded in The Not-for-Profit, or third sector, also took less than a third of the number of Interims than during the previous year, being responsible for only 0.8% of the assignments recorded in this survey. In addition to the drop in assignment numbers, the Public Sector has also seen a drop in average day rates paid to Interims - from 685 in 2010 to 558 in This is almost 30% lower than the average rate for those employed in the Private Sector. Sector Net Interim day rate* Public Sector average day rate Private Sector average day rate Overall average day rate * This is the net day rate received by an Interim Manager and does not include Provider fees These results certainly reflect the expected difficulties for the Public Sector as government cuts start to take effect. Finance, Programme Management and HR dominate in terms of functional demand patterns as transformational programmes continue to be implemented Client demand (%) * % 18% Finance functions 43% 16% Programme / project management 30% 15% HR functions 23% 15% Operations functions 13% 10% Commercial and sales / marketing functions 13% 6% IT functions 4% 11% General management * Function most likely to require an Interim Manager It would appear Client organisations do not feel that they need Interims to help them with general management issues. This may reflect a reluctance to acknowledge the need for help at board level, or indicate a mismatch in the way general management roles are labelled, since covering a senior management gap is the most common reason for actually hiring an Interim Manager /12 Boyden Interim Management

5 The reasons given by Clients for hiring an Interim Manager were:- To cover an unforeseen gap in senior management A need for specific skills, not available in-house, for a project or programme A need for skills within the business such as M&A or Turnaround Maternity cover Language skills / overseas experience Use of Interim Managers to cover a gap between permanent employees was much more prevalent during 2011 than in the previous year and correspondingly the need for M&A or turnaround skills were less sought after. This may suggest that significant change management and merger activity was conducted in 2010, leading to reorganisation which then required gap management during % Reported day rates held up remarkably well during 2011 with even greater demand for senior Interims at 1,000 or more per day As usual, the range of day rates reported by Interim Managers for 2011 varied enormously from 250-2,400 but the average recorded net Interim day rate was 750 up slightly on 2010 and beating the previous record for the decade of 742 per day. There was a substantial drop in very low day rates recorded by Interim Managers during 2011 and nearly 20% of Interims on assignment were being paid over 1,000 per day, as shown by the following graph. When asked what day rates they charge, Interim Managers record an average of 813 per day so there is some shortfall in their expected day rates versus the reality but not as much as we might have expected to see in a difficult trading year. % % 23% Less than % 33% % 26% % 18% % of Client respondents would expect to pay between 750-1,000 per day for a Director level Interim Manager and 39% would expect to pay between 1,000-1,500 per day. This equates to an average day rate for a director level Interim Manager of 995 representing a small decrease of 6% on the average day rate paid during 2010 for such a senior Interim. The higher fees expected by Clients will include the fees paid to Providers for their service in finding the right Interim Manager /12 Boyden Interim Management 5

6 The Typical Interim Manager 48% of all Interim Managers are male, aged between years with only 14% of Interims being women of any age, a drop of 6% since 2010 Only 2% of our Interim respondents were under 40 whereas 18% are over 60. In the Interim Management market age and experience is sought and valued rather than overlooked, which may not be the case in the permanent recruitment market. For no discernible reason there was a drop of 6% in the number of female Interim Managers registered with Boyden during 2011, so that now only 14% of our candidates are women. Reasons for choosing Interim Management as a career For Interims the attraction of their career choice is primarily the variety of Clients and assignments and the flexible way of working, which means that they may work extremely hard for say 6 months but can then take a break % 23% Variety of Clients and assignments 18% 20% Flexibility of working i.e. can take breaks Variety of clients Flexibility of 11% Constantly being challenged Constantly being 10% 12% Independence / control of own life Independence / 9% 9% The remuneration The remuneration 7% 7% Freedom from company politics Freedom from 6% 6% 5% 4% Focus on results and adding value Focus on results Experience of a wide range of organisations Experience of a Since Interim Managers are not employed by their Clients they can often avoid company politics and remain more independent which is significant to some, allowing them to spend more of their time achieving results on behalf of their Clients. Making a big difference and fast. I enjoy leaving the Client thinking that it was the best money they ever spent. Variety of work, stimulating work pressure, fast pace, high expectations and measurable results /12 Boyden Interim Management

7 The Interim community were asked what Interim Providers could do better for them. Clearly one of the most important things for Interim Managers is the source of assignments but this is still eclipsed by their desire for regular communication and contact from their Provider illustrating the critical importance of nurturing and personal contact. This contact would also lead to a better understanding of the value a registered Interim Manager can offer, which in turn would be more likely to guarantee a good fit for each assignment. Top 10 improvements Interim Providers could make for their registered interims Keep in touch proactively and be responsive to Interim calls and s OT O HER 16% Supply Interims with regular assignments Get to know the best Interims to aid understanding of the value they can add 3% 4% 14% Generate Client interest in the abilities of good Interims Provide regular market updates about emerging trends / skills requirements etc 5% 5% 5% 6% 7% 12% Speculatively market good individual Interim Managers to potential Clients Provide networking opportunities with both Client organisations and other IMs Offer a greater level of personal contact, ideally face to face every 6-12 months Network with potential Clients to better understand their Interim needs Defend day rates / negotiate appropriate day rates for Interim Managers Both Client organisations and Interim Managers would like Providers to take on more responsibility for raising the profile of the Interim options. Move away from the Body Shopping approach back to the value-adding, senior, over-qualified, real Interim Management approach. Market Interims particularly in times of uncertainty as part of a strategic and tactical solution, not just as a temp. 2011/12 Boyden Interim Management 7

8 The Role of the IM Provider The Interim Management Provider marketplace remains highly fragmented. Our survey this year listed 128 different companies as providing Interim Managers slightly fewer than the last couple of years. There have been a few mergers during 2011 and more traditional recruitment companies offering Interim solutions to their Clients made it onto the list this year. Our respondents were asked to name the top 3 Interim Providers in the market with Boyden Interim being the clear winner, followed by BIE and Odgers. These three providers accounted for 56% of all the votes cast by both Interim Managers and Clients, with Interim Partners, Alium, Green Park and Veredus also placing a significant number of our Interim Managers. 54% of our Client respondents said that they would go to an Interim Provider (or recruitment agency in some cases) to source an Interim Manager if they needed one and this was followed by the use of their own network of colleagues for a word of mouth recommendation. Relatively few are using their own HR departments to find Interim Managers for them and fewer still are using sites such as LinkedIn as yet. Having decided to use a specialist Interim Provider most Clients find the right one for them via word of mouth recommendation and this will include HR departments. Directories of Providers would be the next source of choice followed by Google. Press advertisements were much less likely to be used as a source of Interim Providers. The main reasons that Clients choose to work with Boyden Interim were given as:- Boyden operates exclusively at the senior end of the market Speed of response Boyden s reputation and strength of the brand Combined Interim and Executive Search Boyden s value to its Clients is clearly reflected in the time taken to understand and carefully match Client needs with suitable candidates. Our detailed knowledge of our portfolio of candidates allows us to deliver right first time candidates within 3-5 working days /12 Boyden Interim Management

9 Top 10 improvements Interim Providers could make for Clients Clients were asked how Interim Providers could improve their service for them and the following were the key suggestions:- Reduce the fees / margin on day rate 5% 4% 4% 3% 25% Understand the organisation and brief for the best fit Only shortlist candidates with the right credentials 7% 7% 10% 21% Maintain regular contact to understand client needs as they evolve Speed of response Improve IM Provider brand awareness Raise the profile of the Interim option Ensure that Interims can be operational from day one 14% Provide joined up Interim teams as well as individual candidates Offer more all rounders with broad skills not just specialists Filter the Interims more we need high calibre candidates, not just people who are between roles. By understanding our company well and taking a good brief they will ensure that they find the right candidate quickly. 2011/12 Boyden Interim Management 9

10 Predictions for 2012 Both our Interim Managers and Clients were asked if they thought the country was already in a recession or heading into one. 62% of Interims thought we were already in a recession and 21% thought that 2012 will be a more recessionary year. Despite this Interim Managers are reasonably optimistic that day rates will at least hold in 2012 and the best Interim Managers are becoming resistant to any further drop in day rates. In the current climate Interim Managers should be a very viable and rewarding options for businesses which cannot afford the costs and liabilities of permanent employees. When asked about forecasts for 2012 Client respondents gave the following responses which are perhaps unsurprisingly slightly less optimistic than at the start of 2011:- Predictions for the coming year Investing for the upturn in the market 38% 35% Expect cost cutting to be a focus for the next year 29% 22% Pessimistic regarding growth for the coming year 25% 10% Hopeful there will be growth in the coming year 19% 33% Waiting to see what will happen to the economy 19% 8% Whilst there may be a similar level of investment to 2011, there may also be a greater focus on cutting unnecessary costs within businesses whilst some Client managers wait and see how the economy will develop. However, 46% of Boyden Clients said that they were pessimistic about their markets at the beginning of 2010 so 2012 may not be as difficult a year as expected /12 Boyden Interim Management

11 Social and business networking sites may not be the answer to recruitment that was anticipated In last year s survey 37% of Interim Managers were expecting over 50% of their assignments to come from social and business networking media by During 2011 however, 67% of respondents said that it had not yet become a route to market for them although it was a good networking tool. It seems to offer some opportunities but no jobs yet. This is not for the want of trying, I have 1,000+ contacts! This year Interims feel that only 21% of assignments will come from either social networking or specialist on-line Interim Communities within the next three years. This seems to suggest that social and business media has not delivered as much as expected in respect of assignment options during Predicted sources of Interim assignments between Interim Managers own contacts 42% Interim Provider 38% Social networking e.g. LinkedIn 13% Specialist on-line Interim communities 8% 2011/12 Boyden Interim Management 11

12 Boyden Interim Management has consistently been a leading Provider in the UK and Europe to both public and private sector organisations. As part of the global Boyden network, with over 70 offices in over 40 countries, we never cease working to build upon our reputation for delivery, discretion, integrity and professionalism. Established for over 60 years as a leading executive recruitment and Interim management firm, we take advantage of our local knowledge, cultural understanding and industry & functional expertise to retain the best leaders for organisations, throughout the world. For any Interim enquiries please contact: Patrique Habboo Tim Blackstone Sue Smith Tel: +44 (0) Produced by: Boyden Interim Management Tel: +44 (0)