We have seen executive careers take many forms over the past. Some of it was caused by economic changes while other times it was mostly influenced by personal preference. Experienced executives have a number of options when making their next career choice from taking a full-time position, retiring, focusing on Board work or joining the contingent workforce as an interim executive, management consultant, advisor or coach.
As much as each of these decisions seem independent of the other, over the past 10 years, we have witnessed executive careers as more fluid, interchanging and often overlapping between these options. At Senior Management Worldwide (SMW), we work primarily with 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. The best way to find these answers is to ask a large group of executives, so we asked 13,000 interim managers in 27 countries to participate in a survey. The Netherlands, Spain, Turkey and USA did not participate in the survey, but have comparative values from local surveys completed early 2016. The purpose of the survey was to identify who interim managers are and what they do.
Who makes up the contingent or interim executive workforce?
With over 54 percent 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. More executives are seeing the advantage in working as interim managers and the executive-level contingent workforce is growing globally as a pillar in top quality leadership. There is also an increasing number of female interim managers globally. In Sweden 25 percent and in UK over 30 percent make up interim executives. The rest of Europe is nearly 20 percent and APAC over 35 percent are women. Other key facts about who makes up this group of executives:
- The average age is 53 years old
- They work 200 days or less per year
- 66 percent were currently on assignment
- 55 percent who responded were in C-level assignments
What type of positions do interim executives take on?
We are seeing a growing demand for interims at the CEO and senior executive 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 53 percent of the executives providing that top level expertise as a CEO, president, CFO, GM or VP. It is followed by two roles both at 24 percent – the non-executive director (NED) and line managers.
As for functional areas, marketing and sales are the most common interim assignments with 31 percent of respondents leading these initiatives followed by 22 percent acting as an interim CFO. While every industry sector was represented in the survey, the top four sectors using interim executives are manufacturing/engineering, banking/insurance/financial services and biotech/pharmaceutical/chemical and Fast Moving Consumer Goods (FMCG).
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. Fifty-seven percent of respondents are committed to being interim executives, as it provides a better work/life balance then their previous careers and the ability to choose the types of challenges they want.
It is also consistent work – 75 percent of interim managers find that they have had the same number of enquiries or more over the last five years. This is promising since we know that the number of enquiries reflects the business or economic cycle in countries where SMW serves clients and illustrates that more organizations are leveraging the “gig economy.”
What does their business look like?
Most interim managers accept part-time contracts to have the flexibility to accomplish Board-level or Advisory commitments. For clients, a part-time contract gives them opportunities to get more value for their money with a high caliber interim executive at a reasonable cost.
The average length of a contract is one year with 90 percent of interim managers having completed two to three assignment during the last three years.
Though there is an extensive range of rates for interim executives and management consultants, over 63 percent of the executives reported client rates between 800€ to 1,400€ per day.
International service is growing in the global economy with 67 percent of interim managers working with domestic companies with international operations and 57 percent working with international companies in a domestic market.
How do they find clients?
The route to market for an interim manager is using their personal network or a service provider. Twenty-two percent find new engagements from their personal network and 10 percent from service providers. However, 58 percent of respondents approach one to three service providers for enquiries. In Germany and UK 35 percent of the interim managers are approaching more than six service providers for enquiries.
International organizations have reduced costs down to the bone in management resources which means lack of leadership is one of the most common areas of high risk. This need leads to opportunities for interim executives to engage with new clients. The top leadership capabilities or strategic scopes organizations need from interim executives are promoting their skills that help with:
- Growth initiatives
- Turnaround projects
- M&A integration
- Change management
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 SMW, we have been educating, advising and placing interim executives for over a decade in 40 countries and look forward to continuing that into the next decade better than ever.