It is no news that 2020 was an eventful year. The extremely rapid global spread of the COVID-19 virus which caused a pandemic. The measures taken in all countries created a new reality everywhere, with masks and social distancing as visible witnesses.
In addition to social and medical measures, economic, financial and fiscal measures have also been taken. In many countries government funding was set up to deal with the first and subsequent economic blows. Vaccines are now being distributed around the world but with the millions of people who will need to get these vaccines, it will take much of 2021 in order to get these vaccines out to most people which in turn will keep businesses guessing on when things will get back to normal.
Senior Management Worldwide (SMW) examined with an internal enquiry what the pandemic means for Interim Management and, more importantly, what the future will bring, based on the results of our partners and the economic expectations in each country. The pandemic continues to play a major economic role everywhere. In some countries or even continents it comes on top of other, already existing economic challenges, such as Brexit or the trade war between China and America.
Without exception, SMW-partners worldwide experienced a drop in orders in the beginning of 2019. In Q3 the demand for interim staff started to increase again, with clear differences in markets, functions and contracts compared to the pre-corona era.
In a number of markets in Europe, Asia and the US, there is a clear decline in demand for interim management. The most striking are industrial (e.g. automotive), manufacturing, tourism, aviation and chemicals. There are also markets that are stable, despite the current situation, such as: healthcare, ICT, finance, government, non-profit (e.g. education,).
Again in Europe, Asia and the US. there are also markets that are doing well in this day and age, such as: e-commerce, fast moving consumer goods, consumer products, logistics and pharma. The challenge is to find experienced candidates in similar industries.
As we zoom in on the interim positions that are currently in high demand, a number of aspects play a clear role. What we see at many American companies is that they are using this time to sharpen their business models. There is also a keen focus on cost savings, at all levels to make sure they have enough cash for any other unexpected events during the Pandemic.
We also see a clear increase in demand for strategic experts to help pivot their business, change managers to help them make business transitions go smoothly, replacing weak leaders with strong interim managers and for bridging management vacancies. We also expect an increase worldwide for crisis managers, HR restructuring managers and debt restructuring CFOs.
More and more opportunities are also being seized to buy companies for market expansion (M&A), especially in the US, China and India. The desire to integrate these companies quickly creates an increasing demand for interim management support in these areas.
The third trend we see among our partners (e.g. USA, Australia) is the demand from clients for other types of contracts. More part time engagements (2-3 days a week) rather than 5 days a week. Also a huge demand for interims doing short projects, advisory assignments and assessments. What is also reported is that more and more companies are converting interims to full time positions. The enticement of having the ability to “try before you buy” with a high-level executive role helps to reduce the risk of making a very costly mistake.
All of the above trends show that companies are closely watching their budgets and not spending a lot of money all at once. They are very careful to what they spend their money on, to make sure they get are getting a return on their investment.
Without exception, all of SMW’s partners have stepped up their businesses to be flexible and innovative during this COVID-19 period. Of course, with the aim of continuing to be a valuable supplier to customers in 2021.
In some countries, interim management and the benefits for companies that make use of this means even more attention has been and is being paid to interim management. Where one country has been familiar with this phenomenon for decades, caution is still visible in other countries.
The market situation has also led to a flood of new interim workers now that their permanent jobs have been lost. This seems very much due to the financial crisis in 2008/09 as well as a result of the Pandemic. However, great interim management companies have typically been around a long time and they know how to select the best interims from among all of these interim workers whether in good or bad times.
The Interim Management market has also been affected by COVID-19 in the recent period. Depending on the market, there has been either downward or upward movement. For the future we can state that the increase of Interim Management business depends on the infection rate. If we control it companies are confident for the future and Interim Managers will have a lot of work.
SMW regularly publishes best practice examples from its partners. With associated member firms in 40 countries and partner branches in 23 countries including Europe, Asia, Middle East, Americas and Australia, SMW delivers services seamlessly across the world in any market. One local contact in your country plus one contact on the ground in the country where we are working. Wondering how we can help your company? Contact the SMW partners in your region: smw-interim.com.