How has the economic impact of COVID-19 affected the Interim Management market?
In the second of two articles in this newsletter, Neil French of Partner Financial talks to Alison Dungworth, Adviser to the IAC Community, about the interim market three months since lockdown and as we slowly start to emerge.
Given the current situation has there been any hiring activity in the last three months?
After an almost recruitment shutdown, I am pleased to say there is some positive news in the marketplace and things have improved slightly since March. This is confined to small pockets of recruitment and not at the volumes we have been used to, but we are hopeful for the months ahead with the increase in activity. Partner Financial are pleased to have successfully delivered a number of successful remote interim manager placements.
Where have you seen the demand for Interim Managers in recent months?
The demand has been for business-critical roles rather than ‘nice to have’ positions and often this has been the completion of recruitment pre-lockdown which was then frozen. Inevitably, this conclusion has been via technology and necessitated remote onboarding.
The industry sector impacts have been widely covered in the press, what have you seen on the ground?
The well-publicised worst affected sectors such as Hospitality, Travel and Leisure have furloughed many thousands of workers whilst other employees have taken significant pay cuts and unless there is an absolutely critical need are not hiring. Some companies in the Technology, Ecommerce, Media, Healthcare and Logistics sectors have fared better and some are seeing either an increased demand or are better sheltered from the impact of COVID-19. A number of businesses in these sectors have continued to hire to support increased demand and to build capacity for the future.
Do you think there may well be skill gaps in companies that have not been filled?
Many businesses are being forced to make the best of the resources they currently have as opposed to having the luxury of hiring in proven Interim Management expertise. Some CFOs, FDs and Financial Controllers are being required to be much more ‘hands on’ in areas where they have had to lose members of their team. We hope that as the pandemic starts to come under control, businesses may have more confidence to hire, and these skill sets are deemed essential and worthy of investment. Interim Management remains a cost-effective solution to a range of challenges, projects and issues and in past recessions the market has continued to be robust and come back to life quicker than permanent hiring.
How have the interview and selection processes been working given the physical constraints?
Global businesses operating across different time zones have been successfully working remotely, interviewing and hiring candidates for many years. As such they are well equipped to hire and virtually onboard candidates efficiently. This is nothing new for them and no real change from business as usual. For others this has been a real departure from the norm and they have had to pivot quickly and will need to continue to put faith in new ways of working. We all now utilise a plethora of much improved and user-friendly technology including Zoom, Teams, Facetime, Skype etc. and Recruitment Tech firms including Odro and Hinterview go from strength to strength. Whilst there is no replacing physical, face-to-face meetings to get a better gauge of body language and cultural fit, we have no choice but to adapt.
And the office onboarding?
Onboarding, although a challenge is now done digitally and with the use of video, screen-sharing, e-contracts, meeting the teams via video, mentoring, organisation charts and online compliance checking. Much the same just without the physical tour of the office and the chat by the coffee machine!
What are the detailed steps involved?
These very much follow the same process as before, but now virtually:
- A video interview followed by high quality referencing, compliance checks and then an offer followed by virtual onboarding.
- Deep and extensive referencing by clients to get genuine insight to supplement video interviews which may be more difficult for those still in permanent positions.
- Additional intricacies are considered, including NDAs to cover the handling of sensitive company data and information and completion of contracts.
- An opportunity for clients to include a working interview or initial part-time, pro-bono diagnostic piece of work to help assess what they are buying in advance and give the hirer confidence before adding to their cost base.
As the business world tentatively re-starts what specific skills do you expect and are you seeing to be in demand?
As would be expected the in-demand skills are those needed to support businesses address the financial challenges they face after such a decline in trade i.e.:
- Cash Management and Forecasting/Modelling
- Scenario Planning
- Working Capital Analysis
- Order to Cash/Credit Control/AR/Collections
- Cost Reduction and Optimisation
- Transformation and Change
Are you seeing downward pressure on day rates and what is your advice to prospective candidates on this?
It is too soon to say whether there is a noticeable downward trend in day rates, and it will always vary depending on your specialism, the supply and demand levels for your skills over the coming months. Restructuring and Turnaround rates could increase. Clearly there are a greater number of candidates on the market through no fault of their own, adding to the competition and this could make rates tighter in some spaces. We are forecasting a significant and deep recession which could affect overall demand and therefore rates. My advice would be to be flexible, take a long-term view, be open to different ways of being paid i.e. milestone and delivery-based work or weighted to a completion bonus rather than a pure day rate.
And to close what is your view of the market for interim managers as we move forward?
We remain positive that the interim management market will gather pace as we begin recover. Employers will need resource to ensure delivery of certain key skills and projects and may not have the confidence to hire on a permanent basis given the uncertainty. Interim Managers can offer an excellent, cost effective alternative to consultancies and could be vital in the survival of some businesses. Clearly no one really knows what the new normal will be like and we remain challenged with the ongoing uncertainty, the end of the furlough scheme, rising unemployment and concerns over a second wave. Remaining positive and doing all you can to get 'match fit', which is covered in my second article.
Listen further to Neil’s views in our recent webinar.
Neil is the Head of Interim Practice at Partner Financial with over 12 years’ experience in Senior Finance and Transformation appointments. Neil has previously delivered a variety of complex and high profile recruitment projects both in the UK and Internationally for leading FTSE 100 / 250, SME and PE Backed organisations including Whitbread Group, British Airways, Ocado Group, Deliveroo, VUE Cinema Group, Capita Group, JD Wetherspoon, TUI Group, Britvic and EasyJet. Neil has a deep and broad network within the Senior Finance and Transformation community. His experience includes building complete Finance and Systems implementation functions including Executive and Senior Management teams