Interim Management market sees steady demand

2013 has been an interesting year.  We are definitely seeing an increased appetite for kick starting projects or change programmes that had been on the back burner with a real push in the last half of 2013.  Our clients are keen to engage with highly professional Interim Executives who can help drive change programmes forward.

The latest Ipsos MORI IMA (Interim management Association) survey (Q3 2013) completed by all IMA members is showing encouraging news in that the figures are showing stabilised growth for the sector and member firms are  maintaining current levels.  

Interestingly the findings show the most common reason for an assignment remains Programme/Project Management with 62% of all interim executives hired for this purpose (up 6 percentage points from 56% in Q2 2013)  although this could be used to badge a variety of assignment needs.

Turnaround/Crisis Management has increased 1 percentage points to 12% (11% in Q2 2013) which seems to fit with what we are seeing.  The private sector still accounts for the largest proportion of assignments at 60% although down 5 percentage points from the previous quarter.  The Financial Services sector continues to lead the private sector with 45% of all assignments being from this sector. However, this sector has declined compared to Q2 2013 (59%). The other leading sectors are Business Services with an 11% share, IT & Telecommunications with a 7% share and Manufacturing with a 6% share this quarter.  The public sector has grown its share from 35% in Q2 2013 to 40% in Q3 2013.

Female Interim Executives are accounting for 36 per cent of Assignments – a figure that continues to increase, and the highest recorded since 2010.

It would appear that the changing landscape of the market continues and although client briefs are sometimes quite tight and their requirements quite prescriptive, the good news is that they are engaging someone to work with them with a realisation that the added value, deliverables and ROI are proving to make a worthy investment.

Steven Wynne

Managing Director

Macallam Interim

e: enquiries@macallaminterim.com

T: 01423 704153

W: www.macallaminterim.com 

Is the taxation of ‘controlling persons’ a serious threat to the interim management market?

The Government has produced a consultation document proposing that all “controlling persons” at an organisation should be on the payroll. This will include both private and public sector organisations. The Government is effectively planning to ban the use of limited company contractors in situations where they would be acting as “controlling persons” in a business.  The definition of a ‘controlling person’ is someone who has managerial control over a significant proportion of the workforce and / or control over a significant proportion of the organisations budget.  There lies the problem.

What do they mean by ‘significant proportion’ and who will do the measuring?

Fundamentally there is nothing wrong with the description of a ‘controlling person’ but in this context the Governments proposal of defining what constitutes a ‘controlling person’ leaves the interpretation open to misunderstanding.   By the very nature of what Executive Interims do they are more often than not going to have managerial control / budget control over a significant proportion of the organisation.  After all, if the organisation is going through Change, Transformation, Restructuring, and Turnaround etc. they need to be able to bring in some external help with someone who can lead them through this business critical time. 

To propose to put all ‘controlling persons’ on the payroll is going to have a detrimental effect on the interim management sector and seriously threaten the livelihoods of a £1.5b industry that doesn’t just end with the individual engaged to do the work.  Secondly if, as an industry, we come up with an alternative (the IMA are putting a response forward) there needs to be clear parameters about who should and who shouldn’t be included.  

In these times don’t organisations need the flexible resourcing options that interim management provides?  While we find ourselves in the midst of recession with what continues to be a challenging economic climate, the timing, quite frankly couldn’t be worse. The threat of putting Executive Interims on the payroll will possibly provide both clients and interims with enough reason not to bother.  It might on the other hand fuel the ‘in betweeners’ or fixed term contracts market as they take the benefits and pay tax accordingly but what does this mean for the professional interim?

Or is this a knee jerk reaction by the Government following an embarrassing situation with the Ed Lister case?  He was the CEO of the Student Loan Company and transpires he was engaged for a 3 year period on a daily rate.  This coupled with other high profile tax avoidance schemes has meant the media have got hold of this and political rather than economic forces are taking hold.  It would seem the media hype has backed the Government into a corner because when it’s your own front door…

By Steven Wynne