management third annual
THIRD ANNUAL
INTERIM MANAGEMENT
SURVEY 2013
WELCOME
FROM THE MANAGING PARTNER Interim management in Australia is, I believe, undergoing rapid transformation. No longer are interim managers seen purely as cover for staffing gaps: they are now increasingly viewed as effective leaders and change managers who provide objective and transformational advice to organisations. The skill of interims managers in providing strategic and leadership advice has seen their reputation improve considerably since the height of the GFC in 2009. And a key aspect of this is ‘supply-side’ driven growth. For the first time in Australia, we now have a pool of high quality executives interested in undertaking interim assignments for the medium-term and, not infrequently, as a long-term career choice. This has enhanced organisations’ ability to bring in interims for senior or sensitive assignments in the knowledge that they are recruiting top flight executives, not just those who are unable to secure a permanent position. One of the other interesting developments is the increasing use of interims in place of management consultants. Many organisations have a transformation or change programme that is relatively well defined but needs skilful implementation - in these instances a senior interim can, in many cases, bring a combination of a hands-on track record and a consulting mindset. And the cost/benefit of the interim option is usually very persuasive. Finally, a comment on the business cycle. Whilst one could construct an argument that the present economic malaise produces perfect conditions for interim - don’t hire a permanent executive in this market, just bring in someone for a short-term period - my strong view is that when the cycle turns upward, the increase in the number of acquisitions, growth projects, new start-ups etc. will significantly boost demand for interim managers. So, the interim management ‘industry’ in Australia has come a long way over the last four years but we’re really just at the beginning of a new methodology of senior executive staffing. Exciting times!
Nick Waterworth Managing Partner | Watermark Search International
EXECUTIV E SEARCH
•
BOARD APPOINTMENTS
•
INTERI M MANA GEMENT
WATERMARK’S INTERIM MANAGEMENT TEAM (left to right): Nick Waterworth, Danny Hodgson, Caroline McAuliffe and Greg Hayes.
INTRODUCTION Watermark Search International’s third Annual Interim Management Survey provides the most in-depth analysis of the Australian interim market yet. We have taken the temperature of over 300 professionals, comprising executive level interim managers with some independent consultants. The insight and distinct trends identified, provide both clients and executive hirers with valuable data to inform their resourcing plans. The survey also acts as a great overview for interims looking to benchmark themselves within the market. Thank you to everyone who participated in the survey.
HEADLINES • There has been a substantial swing towards the provision of ‘specialist skills’ as the motive for hiring an interim. • A significant uplift in daily rates this year, with 34% charging $1500 per day or more. • 65% of respondents have worked away from home on assignment and 89% would consider it. • The majority of assignments are lasting 1-5 months, but there is a trend towards 6-12 month assignments. • Less work in SMEs, with large private sector business and the public sector proving more fertile territory for interim assignments.
FROM OUR PERSPECTIVE We have been really encouraged by the development of the interim market in the past year. As a business,
the number of interim assignments we are handling is growing and there is a talented community of interim managers who are increasingly committed to working in this way. Whilst we are receiving more and more briefings, this survey also highlights the importance of effective networking. The majority of assignments not sourced through providers like us, come from old job contacts. Keeping those networks fresh is key to generating a good flow of work. We have also been busy spreading the message and promoting the concept of interim management as an effective resource for organisations. Presentations at various events, articles in the national press and business periodicals have all helped to push the concept onto the agenda, but there is no better promotion than an interim advocate talking to their networks about the positive impact and interim has made. The delivery process, from us taking a brief to an interim commencing an assignment remains artificially protracted. Hesitation and insecurity over the economy and the looming election has resulted in clients taking longer to hire interims: this is also mirrored in the wider executive search market. The general sentiment from over 500 comments we received was that the market is competitive and the economic climate is challenging. However, because of the value for money, experience and expertise interims bring, interim management is an increasingly important resourcing strategy within business.
Q1 RESULTS
Q1 Q1
YOUR GENDER?
79.1 80.2
Male
20.9 19.8
Female
0%
10%
20%
30%
40%
50%
60%
70%
80%
2013 2012
Q2
79.1 80.2
Male
20.9 19.8
Female
Q2 0%
20% AGE? 30% YOUR 30-39
10%
40% 4.3 4.4
50%
60%
70%
80%
90%
30.9 31.0a family life that can The blend of years of experience, energy and support working away from home on occasions sees 50-59 as the 49.2 most 50-59 popular age bracket for interims again. 52.4 40-49
Q2
15.6 12.3
60+
30-39
4.3 4.4
0%
10%
20%
30%
40%
2013 50% 2012 60%
30.9 31.0
40-49
49.2 52.4
50-59
15.6 12.3
60+ 0%
10%
20%
30%
40%
50%
60%
90%
RESULTS Q3
Q3 Q3
HOW COMMITTED TO INTERIM ARE YOU? 2013 2012
22.9 23.8
Very committed it's my career choice
35.2
Preference but will consider a permanent job
31.0 33.6
Looking for either permanent or interim work
38.5
Very committed Really only considering interim it's my career choice until a permanent job comes up
22.9 23.8
8.3 6.7
Preference but will consider a permanent job 0%
10%
20%
35.2 30% 31.0
40%
50%
60%
33.6 38.5 or are committed to Almost 60% of respondents would prefer Q4 working as an interim manager. It is a reputable and considered Really only considering interim 8.3 until a permanent job comes up career 6.7 move. Interim is less a community of circumstance and more a profession in its own right. Looking for either permanent or interim work
0%
Q4
Q4
10%
20%
30%
40%
50%
60%
33.6
27.0BEEN LOOKING FOR OW LONG HAVE YOU H 30.3 AN INTERIM JOB?
Less than 1 month
29.9
40.1
2-5 months
35.3 Less than month 6-121months
17.6 18.7 17.0
2-5months months+ 12
18.9 14.3 17.4
6-12 months
0%
2013 2012 2011
33.6 27.0 30.3 29.9 40.1 35.3
17.6 20% 18.7 17.0
10%
30%
40%
50%
60%
30%
40%
50%
60%
18.9 14.3 17.4
12 months +
0%
10%
20%
RESULTS
Q5
Q5
HAVE YOU WORKED AWAY FROM HOME Q5ON ASSIGNMENT?
65.1 66.3
Yes
34.9 33.7
No Yes No
0%
0%
2013 2012
10%
20%
34.9 30% 33.7
40%
50%
60%
70%
80%
90%
10%
20%
30%
40%
50%
60%
70%
80%
90%
The mobility of the interim market is a great asset to Australian business. Organisations with locations that are a barrier to hiring permanently can tap into a whole new pool of talent that are willing to relocate temporarily.
Q6 Q6
Q6
65.1 66.3
IF NOT, WOULD YOU CONSIDER IT? 89.3 88.4
Yes
10.7 11.6
No Yes No
89.3 88.4
0%
10.710% 11.6
20%
30%
40%
50%
60%
70%
80%
90%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
2013 2012
RESULTS
Q7
WHAT IS YOUR TARGET (OR CURRENT) Q7 BASE DAY RATE?
Less than $750
Q7 $750 - $1000
Despite an uncertain economic climate, daily rates have held up well this year. In fact, there has been a significant increase in those 1.4 earning over the $1500 per day mark. This could in part be down to 4.1 the increased confidence of hiring C suite professionals on interim contracts - a15.7 trickle up effect. 19.6
48.0 47.3
$1000 - $1500 Less than $750 $1500 +
1.4 4.1
$750 - $1000 0%
34.9 15.7 10% 19.6 20%
29.0 30%
60%
50%
60%
29.0 0%
Q8
50%
34.9
$1500 +
Q8
40%
48.0 47.3
$1000 - $1500
Q8
2013 2012
10%
20%
30%
40%
WHAT LEVEL HAVE YOU TYPICALLY WORKED AT?
61.2% General Manager 38.1% Project/Programme Manager 36.3% COO or Board Director 23.5% CEO 14.2% Technical Specialist 10.7% General Other Manager 61.2% 38.1% Project/Programme Manager 36.3% COO or Board Director 23.5% CEO 14.2% Technical Specialist 10.7% Other
RESULTS
Q9
Q9
WHICH FUNCTIONAL LEVELS HAVE Q9 YOU WORKED AT? 71.2% Board and General Management 71.2% Board and General Management 56.9% Project and Programme Management 56.9% Project and Programme Management 37.0% Operations 37.0% Operations 34.9% Turnaround 34.9% Turnaround 30.6% Finance 30.6% Finance 19.6% Sales/Marketing 19.6% Sales/Marketing 18.9% Human Resources 18.9% Human Resources 17.1% Other 17.1% Other 8.2% Supply Chain 8.2% Supply Chain 5.7% Procurement 5.7% Procurement
Q10
Q10 Q10
WHICH SECTOR HAVE YOU MOST RECENTLY WORKED IN?
Perhaps most surprisingly we have seen an increase in interims working within the Public Sector 21.0 Public Sector public sector and there are a number of 17.1 drivers influencing this. Firstly, after some 7.8 Charity and Not-for-Profit 7.8 significant redundancies within the public Charity and Not-for-Profit 9.4 9.4 sector, skills gaps have opened up which are 13.5 Private SME being plugged by interim resources whilst 13.5 Private SME 17.6 17.6 restructures are worked through. The large 8.9 scale reform agenda across government International SME 8.9 International SME 13.5 have also had an impact, with departments 13.5 increasingly looking to the private sector for 29.9 Private large 29.9commercially minded project and change Private large 24.9 24.9 professionals to drive reform, often on an 18.9 interim basis. Finally, the proliferation of Private ASX top 100 18.9 Private ASX top 100 17.6 interim managers within Australian business, 17.6 notably large private companies, is filtering 0% 10% 20% 30% 0% 10% 20% 30% through to public sector organisations who are increasingly seeking to benefit from the 2013 2012 value an interim can bring.
21.0 17.1
RESULTS
Q11 Q11
WHY ARE YOU CONSIDERING INTERIM? (TOP 3 SELECTED)
76.2% Work with different businesses 68.0% For the variety of jobs on offer 60.9% To work flexibly, even part time 41.3% To stay employed 33.1% To look at permanent opportunities once in post 12.5% To fit with NED commitments 8.2% Other
Q12
For the challenge! I love the variety and the “impact I can have through problem solving on a large scale. ” I have multiple skills, experience and “qualifications that can be applied in a range of situations. ” “To explore different organisational types.” As a transformation specialist the need is “varied from company to company and therefore provides me with a greater challenge. ”
52.2% Set for steady growth over the next 12 months 27.9% Demand will remain the same 9.8% No real appetite
6.5% About to take off
3.6% Shrinking demand
Quotes from survey participants.
8.2% Other
RESULTS
Q12 Q12
WHAT IS YOUR VIEW ON THE GROWTH OF INTERIM IN AUSTRALIA?
52.2% Set for steady growth over the next 12 months 27.9% Demand will remain the same 9.8% No real appetite 6.5% About to take off 3.6% Shrinking demand
I think the value proposition is becoming better “understood and therefore more attractive, both to employers and to interims. ” see it developing as a way for business “to Iaccelerate change and to ensure their transformations are sustainable through using interims to keep the momentum and drive.
”
I think there is a great opportunity, however “businesses need to be better educated as to using interim management to their benefit. The need is there but few may feel comfortable leveraging the available resources in the short term, given it may be a new way of resourcing for them.
”
“Will still be niche, but growing slowly!” Quotes from survey participants.
RESULTS
Q13 Q13
Q13
HOW WELL DO CLIENTS GENERALLY UNDERSTAND THE CONCEPT OF INTERIM? A high number of clients have had some experience of interim management or are open to hiring one in the future, however there is still some work to be done to sell the concept to more widely.
5.4 Comfortable with the concept with the concept and useComfortable them regularly 8.6 and use them regularly
2013 2012
5.4 8.6
41.7 43.3
Have some experience, not some experience, not consistent acrossHave the business consistent across the business
42.0 39.6
Need to be convinced, to be convinced, open to the Need concept open to the concept
10.9 Not open to the concept Not openitto the concept and do not understand 8.6 and do not understand it 0.0
Will never use an interim Will never use an 0.0interim 0%
Q14
41.7 43.3 42.0 39.6
10.9 8.6 0.0 0.0
10% 0%
20% 10%
30% 20%
40% 30%
50% 40%
60% 50%
60%
Q14
Q14
DO YOU THINK INTERIM MANAGEMENT POSES A SERIOUS SOLUTION TO THE LOOMING LEADERSHIP SKILLS GAP?
74.6% Partially, combined with other methods 74.6% Partially, combined with other methods 15.9% Yes, the availability of interims is the only answer 15.9% Yes, the availability of interims is the only answer 8.7% No, it will only be used sporadically 8.7% No, it will only be used sporadically 0.7% It wont be embraced at all 0.7% It wont be embraced at all
RESULTS
Q15
ARE YOU CURRENTLY ON ASSIGNMENT?
This snapshot of interims currently on assignment vs not, shows a positive swing from last year. Easing fears around the Eurozone Crisis, more work in state government Q15 reform programs and a general greater understanding of interim management could Q15 all be contributing factors. However, it is taking those who are off assignment longer to land their next piece of work.
Yes Yes
2013 2012
40.7 40.7
32.1 32.1
59.359.3
No No 0% 0%
Q16
10% 10%
20% 20%
30% 30%
40%40%
50%50%
67.9 67.9
60% 60% 70% 70%
HOW LONG DID YOUR ASSIGNMENT LAST?
Whilst most assignments continue to last between 1-5 months, the increase in those lasting 6-11 months is interesting. Over the last year we have found that many clients are taking longer to appoint candidates to permanent positions. Whether this is due to greater challenges in gaining approval to hire; fewer candidates looking to move jobs; or generally a more cautious approach; the result is often an extension for the Q16interim covering the gap.
Q16We are also finding that clients are impressed with the calibre and capability of
interims appointed and look to redeploy them to tackle new problems when the original deliverables are met. 2013 2012
15.7 14.8
Less than 1 month
15.7 14.8
Less than 1 month 1-5 months
31.3 33.8
1-5 months
6-11 months
20.3
6-11 months 12 months +
12 months +
31.3 33.8
24.6
24.6
20.3 0%
0%
10%
10%
28.4 31.2
20%
20%
28.4 30% 31.2 30%
40%
40%
50%
60%
50%
60%
RESULTS
Q17 Q17
Q17
IF ‘OFF ASSIGNMENT’ HOW LONG HAS THIS LASTED? 2013 2012
22.3
Less than 1 month
33.3 49.1
1-5 months
22.3
Less than 1 month 6-11 months
13.1 10.3 8.9
6-11 months
13.1
0%
10%
49.1 44.7 18.3 20%
30%
40%
30% 40% WHAT 0% WERE10%THE 20% REASONS FOR YOUR LAST ASSIGNMENT?
Q18 A 'gap' assignment
Specialist skills were required Maternity cover
18.7 21.5
50%
60%
26.9 30.0
2013 2012
44.8
26.9 30.0
5.6 3.8
0.7 1.7 5.6 Added resources 3.8 3.4 Covering a newly created job 6.8 0.7 Maternity cover 1.7 0% Covering a newly created job
60%
The provision of specialist skills remains the chief reason an interim is hired in Australia and even more so this year. Driving change and filling a management gap also remain key motives in hiring 18.7 interim managers. 21.5
Change management
A 'gap' assignment Specialist skills were required Change management Added resources
50%
10.3 8.9
12 months +
Q18
33.3
18.3
1-5 months 12 months +
Q18
44.7
36.3
44.8 36.3
10%
20%
30%
40%
50%
60%
3.4 6.8 0%
10%
20%
30%
40%
50%
60%
RESULTS
Q19
IF GAINING WORK THROUGH YOUR OWN NETWORKS HOW IS IT SOURCED?
Q19 Q19
69.7% Prior job contacts 69.7% Face Priorto jobface contacts 56.3% networking 56.3% Face to face networking 27.2% Online networking 27.2% 25.6% 25.6% 16.1%
Online networking Job boards Job boards events Networking
16.1% Friends Networking events 12.2% and family 12.2% Friends and family
Q20 Q20
Q20
HOW IMPORTANT ARE RECRUITERS IN SOURCING WORK?
46.2% Occasionally use them 46.2% Very Occasionally use them 44.3% important 44.3% Very important 9.5% Never use them 9.5% Never use them
10 TIPS
10 TIPS FOR HIRING AN INTERIM 1
DITCH THE JD/PD
Think clearly about the deliverables; focus the interim on specific tasks within a set timeframe.
2
FULL OR PART TIME
Put simply - agreeing to 3 or 4 days a week could reduce the budget by up to 40%.
3
INTERSTATE/REGIONAL OPTION
Most will work away from home which gives you access to a new pool of talent.
4
LEASE VS BUY ANALYSIS
When facing uncertainty, significant change or where a permanent hire is not appropriate, executive leasing offers the best flexibility on contracts, terms and notice periods.
5
GIVE THEM A MANDATE
An interim manager needs authority and access to resources from the top to deliver.
6
ASSESS THE ‘FLIGHT RISK’
The percentage of career interim managers in Australia is low, those looking at permanent work are still viable interim options in our market. Think about ‘lock in’ clauses or completion incentives.
7
DAILY RATES
Employment and fixed term contracts are often a preference but engaging through a daily rate offers more contractual flexibility, reduces headcount and is often the candidate’s preference.
8
KEEP TALKING
Talk to the interim manager and recruitment provider, monitor progress against deliverables to head off any mismatched expectation.
9
IS THERE A NEED?
Acting up arrangements can be successful, an interim is better suited when specific skills or higher level managerial expertise are needed.
10
DON’T SIT ON THE SHORTLIST
Even in tougher economic times, the very best interims enjoy high demand for their services.
CASE STUDIES INTERIM CHIEF INFORMATION OFFICER (CIO)
INTERIM CHIEF EXECUTIVE OFFICER (CEO)
THE CLIENT
THE CLIENT
A large public business specializing in medical services, research and product development. The organisation had grown significantly over the last few years and was diversifying the business into several new areas. The business has experienced some ‘growing pains’ and there was a need for new systems and processes to support the growth.
We were approached by the European major shareholder of a renewable energy business who were experiencing a time of management crisis due to a management dispute with local leadership. The business had grown significantly in revenue over the prior 12 month period, however, the business support systems and governance management had not been addressed.
THE BRIEF The business made the difficult decision to part company with their existing CIO but required immediate support whilst they considered their options for the permanent position. An interim CIO was required to assess the current situation, turn around several systems implementations and other business projects and provide some strategic advice to the CEO and Board and leadership to the team. The client needed a CIO who could be both strategic in their thinking but also technically strong enough to be hands on with the business.
WATERMARK’S SOLUTION Our client interviewed a shortlist of three candidates, under confidentiality agreements, in our boardroom. The successful candidate was a high profile and highly experienced CIO and interim manager with the right combination of skills. It also helped that the appointed interim had recently concluded a successful interim assignment sourced by Watermark for another client, with testimonials to support the work.
THE OUTCOME The interim brought stability, turned around projects with some substantial cost savings and has allowed the business the opportunity to properly consider their next move for the CIO position.
THE BRIEF Our client identified the need for a stabilizing influence to minimize damage and manage the business effectively whilst they reflected and prepared to conduct a formal search for a replacement. They wanted a seasoned executive with proven leadership qualities and strong operational and commercial experience. It was crucial that the interim was able to quickly gain the respect of the senior management team, the trust of the board overseas as well as have a credible reputation with key stakeholders in the local market.
WATERMARK’S SOLUTION We worked quickly, providing the Group CEO with a shortlist of four suitable interim managers who had the required skill sets, experience and leadership capabilities. Three of these to interview and appointed the preferred candidate within two weeks us receiving the brief. The interim appointed had many years’ experience in leading large and complex businesses and for the past four years he had worked as an interim manager in CEO or restructuring roles across a range of industries.
THE OUTCOME Immediate leadership stability and continuity during change, no loss of revenue or brand perception.
CASE STUDIES INTERIM CHIEF FINANCIAL OFFICER (CFO)
RECENTLY COMPLETED ASSIGNMENTS
THE CLIENT
Interim CFO (Professional services)
Watermark’s interim business was approached by a Queensland based, infrastructure organization whose CFO had resigned. The business was in a cycle of acquisition and growth.
THE BRIEF
Interim CFO (Infrastructure) Interim CEO (Professional body)
The business had instigated a full executive search process to find the replacement CFO however the process was taking a long period of time to identify and find the right person for the longer term needs of the business whose skills and experience were going to be paramount to its growth plans and long term strategic plans.
Interim CEO (Renewables)
There was a need for an interim CFO to step into the breach to undertake the CFO role on a day to day basis, manage the team and bring specific expertise to the programs of work currently underway in the business.
Interim GM Safety (Heavy industry)
WATERMARK’S SOLUTION Within two days of being briefed, Watermark Interim presented a shortlist of interim CFO’s available immediately whose skills and experience fit the brief required by the business, all available immediately to undertake the assignment.
THE OUTCOME The interim CFO was placed on an initial 3 month contract with the business which was subsequently extended twice. The Interim CFO was available to assist with a handover and induction to the incoming permanent CFO and also remained with the business for a short period afterwards in order to complete some specific projects for the CEO. The interim was able to fit in seamlessly from day one due to his experience at executive and board level and added tremendous value to the board review process.
Interim Chief Engineer (Transport) Interim CIO (Utility)
Interim CFO (Medical devices) Interim Corporate Counsel (Regulator) Interim Head of Operations (Food production) Interim Chief Information Officer (Biotech) Interim Chief Information Officer (Federal government agency) Interim Project Manager (Biotech) Interim OD Consultant (Higher education) Interim Director of Fundraising (Professional body)
THE RANGE OF WATERMARK SEARCH INTERNATIONAL SERVICE OFFERINGS Board ments Appoint
Interim Management
t rke ng a M ppi Ma
mark Water roperty ctual p intelle research and
Execu tiv Searc e h
Market Insights
ip rsh nt e d Lea ssme e Ass
EXECUTIVE SEARCH
INTERIM MANAGEMENT
LEADERSHIP ASSESSMENT
Watermark Search is a longestablished search firm specialising in C-level appointments. We have a strong in-house research enabling us to scour Australian and international markets for the best talent, rather than simply relying on advertising or our existing database.
One of the most rapidly expanding areas of our firm, the emergence of interim management in Australia is being fuelled by growth on the supply side: there are more top quality senior executives than ever before working on interim assignments.
BOARD APPOINTMENTS
MARKET MAPPING
Watermark advises many clients on the appointment of chairs and non-executive directors. We work with public listed companies as well as the government sector, government owned corporations, not-for-profits, etc.
We offer clients bespoke research on people and competitor dynamics. We gather first hand and up-to-date intelligence on a variety of sectors which can be used as a precursor to a search assignment or for internal benchmarking.
Our executive assessment programmes give organisations the quantitative insights needed to confidently groom talent for leadership roles. As a leader in executive search and board services, we have detailed knowledge of the top talent and insights into the qualities necessary for leadership this is complemented with objective, research-backed methodologies
MARKET INSIGHTS We have a unique ‘window’ in to the business, government and investment world and are available to provide informal market insights to our clients on topics such as salary packages.
WATERMARK SEARCH INTERNATIONAL T 02 9233 1200 WWW.WATERMARKSEARCH.COM.AU
INTERIM MANAGEMENT
SURVEY 2013
WELCOME
FROM THE MANAGING PARTNER Interim management in Australia is, I believe, undergoing rapid transformation. No longer are interim managers seen purely as cover for staffing gaps: they are now increasingly viewed as effective leaders and change managers who provide objective and transformational advice to organisations. The skill of interims managers in providing strategic and leadership advice has seen their reputation improve considerably since the height of the GFC in 2009. And a key aspect of this is ‘supply-side’ driven growth. For the first time in Australia, we now have a pool of high quality executives interested in undertaking interim assignments for the medium-term and, not infrequently, as a long-term career choice. This has enhanced organisations’ ability to bring in interims for senior or sensitive assignments in the knowledge that they are recruiting top flight executives, not just those who are unable to secure a permanent position. One of the other interesting developments is the increasing use of interims in place of management consultants. Many organisations have a transformation or change programme that is relatively well defined but needs skilful implementation - in these instances a senior interim can, in many cases, bring a combination of a hands-on track record and a consulting mindset. And the cost/benefit of the interim option is usually very persuasive. Finally, a comment on the business cycle. Whilst one could construct an argument that the present economic malaise produces perfect conditions for interim - don’t hire a permanent executive in this market, just bring in someone for a short-term period - my strong view is that when the cycle turns upward, the increase in the number of acquisitions, growth projects, new start-ups etc. will significantly boost demand for interim managers. So, the interim management ‘industry’ in Australia has come a long way over the last four years but we’re really just at the beginning of a new methodology of senior executive staffing. Exciting times!
Nick Waterworth Managing Partner | Watermark Search International
EXECUTIV E SEARCH
•
BOARD APPOINTMENTS
•
INTERI M MANA GEMENT
WATERMARK’S INTERIM MANAGEMENT TEAM (left to right): Nick Waterworth, Danny Hodgson, Caroline McAuliffe and Greg Hayes.
INTRODUCTION Watermark Search International’s third Annual Interim Management Survey provides the most in-depth analysis of the Australian interim market yet. We have taken the temperature of over 300 professionals, comprising executive level interim managers with some independent consultants. The insight and distinct trends identified, provide both clients and executive hirers with valuable data to inform their resourcing plans. The survey also acts as a great overview for interims looking to benchmark themselves within the market. Thank you to everyone who participated in the survey.
HEADLINES • There has been a substantial swing towards the provision of ‘specialist skills’ as the motive for hiring an interim. • A significant uplift in daily rates this year, with 34% charging $1500 per day or more. • 65% of respondents have worked away from home on assignment and 89% would consider it. • The majority of assignments are lasting 1-5 months, but there is a trend towards 6-12 month assignments. • Less work in SMEs, with large private sector business and the public sector proving more fertile territory for interim assignments.
FROM OUR PERSPECTIVE We have been really encouraged by the development of the interim market in the past year. As a business,
the number of interim assignments we are handling is growing and there is a talented community of interim managers who are increasingly committed to working in this way. Whilst we are receiving more and more briefings, this survey also highlights the importance of effective networking. The majority of assignments not sourced through providers like us, come from old job contacts. Keeping those networks fresh is key to generating a good flow of work. We have also been busy spreading the message and promoting the concept of interim management as an effective resource for organisations. Presentations at various events, articles in the national press and business periodicals have all helped to push the concept onto the agenda, but there is no better promotion than an interim advocate talking to their networks about the positive impact and interim has made. The delivery process, from us taking a brief to an interim commencing an assignment remains artificially protracted. Hesitation and insecurity over the economy and the looming election has resulted in clients taking longer to hire interims: this is also mirrored in the wider executive search market. The general sentiment from over 500 comments we received was that the market is competitive and the economic climate is challenging. However, because of the value for money, experience and expertise interims bring, interim management is an increasingly important resourcing strategy within business.
Q1 RESULTS
Q1 Q1
YOUR GENDER?
79.1 80.2
Male
20.9 19.8
Female
0%
10%
20%
30%
40%
50%
60%
70%
80%
2013 2012
Q2
79.1 80.2
Male
20.9 19.8
Female
Q2 0%
20% AGE? 30% YOUR 30-39
10%
40% 4.3 4.4
50%
60%
70%
80%
90%
30.9 31.0a family life that can The blend of years of experience, energy and support working away from home on occasions sees 50-59 as the 49.2 most 50-59 popular age bracket for interims again. 52.4 40-49
Q2
15.6 12.3
60+
30-39
4.3 4.4
0%
10%
20%
30%
40%
2013 50% 2012 60%
30.9 31.0
40-49
49.2 52.4
50-59
15.6 12.3
60+ 0%
10%
20%
30%
40%
50%
60%
90%
RESULTS Q3
Q3 Q3
HOW COMMITTED TO INTERIM ARE YOU? 2013 2012
22.9 23.8
Very committed it's my career choice
35.2
Preference but will consider a permanent job
31.0 33.6
Looking for either permanent or interim work
38.5
Very committed Really only considering interim it's my career choice until a permanent job comes up
22.9 23.8
8.3 6.7
Preference but will consider a permanent job 0%
10%
20%
35.2 30% 31.0
40%
50%
60%
33.6 38.5 or are committed to Almost 60% of respondents would prefer Q4 working as an interim manager. It is a reputable and considered Really only considering interim 8.3 until a permanent job comes up career 6.7 move. Interim is less a community of circumstance and more a profession in its own right. Looking for either permanent or interim work
0%
Q4
Q4
10%
20%
30%
40%
50%
60%
33.6
27.0BEEN LOOKING FOR OW LONG HAVE YOU H 30.3 AN INTERIM JOB?
Less than 1 month
29.9
40.1
2-5 months
35.3 Less than month 6-121months
17.6 18.7 17.0
2-5months months+ 12
18.9 14.3 17.4
6-12 months
0%
2013 2012 2011
33.6 27.0 30.3 29.9 40.1 35.3
17.6 20% 18.7 17.0
10%
30%
40%
50%
60%
30%
40%
50%
60%
18.9 14.3 17.4
12 months +
0%
10%
20%
RESULTS
Q5
Q5
HAVE YOU WORKED AWAY FROM HOME Q5ON ASSIGNMENT?
65.1 66.3
Yes
34.9 33.7
No Yes No
0%
0%
2013 2012
10%
20%
34.9 30% 33.7
40%
50%
60%
70%
80%
90%
10%
20%
30%
40%
50%
60%
70%
80%
90%
The mobility of the interim market is a great asset to Australian business. Organisations with locations that are a barrier to hiring permanently can tap into a whole new pool of talent that are willing to relocate temporarily.
Q6 Q6
Q6
65.1 66.3
IF NOT, WOULD YOU CONSIDER IT? 89.3 88.4
Yes
10.7 11.6
No Yes No
89.3 88.4
0%
10.710% 11.6
20%
30%
40%
50%
60%
70%
80%
90%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
2013 2012
RESULTS
Q7
WHAT IS YOUR TARGET (OR CURRENT) Q7 BASE DAY RATE?
Less than $750
Q7 $750 - $1000
Despite an uncertain economic climate, daily rates have held up well this year. In fact, there has been a significant increase in those 1.4 earning over the $1500 per day mark. This could in part be down to 4.1 the increased confidence of hiring C suite professionals on interim contracts - a15.7 trickle up effect. 19.6
48.0 47.3
$1000 - $1500 Less than $750 $1500 +
1.4 4.1
$750 - $1000 0%
34.9 15.7 10% 19.6 20%
29.0 30%
60%
50%
60%
29.0 0%
Q8
50%
34.9
$1500 +
Q8
40%
48.0 47.3
$1000 - $1500
Q8
2013 2012
10%
20%
30%
40%
WHAT LEVEL HAVE YOU TYPICALLY WORKED AT?
61.2% General Manager 38.1% Project/Programme Manager 36.3% COO or Board Director 23.5% CEO 14.2% Technical Specialist 10.7% General Other Manager 61.2% 38.1% Project/Programme Manager 36.3% COO or Board Director 23.5% CEO 14.2% Technical Specialist 10.7% Other
RESULTS
Q9
Q9
WHICH FUNCTIONAL LEVELS HAVE Q9 YOU WORKED AT? 71.2% Board and General Management 71.2% Board and General Management 56.9% Project and Programme Management 56.9% Project and Programme Management 37.0% Operations 37.0% Operations 34.9% Turnaround 34.9% Turnaround 30.6% Finance 30.6% Finance 19.6% Sales/Marketing 19.6% Sales/Marketing 18.9% Human Resources 18.9% Human Resources 17.1% Other 17.1% Other 8.2% Supply Chain 8.2% Supply Chain 5.7% Procurement 5.7% Procurement
Q10
Q10 Q10
WHICH SECTOR HAVE YOU MOST RECENTLY WORKED IN?
Perhaps most surprisingly we have seen an increase in interims working within the Public Sector 21.0 Public Sector public sector and there are a number of 17.1 drivers influencing this. Firstly, after some 7.8 Charity and Not-for-Profit 7.8 significant redundancies within the public Charity and Not-for-Profit 9.4 9.4 sector, skills gaps have opened up which are 13.5 Private SME being plugged by interim resources whilst 13.5 Private SME 17.6 17.6 restructures are worked through. The large 8.9 scale reform agenda across government International SME 8.9 International SME 13.5 have also had an impact, with departments 13.5 increasingly looking to the private sector for 29.9 Private large 29.9commercially minded project and change Private large 24.9 24.9 professionals to drive reform, often on an 18.9 interim basis. Finally, the proliferation of Private ASX top 100 18.9 Private ASX top 100 17.6 interim managers within Australian business, 17.6 notably large private companies, is filtering 0% 10% 20% 30% 0% 10% 20% 30% through to public sector organisations who are increasingly seeking to benefit from the 2013 2012 value an interim can bring.
21.0 17.1
RESULTS
Q11 Q11
WHY ARE YOU CONSIDERING INTERIM? (TOP 3 SELECTED)
76.2% Work with different businesses 68.0% For the variety of jobs on offer 60.9% To work flexibly, even part time 41.3% To stay employed 33.1% To look at permanent opportunities once in post 12.5% To fit with NED commitments 8.2% Other
Q12
For the challenge! I love the variety and the “impact I can have through problem solving on a large scale. ” I have multiple skills, experience and “qualifications that can be applied in a range of situations. ” “To explore different organisational types.” As a transformation specialist the need is “varied from company to company and therefore provides me with a greater challenge. ”
52.2% Set for steady growth over the next 12 months 27.9% Demand will remain the same 9.8% No real appetite
6.5% About to take off
3.6% Shrinking demand
Quotes from survey participants.
8.2% Other
RESULTS
Q12 Q12
WHAT IS YOUR VIEW ON THE GROWTH OF INTERIM IN AUSTRALIA?
52.2% Set for steady growth over the next 12 months 27.9% Demand will remain the same 9.8% No real appetite 6.5% About to take off 3.6% Shrinking demand
I think the value proposition is becoming better “understood and therefore more attractive, both to employers and to interims. ” see it developing as a way for business “to Iaccelerate change and to ensure their transformations are sustainable through using interims to keep the momentum and drive.
”
I think there is a great opportunity, however “businesses need to be better educated as to using interim management to their benefit. The need is there but few may feel comfortable leveraging the available resources in the short term, given it may be a new way of resourcing for them.
”
“Will still be niche, but growing slowly!” Quotes from survey participants.
RESULTS
Q13 Q13
Q13
HOW WELL DO CLIENTS GENERALLY UNDERSTAND THE CONCEPT OF INTERIM? A high number of clients have had some experience of interim management or are open to hiring one in the future, however there is still some work to be done to sell the concept to more widely.
5.4 Comfortable with the concept with the concept and useComfortable them regularly 8.6 and use them regularly
2013 2012
5.4 8.6
41.7 43.3
Have some experience, not some experience, not consistent acrossHave the business consistent across the business
42.0 39.6
Need to be convinced, to be convinced, open to the Need concept open to the concept
10.9 Not open to the concept Not openitto the concept and do not understand 8.6 and do not understand it 0.0
Will never use an interim Will never use an 0.0interim 0%
Q14
41.7 43.3 42.0 39.6
10.9 8.6 0.0 0.0
10% 0%
20% 10%
30% 20%
40% 30%
50% 40%
60% 50%
60%
Q14
Q14
DO YOU THINK INTERIM MANAGEMENT POSES A SERIOUS SOLUTION TO THE LOOMING LEADERSHIP SKILLS GAP?
74.6% Partially, combined with other methods 74.6% Partially, combined with other methods 15.9% Yes, the availability of interims is the only answer 15.9% Yes, the availability of interims is the only answer 8.7% No, it will only be used sporadically 8.7% No, it will only be used sporadically 0.7% It wont be embraced at all 0.7% It wont be embraced at all
RESULTS
Q15
ARE YOU CURRENTLY ON ASSIGNMENT?
This snapshot of interims currently on assignment vs not, shows a positive swing from last year. Easing fears around the Eurozone Crisis, more work in state government Q15 reform programs and a general greater understanding of interim management could Q15 all be contributing factors. However, it is taking those who are off assignment longer to land their next piece of work.
Yes Yes
2013 2012
40.7 40.7
32.1 32.1
59.359.3
No No 0% 0%
Q16
10% 10%
20% 20%
30% 30%
40%40%
50%50%
67.9 67.9
60% 60% 70% 70%
HOW LONG DID YOUR ASSIGNMENT LAST?
Whilst most assignments continue to last between 1-5 months, the increase in those lasting 6-11 months is interesting. Over the last year we have found that many clients are taking longer to appoint candidates to permanent positions. Whether this is due to greater challenges in gaining approval to hire; fewer candidates looking to move jobs; or generally a more cautious approach; the result is often an extension for the Q16interim covering the gap.
Q16We are also finding that clients are impressed with the calibre and capability of
interims appointed and look to redeploy them to tackle new problems when the original deliverables are met. 2013 2012
15.7 14.8
Less than 1 month
15.7 14.8
Less than 1 month 1-5 months
31.3 33.8
1-5 months
6-11 months
20.3
6-11 months 12 months +
12 months +
31.3 33.8
24.6
24.6
20.3 0%
0%
10%
10%
28.4 31.2
20%
20%
28.4 30% 31.2 30%
40%
40%
50%
60%
50%
60%
RESULTS
Q17 Q17
Q17
IF ‘OFF ASSIGNMENT’ HOW LONG HAS THIS LASTED? 2013 2012
22.3
Less than 1 month
33.3 49.1
1-5 months
22.3
Less than 1 month 6-11 months
13.1 10.3 8.9
6-11 months
13.1
0%
10%
49.1 44.7 18.3 20%
30%
40%
30% 40% WHAT 0% WERE10%THE 20% REASONS FOR YOUR LAST ASSIGNMENT?
Q18 A 'gap' assignment
Specialist skills were required Maternity cover
18.7 21.5
50%
60%
26.9 30.0
2013 2012
44.8
26.9 30.0
5.6 3.8
0.7 1.7 5.6 Added resources 3.8 3.4 Covering a newly created job 6.8 0.7 Maternity cover 1.7 0% Covering a newly created job
60%
The provision of specialist skills remains the chief reason an interim is hired in Australia and even more so this year. Driving change and filling a management gap also remain key motives in hiring 18.7 interim managers. 21.5
Change management
A 'gap' assignment Specialist skills were required Change management Added resources
50%
10.3 8.9
12 months +
Q18
33.3
18.3
1-5 months 12 months +
Q18
44.7
36.3
44.8 36.3
10%
20%
30%
40%
50%
60%
3.4 6.8 0%
10%
20%
30%
40%
50%
60%
RESULTS
Q19
IF GAINING WORK THROUGH YOUR OWN NETWORKS HOW IS IT SOURCED?
Q19 Q19
69.7% Prior job contacts 69.7% Face Priorto jobface contacts 56.3% networking 56.3% Face to face networking 27.2% Online networking 27.2% 25.6% 25.6% 16.1%
Online networking Job boards Job boards events Networking
16.1% Friends Networking events 12.2% and family 12.2% Friends and family
Q20 Q20
Q20
HOW IMPORTANT ARE RECRUITERS IN SOURCING WORK?
46.2% Occasionally use them 46.2% Very Occasionally use them 44.3% important 44.3% Very important 9.5% Never use them 9.5% Never use them
10 TIPS
10 TIPS FOR HIRING AN INTERIM 1
DITCH THE JD/PD
Think clearly about the deliverables; focus the interim on specific tasks within a set timeframe.
2
FULL OR PART TIME
Put simply - agreeing to 3 or 4 days a week could reduce the budget by up to 40%.
3
INTERSTATE/REGIONAL OPTION
Most will work away from home which gives you access to a new pool of talent.
4
LEASE VS BUY ANALYSIS
When facing uncertainty, significant change or where a permanent hire is not appropriate, executive leasing offers the best flexibility on contracts, terms and notice periods.
5
GIVE THEM A MANDATE
An interim manager needs authority and access to resources from the top to deliver.
6
ASSESS THE ‘FLIGHT RISK’
The percentage of career interim managers in Australia is low, those looking at permanent work are still viable interim options in our market. Think about ‘lock in’ clauses or completion incentives.
7
DAILY RATES
Employment and fixed term contracts are often a preference but engaging through a daily rate offers more contractual flexibility, reduces headcount and is often the candidate’s preference.
8
KEEP TALKING
Talk to the interim manager and recruitment provider, monitor progress against deliverables to head off any mismatched expectation.
9
IS THERE A NEED?
Acting up arrangements can be successful, an interim is better suited when specific skills or higher level managerial expertise are needed.
10
DON’T SIT ON THE SHORTLIST
Even in tougher economic times, the very best interims enjoy high demand for their services.
CASE STUDIES INTERIM CHIEF INFORMATION OFFICER (CIO)
INTERIM CHIEF EXECUTIVE OFFICER (CEO)
THE CLIENT
THE CLIENT
A large public business specializing in medical services, research and product development. The organisation had grown significantly over the last few years and was diversifying the business into several new areas. The business has experienced some ‘growing pains’ and there was a need for new systems and processes to support the growth.
We were approached by the European major shareholder of a renewable energy business who were experiencing a time of management crisis due to a management dispute with local leadership. The business had grown significantly in revenue over the prior 12 month period, however, the business support systems and governance management had not been addressed.
THE BRIEF The business made the difficult decision to part company with their existing CIO but required immediate support whilst they considered their options for the permanent position. An interim CIO was required to assess the current situation, turn around several systems implementations and other business projects and provide some strategic advice to the CEO and Board and leadership to the team. The client needed a CIO who could be both strategic in their thinking but also technically strong enough to be hands on with the business.
WATERMARK’S SOLUTION Our client interviewed a shortlist of three candidates, under confidentiality agreements, in our boardroom. The successful candidate was a high profile and highly experienced CIO and interim manager with the right combination of skills. It also helped that the appointed interim had recently concluded a successful interim assignment sourced by Watermark for another client, with testimonials to support the work.
THE OUTCOME The interim brought stability, turned around projects with some substantial cost savings and has allowed the business the opportunity to properly consider their next move for the CIO position.
THE BRIEF Our client identified the need for a stabilizing influence to minimize damage and manage the business effectively whilst they reflected and prepared to conduct a formal search for a replacement. They wanted a seasoned executive with proven leadership qualities and strong operational and commercial experience. It was crucial that the interim was able to quickly gain the respect of the senior management team, the trust of the board overseas as well as have a credible reputation with key stakeholders in the local market.
WATERMARK’S SOLUTION We worked quickly, providing the Group CEO with a shortlist of four suitable interim managers who had the required skill sets, experience and leadership capabilities. Three of these to interview and appointed the preferred candidate within two weeks us receiving the brief. The interim appointed had many years’ experience in leading large and complex businesses and for the past four years he had worked as an interim manager in CEO or restructuring roles across a range of industries.
THE OUTCOME Immediate leadership stability and continuity during change, no loss of revenue or brand perception.
CASE STUDIES INTERIM CHIEF FINANCIAL OFFICER (CFO)
RECENTLY COMPLETED ASSIGNMENTS
THE CLIENT
Interim CFO (Professional services)
Watermark’s interim business was approached by a Queensland based, infrastructure organization whose CFO had resigned. The business was in a cycle of acquisition and growth.
THE BRIEF
Interim CFO (Infrastructure) Interim CEO (Professional body)
The business had instigated a full executive search process to find the replacement CFO however the process was taking a long period of time to identify and find the right person for the longer term needs of the business whose skills and experience were going to be paramount to its growth plans and long term strategic plans.
Interim CEO (Renewables)
There was a need for an interim CFO to step into the breach to undertake the CFO role on a day to day basis, manage the team and bring specific expertise to the programs of work currently underway in the business.
Interim GM Safety (Heavy industry)
WATERMARK’S SOLUTION Within two days of being briefed, Watermark Interim presented a shortlist of interim CFO’s available immediately whose skills and experience fit the brief required by the business, all available immediately to undertake the assignment.
THE OUTCOME The interim CFO was placed on an initial 3 month contract with the business which was subsequently extended twice. The Interim CFO was available to assist with a handover and induction to the incoming permanent CFO and also remained with the business for a short period afterwards in order to complete some specific projects for the CEO. The interim was able to fit in seamlessly from day one due to his experience at executive and board level and added tremendous value to the board review process.
Interim Chief Engineer (Transport) Interim CIO (Utility)
Interim CFO (Medical devices) Interim Corporate Counsel (Regulator) Interim Head of Operations (Food production) Interim Chief Information Officer (Biotech) Interim Chief Information Officer (Federal government agency) Interim Project Manager (Biotech) Interim OD Consultant (Higher education) Interim Director of Fundraising (Professional body)
THE RANGE OF WATERMARK SEARCH INTERNATIONAL SERVICE OFFERINGS Board ments Appoint
Interim Management
t rke ng a M ppi Ma
mark Water roperty ctual p intelle research and
Execu tiv Searc e h
Market Insights
ip rsh nt e d Lea ssme e Ass
EXECUTIVE SEARCH
INTERIM MANAGEMENT
LEADERSHIP ASSESSMENT
Watermark Search is a longestablished search firm specialising in C-level appointments. We have a strong in-house research enabling us to scour Australian and international markets for the best talent, rather than simply relying on advertising or our existing database.
One of the most rapidly expanding areas of our firm, the emergence of interim management in Australia is being fuelled by growth on the supply side: there are more top quality senior executives than ever before working on interim assignments.
BOARD APPOINTMENTS
MARKET MAPPING
Watermark advises many clients on the appointment of chairs and non-executive directors. We work with public listed companies as well as the government sector, government owned corporations, not-for-profits, etc.
We offer clients bespoke research on people and competitor dynamics. We gather first hand and up-to-date intelligence on a variety of sectors which can be used as a precursor to a search assignment or for internal benchmarking.
Our executive assessment programmes give organisations the quantitative insights needed to confidently groom talent for leadership roles. As a leader in executive search and board services, we have detailed knowledge of the top talent and insights into the qualities necessary for leadership this is complemented with objective, research-backed methodologies
MARKET INSIGHTS We have a unique ‘window’ in to the business, government and investment world and are available to provide informal market insights to our clients on topics such as salary packages.
WATERMARK SEARCH INTERNATIONAL T 02 9233 1200 WWW.WATERMARKSEARCH.COM.AU
