Manufacturing sector helps fuels growth in Interim Management Market

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Russam GMS, the UK interim management recruitment provider, this month highlighted positive growth in the interim management market during 2012, according to its twice-yearly benchmark survey. John Wilson, Head of Manufacturing at Russam GMS, discusses how the manufacturing sector is increasingly turning to interims and why.

Manufacturing and logistics companies tend to be very lean organisations, but when they get an increase in demand, want to expand or have a special project they need to get off the ground they often have to look outside the organisation for additional resources. Many are turning to interim managers as they offer a flexible, cost effective and low risk way of resourcing projects.

We run a twice yearly interim management benchmark survey and our latest research published in January highlighted a 3% growth in activity in the interim management market from December 2011 to December 2012. The survey also showed that the manufacturing and engineering sectors were the number one users of interim managers, with these sectors accounting for 11% of assignments.

It seems there are a growing number of manufacturers are hiring interims to cope with increases in business demand or to spearhead business projects in spite of a flat economy. In particular, there has been a rise in demand for project managers, as well as for UK interims to work on international assignments in the EMEA area. We see the overseas market as a major area of growth in the future, which is why we launched Russam International last year.

Injecting new skills and fresh ideas

The interim market tends to expand when an economy moves out of recession and this is a trend we are seeing. Often companies are risk averse and so are reluctant to hire full time permanent staff at a senior level when the economic outlook is uncertain. However, they find they still need an injection of new skills and expertise to progress projects or to react quickly to increases in demand. Hiring an interim offers an affordable and low risk way of obtaining these skills quickly.

Our research also showed that there is move away from businesses using interim managers as 'gap fillers' and that companies are using them far more strategically. 55% of interims are now recruited to provide specialist skills absent in their client's business; 39% to implement new strategies and 36% to work on special projects. Just 14% are hired to cover temporary absences or sudden departures - down slightly from 15% in June 2012.

Interestingly, the number one interim job discipline was change management and transformation – making up 23% of all assignments. Change management has emerged as a new job discipline across many sectors and increasingly, CEOs are hiring interim change management experts to help them handle their toughest business challenges.

Another area where we are seeing growth is in supply chain optimisation. Firms are using interims for short term assignments to reduce their supply chain costs. They are calling in these experts to analyse their costs and ensure the business isn't paying over the odds for products or services. This could be anything from toilet rolls to energy as savings are incredibly important when budgets are tight. Negotiating contracts, getting new suppliers on board and ensuring the cost-effectiveness of suppliers is crucial for manufacturing firms and this is one area where interims are adding great value right now.

How Interim Managers can transform a business

One example of how an interim has helped transform a manufacturing company is Dennis Rolfe. Dennis Rolfe is a successful interim manager who was taken on by Aero Inventory, an aircraft parts supplier for a 12 month compliance project and later a customer relations role, to develop the business into a saleable going concern after it had gone into administration. His role included ensuring all aspects of the business were compliant, helping to re-launch the business, as well as later becoming Head of Customer Service and Head of Supply Chain, as senior management expertise was required in these areas as the business developed.

Dennis was also tasked with recruiting a permanent employee to take over as Head of Compliance. His unique mix of skills and experience, including general management, change management as well as his expertise in compliance and import and export legislation meant that he was instrumental in supporting the business turnaround and helping to generate around £2 million worth of sales a month, up from zero when he joined.

As this assignment shows, Interim managers offer a great solution for companies who want to access senior level experience quickly and need that person to lead a project from start to finish.

How much can I expect to pay for an interim?

Remuneration depends on a range of variables, including someone's area of specialisation, experience and the nature of the assignment. Typically clients can expect to pay around £600 a day for an experience interim. However, if clients want interims to work overseas they tend to have to pay more.  Our Snapshot survey showed that daily rates for international interims have increased from £718 to £759 a day – indicating the overseas market is less influenced by domestic economic factors and that businesses are willing to pay more for quality interims with the right language skills and market knowledge.

Interestingly, those working in supply chain have seen their daily rates increase from £482 in June 2012 to £658 by December 2012 – highlighting the increased demand we are seeing for interims in this sector. Daily rates for the engineering and manufacturing sectors however were slightly down for the same period, from £586 to £568.

Vital resource helping to maintain efficiency

Interim management is a low risk and flexible option for any business that requires senior level skills and experience, without the financial commitment of taking someone on full time and all the associated benefits such as pensions, health care and bonuses.

They offer a quick, cost-effective and flexible way to get the right skills into a business to enable it to move forward and grow and for many manufacturing and logistics companies, operating on an increasingly lean basis this can be a vital resource.

The manufacturing sector on the whole is strong but businesses have to manage resources carefully to maintain efficiencies and remain competitive. The judicious use of interim management will continue to play a crucial role as businesses strive for growth and the economy starts to picks up.


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