Russam Frontline 10: Interim Management – Uncertainty kills business confidence – but does it kill Interim Management?
The budget is imminent and I tend to agree with the rather blunt criticism last week from the Federation of Small Business who described the new Employment Rights Bill as “a rushed job, clumsy, chaotic and poorly planned.”
The Bill basically ignores the self-employed which includes our beloved our Interim Managers; it kicks the “can down the road” in terms of clarity on future working structures and changes like IR35. It is about time that we had – for our prosperous self-employed/freelancer population that has grown to at least 15% of the workforce – a system of proving genuine, self-employed status. The CBI (I haven’t heard from them in a while) call this an IR35 “green card” system. Interim Management is just a small part of the overall self-employed market but I think of it as a “gem” and we are fighting our corner to ensure it survives. It would be nice to spend less time talking about tax and more time talking about skills, experiences and culture.
We place genuine, self-employed Interims but we’ve seen 6 of the last 12 placements fall “inside” of IR35. I’m not sure why really but certainly the “mood” of our client organisations is about the perceived risk and worries about getting things wrong. Almost all of our clients point out to “grey areas” in terms of making IR35 determinations and the change in government. This is often detrimental to those working on an independent basis; they are having to change how they work and move over to umbrella firms (a totally unregulated market and often with high fees; and of course without protections like holiday pay, sick pay – so a double whammy) and flip flop on how they structure their own personal service companies. It is not about tax. They are being drawn closer and closer to being an employee which in many cases they don’t want.
The climate isn’t great – please see my latest post here.
Over the past year we are hovering around 50% of all Interims surveyed feeling negative in terms of the outlook for new assignments. But at least half our positive or neutral and things can change quickly in our world . . . certainly quicker than perm recruitment at a senior level.
But is all the regulation to protect employees in the Bill good or bad for Interim? Will it lead to more use of flexible skills and labour options especially in areas like technology and marketing to the gig economy?
My view is that there is still too much uncertainty; we are still in a cost of living crisis, still have wars going on, wage inflation, and other negative economic and geopolitical factors; and now we are talking about higher employment costs and risks. The “unfair dismissal from day one” will make hiring managers think twice and then the latest announcements regarding higher employer NIC and increases in capital gains tax (the private equity market are big hires including Interim Managers – they get the concept). I don’t think it is just one or even two of these things putting the brakes on. All this, in my opinion, will add up – especially for SME firms (like Russam) and could make Labour the “party of less working people.”
Will the reduction of hiring for perm roles translate to an equal increase in the use of self-employed? I’m not sure it will but – my crystal ball moment – I think we will continue to move towards the US model where “freelancing” accounts for 36% of the workforce (compared to us at 15% according to the ONS). It will move that way with or without legislation; it is so much – especially post-Covid – about lifestyle and a working partnership.
Merits of thinking Interim.
The September to Christmas window is historically our strongest for new interim management business and when we commence half of all assignments. We are up 6% year-on-year but it should be stronger based on what I’ve said and feels a bit like walking on a sandy beach and not making maximum progress.
But this is a great time to bring in an Interim. These wonderful, over-qualified and talented people thrive on: chaos, uncertainty, change . . .they thrive on tackling tough problems, they bring in fresh ideas, they are objective and don’t have an axe to grind; they coach and support the permanent team. They leave a sustainable capability. They can start as an Interim and then transition to Perm “try before you buy.” They are trusted advisors and the relationship is highly transparent, professional and two-way. Perhaps it is the purest form of employment!
And we are no longer “Pioneering” the concept of Interim Management in the UK; there is a good awareness for the value of Interim Managers; we just back from our global Interim Management conference in Brussels I can tell you that we are the envy of many parts of the world. Interim is a mature concept here and well understood alongside Management Consultancy.
If you need a reminder of the power of an Interim then please reference: https://russam.co.uk/embracing-the-power-of-interim-executives-a-strategic-insight-from-russam/
In summary, the Climate isn’t great for Interim Management but should be!

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