Interim Management
08.04.2021
Karl Moeremans

The benefits of an interim manager

To begin with, we must not confuse the interim manager with the temporary employee or consultant. Interim managers are highly qualified, and they are recruited to a particular role or project. And while consultants do stay on for a brief period, their role is essentially an advisory one. They do not participate actively in the business. Temporary employees are brought in to make up for a personnel shortage. Furthermore, interim managers present more benefits in certain cases than a comparable, permanent manager and can sometimes come as a more viable option.

  1. Interim managers are experts with incredible skills, knowledge and experience. They are highly qualified people who are normally beyond the means of many businesses and come in useful when a company cannot afford to wait while a permanent employee is recruited. When interim managers come to grips with the problems facing your business they will gladly pass on their knowledge and skills. In this respect, interim management carries a hefty short-term price tag, but produces long-term benefits and a sustainable effect.
  2. Interim managers are available immediately, whereas it can take months to fill an internal position with the right candidate. Interim managers do not require training or time to find their bearings. This ability to hit the ground running will save the company valuable time and money.
  3. Interim managers can identify problems which you may simply have overlooked. An interim manager presents an external view and can shed new light on many aspects of your business operation. Another advantage with interim managers is that they can draw parallels with the ‘best practices’ they have seen in other companies.
  4. As outsiders, interim managers tend to guarantee greater independence of mind and judgement than a permanent employee. They are with the company for a short period or for a particular assignment only. They are less likely to be distracted by other responsibilities. They are not bound to the business, and they are not influenced by the company's history or culture.
  5. The employer merely pays the interim manager’s daily rate. Bringing in a temporary manager can be more cost effective in certain circumstances because other expenditure, such as recruitment and training costs, holiday pay, company car and pension allowances, can be avoided.

The costs of an interim manager

We have already discussed at length the costs of recruiting an interim manager. Let's go a step further, by taking a practical example, to decide whether or not the cost of an interim manager would be prohibitive.

A company is in dire need of a senior Operations Director but has nobody in its ranks to fill the position. Leaving the vacancy open may well pose a significant risk to the integrity of the business. What is the best answer: (A) permanent recruitment or (B) interim management?

In this exercise we compare the full salary package for a permanent employee against the daily (all-inclusive) rate for an interim manager. By simply comparing the costs, we see a clear financial difference in favour of a permanent employee. It costs about 25% more for an interim manager. However, a fair and relevant comparison would take many more aspects into consideration:

  • Recruitment costs:the cost of recruiting a comparable role can easily run to € 30,000 (written off over 4 years).
  • Redundancy costs: interim managers work at a month's notice, no matter how long they have been at the company. This soon becomes more expensive for a permanent employee (written off over 4 years, which corresponds to six months’ salary).

 

EMPLOYEE

INTERIM MANAGER

 

Month

Year

Day

Month

Gross salary

7,500

104,400

 

 

Bonus 20%

1,400

19,488

 

 

Wage costs

3,204

44,600

 

 

Net reimbursement of expenses

250

3,000

 

 

company car

100

12,000

 

 

group insurance

700

8,400

 

 

lunch vouchers

120

1,440

 

 

fee

 

 

1,000

22,000

TOTAL

 

193,328

 

242,000

 

 

 

125%

 

Recruitment

625

7,500

 

 

Redundancy

1,088

13,050

 

 

TOTAL

 

213,878

 

242,000

 

 

 

113%

 

*based on 11 active months/year

With these costs added to our comparison the difference comes to just 13%. And there are a few important, non-financial aspects still to consider:

  • Deployable with immediate effect: an interim manager can be put in place in under two weeks (search, recruitment and contract included). The search for a permanent member of personnel, on the other hand, can easily take 3 to 6 months, or even longer. The table shows the average monthly costs.
  • Expertise: interim managers are experienced experts in their fields, which means that they have an immediate impact.

And if nothing is done in the end, and the role goes unfilled, this too can be a heavy expense for the company. Though pro memoria, this figure is certainly worth bearing mind.

Conclusion

Although interim managers are undoubtedly more expensive, they can offer a company real value for money. Their immediate deployability and expertise make them a viable alternative to permanent employment in many situations.

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