Guess what? Payroll managers are cheaper than interim managers. But you should still hire an interim manager. Find out why.
According to Federgon, the Belgian Federation of HR suppliers, one in three companies hire interim managers supplied by interim management firm. While the number of interim managers in 2018 was up by 12.9% on the previous year, the number of assignments raised by 13%.
The answer to the question ‘Why hire an interim manager?’ lies in the added value a company gets from an interim manager: flexibility, availability, expertise, experience and knowledge.
When considering the costs of an interim manager, there are three main things to take into account.
1. Recent job market trends
- 5.1% of vacancies in the service sector remain unfilled
- Knowledge gap: the demand for knowledge is inversely proportioned to the available knowledge on the market
- General economic growth
- Ageing: for every ten employees retiring, only eight new employees will be available by 2026
- 27% of interim managers and freelance consultants are not seeking a permanent job
All of these elements converge into one major challenge for the job market: availability.
2. Expertise and knowledge needed to face the Industrial Revolution 4.0.
The Fourth Industrial Revolution is marked by technology breakthroughs in a number of fields, including robotics, artificial intelligence, nanotechnology, quantum computing, biotechnology, the Internet of Things, 3D printing and autonomous vehicles. So how prepared are organisations and leaders to embrace this evolution?
By hiring interim managers from interim management consultancy firms, companies are sourcing the knowledge and expertise needed to rise to the challenge of the Industrial Revolution 4.0.
An interim manager can lead and roll out large-scale digitalisation projects, train talent and ensure knowledge transfer, lead departmental reorganisation and support the growing ambitions of forward-looking companies.
According to research, the most important drivers behind an interim management assignments are:
- 62% Project management
- 57% Digital transformation
- 51% Ensuring continuity of activities
And when we look at the outcome, 90% of companies are satisfied with the results of their interim managers.
3. The real cost of an interim manager
C IM = ∑ C EM + ADDED VALUE IM
The cost of an interim manager is equal to the sum of the cost of a payroll employee plus what you would pay for the flexibility, availability, expertise, experience and knowledge to have an issue solved promptly.
“From this perspective, hiring an interim manager is much more cost-efficient than hiring a full-time, permanent employee.”
So the decision of whether or not to hire an interim manager – and ultimately the difference in cost – comes down to this added value.
In terms of actual investment, the cost of an interim manager is typically based on a standard day rate. And the amount you are invoiced per month is strictly limited to the number of working days, multiplied by this day rate.
From this perspective, hiring an interim manager is much more cost-efficient than hiring a full-time, permanent employee.
Below are the typical day rates for an interim manager, according to marketing and sales expertise, and seniority:
Do you have a project in mind where an interim manager could bring you better results, faster?