Financial services firms take a look at interim managers

A move late last year by Korn/Ferry, the world's biggest headhunter, into interim management services is focusing renewed attention on the sector.

Many companies and especially public sector bodies are turning increasingly to interim executives to handle change management and to provide chief executives and top level financial, marketing, production, IT and HR specialists.

Investment banks have made little use of interims so far, despite hiring many contract staff for more junior positions. But this could be about to change.

Banks are well aware of the value of interims, as they sometimes help to bring them into privatised businesses that need new management and financial flair - such as the Stationery Office in the UK, where the interim provider BIE supplied a team of turnaround specialists.

Another interim provider, Russam GMS, has supplied senior financial specialists for venture capital funds and for new investment situations.

As the bear market drags on, with fewer mergers and IPOs and less need for permanent employees, financial services firms might consider a wider use of interim executives by organising more work on a project or assignment basis.

Suitable sectors could be financial analysis, corporate broking and fund management.

"Interims could also play a more powerful role in support functions in the City of London - marketing, HR and IT," says Patrique Habboo, managing director, Praxis.

Praxis said it recently finished a marketing assignment for an investment bank and a strategic marketing project for a German bank's new credit card launch. A US bank used three interim HR directors to oversee integration issues, following several acquisitions in the last 18 months.

Another interim agency, Penna International, said it was working on eight assignments in the City of London, mostly change management projects, for an investment bank, a retail bank, an insurance company and a European financial conglomerate.

To take advantage of any openings, redundant bankers, traders and other specialists should adapt by considering becoming interim managers.

The key is to establish what your particular skills are, offer a specialist service on an assignment basis starting with known contacts, operate as a small business and to get working on self-marketing.

This means regular contact with known prospects and registering with two or three reputable interim providers.

They tend to be harder to impress than ordinary recruitment agencies. They will want to check out not only what you have achieved, but what you might contribute to a future client, as they will be recommending you.

One reason why interim managers are making an impact in industry is that, unlike management consultants who analyse and recommend (and charge twice as much), interim managers can do the implementing as well as the dissecting.

Pay levels are rather lower than those that many bankers and traders are used to, but after two or three successful assignments to prove your expertise the average daily rate of 500 to 600 can rise significantly.

Many interims earn l,000 plus per day, some reach l,500 and even 2,OOO.

That does not necessarily mean an annual income of hundreds of thousands of pounds a year. There will be gaps, both enforced and of your choosing - for longer skiing holidays and periodic focus on self-marketing.

Even when better times return, bulge bracket bankers, brokers and other City financial institutions may have to get used to thinner staffing levels.

Banks are reviewing how many functions really necessitate a regular, full-time role; and how many can be equally well managed on an interim basis.

One advantage of using interims is that it avoids problems associated with employment legislation.

And if the assignment doesn't work out, as one employer observed, you send the manager packing and ask for another. You pay a premium price and you expect a premium performer.

The premium price includes all the added-on costs incurred by employees, such as car, pension, insurance, etc.

Interim management is attracting younger candidates nowadays - in their 30s and early 40s.

Russam GMS says: "More young professionals are attracted to interim management once they've gained substantial experience and have the necessary consultancy and implementation skills, and the gravitas to work on challenging short-term assignments."