Contingent workers – Interim management
We all constantly hear about digital disruption, globalisation and where technology is taking us. The impact in the workplace is dramatic and absolute. The changes are structural, not cyclical. 60% of 567 members of the Economist Intelligence Unit reported that by 2020, industry will bear little resemblance to today as a result of technological change and globalisation. Organisations that do not need people full-time, will not hire them full-time, they will hire them on an interim basis. In reality the pressures of technology and globalisation force companies to bring a greater efficiency to their operations in a continuing requirement to reduce costs and remain competitive on a global stage. The McKinsey Institute describes this as “technology makes it possible for companies to manage their labour as a variable input”.
This concept aligns with interim management as delivering on the concept of variable costs is exactly what interim managers do. They are brought in to use their deep experience and well-honed skills to deal with specific issues/problems/crisis or to implement new initiatives. They are not looking for a job, they want to implement and deliver outcomes, not engage in office politics. More importantly, they leave when the project is delivered with a reputation that helps them get the next assignment, not job. This is the true opportunity to deliver the variable costing model.
Whilst a fairly immature industry in Australia, the interim management industry in Europe and the UK has been around since the 1970’s & 80’s derived from the oil crisis where companies needed very experienced executives quickly to use their skills to turn the organisations around in a volatile environment. Growth continued in Canada and North America where more recently the GFC has fueled the need for interim managers. In Australia we are seeing the industry slowly grow due to business economics and our demographics. The Australian economy is somewhat stagnant with difficult growth forecasts and a lack of confidence in the economy. This has an impact on the hiring of full time staff, in contrast many companies have been and are retrenching staff. This in turn means there is a growing supply of very skilled and experienced executives who in many instances are in their more “mature” years and are looking for the flexibility of interim work. Many have decided that a full time role is not what they are looking for and are at a stage in their life that they can handle the variability of interim management.
This change in mandate for mature executives is also driven by the dramatic change in life expectancy. In prior decades we went to school, perhaps went on to a tertiary education, got a job and perhaps stayed with that organisation for our entire working life. Beyond that, a pension was generally sufficient to cover life expectancy. Today our life expectancy is beyond 90 years and as a result our pensions will not secure us based on a retirement age of 65. Indeed today there is really no retirement age, “jobs” as we know them are gone and individuals must now create a portfolio of income generation from serial employment engagements – all which gives rise to the interim manager.