5 signs that interim management is a better choice than full-time recruitment

From the migration of critical processes to the cloud and move to remote working to the major resignation and major realignment, HR professionals have adapted to a dizzying pace of change. And with an uncertain economy and a corporate culture still in flux, the pace isn’t about to slow down.

Next year will certainly bring a series of new challenges, and there is one that HR departments are not looking forward to: dealing with the current high rate of staff turnover. HR leaders are especially under pressure when the musical chairs extend to the C-suite.

When interim management is the best option

Replacing top executives is disruptive, time-consuming, and expensive. Retained search firms, charged with finding permanent replacements for CEOs, CFOs and other top executives of the company, are often charged a third of the new director’s first-year salary, or a fixed amount starting at $100,000. And those are just the costs of executive search. Of course, hiring comes with long-term contracts, benefits, and termination benefits that make it imperative that the new full-time executive is a perfect fit for the company for years to come.

Because of this daunting process, HR professionals often hire interim executives to fill gaps in the C-suite. Interims can be a convenient alternative to full-timers and often bring experience and skills to keep an organization on track in turbulent times.

In the coming year, HR departments will consider a range of different hiring scenarios to cope with economic headwinds and rapidly changing company culture. Many will decide whether they need a new permanent full-timer or whether the relatively simple process of hiring an interim executive is the better option.

I’ve talked to hundreds of companies about both options and helped many find interim management. Below are five common scenarios where choosing an interim executive is probably the better choice.

Topman suddenly leaves

Executives leave a company for various reasons. Sometimes an executive finds a better opportunity or leaves for personal reasons, or a company feels that the executive is no longer a good fit. Whatever the reason, leaving top positions vacant for long periods of time is bad for business.

At the same time, a high-level departure often indicates that a company needs to make fundamental changes to move forward. This puts HR departments in the unenviable position of quickly finding a new “perfect fit”. An interim appointment gives HR some breathing space and at the same time sends a clear signal to the market that the company is not a rudderless ship.

The interim can also assess and help resolve larger issues facing the company and help determine what kind of permanent leader will be needed. They can help with the search process and ensure a smooth transition.

Company is growing fast

An interim assignment is a great option for companies that lose a top executive while growing rapidly. Growth brings a range of new challenges, and overcoming them often requires new skills that are not necessarily in-house. Some interim executives have extensive track records of launching new products, entering new markets, or otherwise scaling a company. Interims can set up business structures and processes that can later benefit a permanent manager.

The company is considering a merger or acquisition

Companies need to build value quickly – and be able to show it – when potential buyers are around. Interim management can be an asset in a time like this. This is especially true if the leadership team has lost one or more members, is pressed for time, or lacks in-depth experience with the M&A process.

Many interims, especially CFOs, are specialists in the due diligence process and other aspects of M&A. The existing C-suite may have many useful skills for the tedious process of making deals, but many companies benefit from tapping specific expertise in this area and obtaining it on demand.

Company is in trouble

Few executives train specifically for worst-case scenarios. But many interim executives are trained to shine when a company is “on fire.” These ‘black swan’ scenarios can range from management misalignment to skyrocketing costs, from fierce competition to fraud or unethical practices, and can shake an organization to its foundations.

This is often the time when a company needs to look at the dilemma from a new perspective. Interim execs – especially those who are “fixers” – offer that perspective and more. They come up with solutions that stem from years of experience running in and out of ‘burning buildings’.

The company is on the eve of a major change

ERP implementations, product launches, roll-outs of new production facilities and other major technical changes present a challenge. While the existing team has conceptualized and planned for these types of major changes, companies often need help with implementation.

Many interim managers essentially function as boots-on-the-ground, overseeing the work required for fundamental change. Many organizations already have great thinkers and meticulous planners, but need a doer.

With so many economic challenges facing businesses in virtually every industry — and revenue still a persistent problem — it’s certain that there will be gaps in corporate leadership teams in the coming months and years.

Some companies get lucky and quickly find a permanent replacement for departed executives who are considered a perfect fit. But many others will choose a more convenient, flexible, and less risky way to ensure their company has the leadership it needs.

Like most things these days, business acumen and expertise can be acquired on-demand and as-a-service. And there are many times in a company’s life when acquiring it this way is the logical option.

Olivia Wagner is a co-founder of InterimExecs and co-author of Right Leader Right Time.