Hiring someone full-time is not always the best way to fill a management vacancy. Below we examine the growing trend towards interim management, and on page 29 we look at how charities can arrange successful secondments.
A FRESH LOOK
Interim managers can bring a new perspective and a wealth of experience, writes Gary Flood.
Charities think nothing of hiring temporary cover for someone who looks like they'll be off sick for a week or two, and they wouldn't balk at the cost of placing an ad in a national newspaper to get suitable candidates for a senior post, such as a new HR or finance director.
But very few combine the two - hiring a temp who just happens to be a very senior person doing a short, focused job. Or, as Richard Chiumento, a director at specialist executive recruitment firm Rialto Consultancy, says: "Recruiting someone of great experience for a short project, usually four to eight months, to solve a particular problem or help you bridge a short-term crisis."
Welcome to the concept of interim management, a practice well established in the private sector and increasingly common in the public sector, but as yet almost unknown in the not-for-profit sector.
The reason why most charities don't even consider the idea is simple: cost. Benchmark figures from the Chartered Institute of Personnel and Development put the daily cost of hiring the kind of heavy-hitter that would best fit the interim management profile at about 1.2 to 1.4 per cent of their equivalent permanent salary. You can estimate the cost to be £300-£500 a day for middle management candidates, £400-£1,000 for their senior colleagues, and £2,000-plus a day for top-level players.
Given those kinds of numbers, it's no wonder that recruitment agencies active in this field estimate that (with their fees included) the global interim management market is worth about £400m per year. These figures seem bound to make even the biggest charities uncomfortable.
That might be a mistake for two reasons, according to experts and the small but growing number of charities that say interim management provides value. The first is that over-concentration on that headline £500-a-day figure is actually poor economics because, surprisingly, it is often less than the cost of hiring someone full-time or getting a consultant in.
Second, using the interim management solution can provide charities with benefits that other options, such as hiring a consultant, cannot. Is it time the third sector changed its mind on the platinum-priced temp?
Very much so, according to Mike Whitlam, former director general of the British Red Cross and UK director of Save The Children, who last year joined interim management recruitment leader Russam GSM to help kick-start its charity business.
"The concept of interim management has been gaining acceptance in the private sphere for 12 to 15 years but has never been seriously tried in the charity sector," he says. "There has always been a need for interim managers - it's just that we haven't known where to find them."
Whitlam claims that in his own management experience he has often found himself working his Filofax to get an experienced person to come in for a short time to cover while a new department head has to be recruited, or to help make most effective use of an unexpected funding opportunity. He thinks his peers have had similar experiences.
"Ask yourself if you need someone in that position for five days a week," he advises. "Do you want to pay them for holidays or sick leave? The running costs of an interim manager often work out to be a lot less than for hiring a consultant, which is what charities usually resort to when they address that kind of short-term problem. But the problem with consultants is that they aren't really under your control and can even end up costing you two or three times the interim manager day rate."
Loyalties come into play as well, adds Rialto's Chiumento. "The big difference between an interim manager and a consultant is that the former is loyal to your organisation for the term of his contract, not to the consultancy," he says. "The interim manager comes in to implement your plan, not dream up their own."
The theory is that you hire an experienced executive on a short-term basis. This person may have done similar work for a range of organisations, and will have seen many ways of skinning the cat in question. They will bring to your team the benefit of both their experience and the latest thinking on the best way to do the job. The bonus is that they are working for and reporting to you, not a third-party consulting firm. At the end of the contract, when you have either hired a permanent figure for the position or the need for outside help has gone, he or she walks out of the door to the next assignment.
Take Stan Felstead, an interim manager for 12 years who's worked at 17 different places, ranging from multinationals and the Charity Commission to nuclear submarine facilities. "I started out in local government, went to work for a bank, then moved to a business school," he says. "I like challenges and I quite like change - I want to provide direction and leadership but broaden and deepen my knowledge. I truly believe organisations that use interim managers benefit from fresh pairs of eyes coming in. They help to get things done, as well as offering a perspective on how it's being done already."
Felstead insists that the costs of interim management make sense. "The sort of top-level person you're talking about might cost £50k-£80k to hire full-time. But that cost is actually higher when you factor in insurance, other benefits and all the take-on costs you get for a permanent employee.
And you might only want that £80k person for a short period. There is also the daily cost of not using anyone at all, which can mount up if it takes a while to hire the right individual."
That's if you can even find them, warns Chiumento. "As the charity sector gets more competitive, especially in the job market, the interim management approach offers a different way to bring in experienced professionals without getting into bidding wars with other charities," he says.
The experiences of charities that have used interim managers seem to back up some of the theoretical benefits. Guide Dogs for the Blind hired an interim using Russam GSM. Its chief executive, Bridget Warr, says: "The interim has not only been an extremely competent director of finance for the past few months, but has also brought a fresh perspective to some of the issues we experience. This will help in the induction of the new, permanent finance director."
Animal charity PDSA has twice used interim managers in the recent past, and found the process useful, says director general Marilyn Rydstrom.
"We used someone in our marketing and income generation function in 2003 and now have someone in the finance and business development side," she says. "They've produced great results for us."
Rydstrom, who is now working with Russam GSM, sympathises with some of the reasons other charities are reluctant to take advantage of this kind of solution. "Of course there's some nervousness about the up-front costs, and they're not negligible," she says. "The bigger charities can probably manage this more easily.
"But there is enormous value in this that all sorts of charities should be aware of. You're paying for people with a very broad basket of experience, and that is worth considering. You've also got to realise that to hire a senior person could take six months - three to find the right one, then another three for them to work their notice. You could get badly caught out."
She says the main benefit to her charity of using an interim manager has been the opportunity to "take stock and think about what we wanted to do". She adds that in her experience interim managers can be "useful sounding boards for chief execs on all sorts of issues" and that they are blessedly free of internal politics.
There does seem to be enough in the interim management approach to warrant exploration. But be aware that issues can arise. Because they typically come in on short notice, the interim manager can sometimes cause ripples in the existing team, members of which can feel the usual emotions about an outsider being given an important task. There may be resentment from incumbent managers who see them as dilettantes or who interpret an external expert coming in as a vote of no confidence.
Nevertheless, the bigger charities may well feel that such people management issues are worth taking on for the wider benefits a short-term super-temp can bring.
As for the cost, some agencies say their charges will be no more than the equivalent full-time salary for the candidate. And the roster of charities that have tried the technique is growing, including Help The Aged and Oxfam.
In fact, charities may find that they can't afford not to seek interim management expertise. As Whitlam puts it: "Charities that find themselves increasingly providing public services might find they need specialist help that would be too expensive from consultants, and which it might be hard to find full-time talent for." Could it be interim management or nothing?
CASE STUDY - THE PRINCE'S TRUST
MARTINA MILBURN, CHIEF EXECUTIVE, PRINCE'S TRUST
Our charity, founded in 1976 to help young people, has benefited incredibly from the interim management approach, and so did I. I came in as chief executive of the Prince's Trust just under a year after being recruited from running BBC Children In Need, but my predecessor and his deputy had left about six months before. Allan had been running the trust from October 2003 to May 2004 after our management council accepted a recommendation from our chairman, Sir Fred Goodwin, who is also chief executive of RBS, to use executive help from his team while the recruitment process ran through. This meant there was no loss of momentum organisationally.
The charity benefited from Allan's involvement before I came along, and as soon as I could I began to sit in.
The handover period was about six weeks. Allan took himself out of the picture but was on hand to offer support and advice.
One reason I think this all went so well was the close relationship we have with RBS, which is a major supporter of our work with young people.
We have been very lucky with that support, but there was no sense of Allan being parachuted in to take over- he came to do a job, as agreed by the council.
From the start there was an appreciation that it can be difficult for staff when there's change at the top. But Allan was at pains to ease those fears, and I think the fact that his time was a success can be seen in the way that many of the ideas he brought in are proceeding so well after he helped start them. These included changes in governance, the way we can improve internal communications, and our big change management programme.
I can't really see why there's so much resistance and whingeing about interim management in the charity sector, which I've been working in for many years now. Is it a political issue?
ALLAN WATT - THE INTERIM MANAGER
My 'day job' is head of group branding for community investment and brand communication at RBS. I've actually worked in all three sectors now - public, private and non-profit - including a stint at the Scottish Development Agency. Before taking on the temporary chief executive position, I was lucky enough to be fairly familiar with the trust and its aims.
But we were conscious of the need to reassure people from the start that I wasn't coming in as an outside 'genius' to sort everything out. In fact, no matter what issue we looked at, we always found the answer somewhere within the resources and skills of people in the trust itself.
I came on board at a good time in the sense that a full financial and operational review was scheduled, which allowed me to go around all the regions of the UK and physically see and communicate with staff. I found that, as a whole, the trust is absolutely excellent at what it does. But it's not excellent everywhere, so I saw a need to try and transfer some of that best practice to the areas that could most benefit.
I saw my role overall as making sure the business plan, especially finances, was in the right place, but also to help review the whole management process and how we governed ourselves. With some of these issues I was able to give direct advice because I know how to manage a loan portfolio, but in general I wanted to get the team to communicate and really think about who the organisation is aiming to benefit.
People are attracted to working at the trust because of the fantastic work it does. That's what motivates the best sort of people in the business - to be part of something they feel pride in. If staff admire the organisation as well as the goal, I think you get the very best out of people. For too long people coming from the private to the non-profit sector have missed that, dismissing too much of it as 'fluffy', but my experience here has proved to me that charity people have at least the same level of focus and skill as those elsewhere.
RESOURCES: WHERE TO FIND OUT MORE
The Chartered Institute for Personnel and Development (www.cipd.co.uk) has a recently updated factsheet on interim management (type 'interim managers' in the homepage search function).
There are also two representative bodies: the Institute of Interim Management (www.ioim.org.uk) and the Interim Management Association (www.interimmanagement.uk.com).
Some executive recruitment agencies can also help:
- Charity People has an interim management service. See www.charitypeople.com/clientsenior.asp
- Executives Online is at www.callcentremanagementonline.co.uk/p204.html
- Parker Bridge specialises in the financial executive end of interim management at www.parkerbridge.customer.areti.co.uk/indexUK.html
- Praxis provides a guide to the concept at www.interimmanagement.com/aboutus.asp
- Rialto Consulting is at www.rialtoconsultancy.com - Russam GMS is at www.russam-gms.co.uk
THE STAFF TRANSFER MARKET
Secondment can be mutually beneficial, but it must be carefully planned, writes Catherine Everett.
Secondment is one of a menu of training and staffing options open to the third sector, and it can produce real and sustainable benefits as long as expectations are managed effectively on all sides.
According to the Chartered Institute of Personnel and Development, secondment can be defined simply as "the temporary transfer of an employee to another department" or "the loan of an employee to another organisation".
Although the aim is to provide staff with career development opportunities and to enable participating organisations or departments to expand their skills base, secondments from commercial companies or public sector bodies, which are the most common, typically fall into two categories.
Development assignments are intended to broaden the expertise and work experience of staff before they return to their employer or department, and are often viewed as an alternative to formal training. They are usually short-term, lasting from three months to a year, and can be either full-time or operate on a day-release basis.
Transitional secondments, meanwhile, are a means of supporting 'outplacement' activities during periods of change. These can include redundancy, retirement or career moves, but initiatives are generally full-time, last between six months to two years, and are intended to act as a bridge. Staff are unlikely to return to their employer after this time, and secondment can help people to re-skill and adjust.
Business in the Community's Caroline Peat, who manages the Percent Standard, BITC's benchmarking programme for corporate donations, is approaching the end of a two-year transitional secondment from Barclays Bank. "I saw it as an opportunity for a career move," she says. "I doubt if I'd even have got an interview at a charity before, but I've developed a whole new set of skills and it's given me an understanding of how charities work."
BITC encourages private and public sector organisations to contribute positively to their communities. It brokers secondments as part of this strategy, but also undertakes them itself.
However, Amanda Jones, BITC's employer community involvement projects manager, says transitional secondments have become less prevalent over recent years as "companies have got leaner".
These days, the most common secondments are developmental, which are often undertaken by larger companies and public authorities as part of wider management training and development initiatives, covering all levels from graduate trainees to senior executives.
It is much rarer for charities to second their own staff to third parties, although it does happen occasionally, particularly to relevant government departments, where it can be useful for managers to understand how such bodies operate.
"It's simple economics," says Jones. "Most charities can't afford to pay salaries during the secondment period, and it can be difficult to fill the hole."
Managers are not the only employees to benefit from secondment. It is rare to offer secondment to run-of-the-mill office or administration jobs, but it is possible and the key to success is in the approach. Jones's advice is to look at the situation creatively. "Maybe devise the secondment as a consultancy opportunity to find out how the seconding organisation's admin systems work, so you can streamline your own and make them more efficient, which will have long-term benefits," she says.
Such recommendations also reflect the fact that the most successful secondments are project-driven, with defined milestones, attainable objectives and clear outcomes. Not only does this enable employees to hit the ground running because they understand their roles and responsibilities, but it also increases job satisfaction because they can see concrete results. Structuring activities in this way also makes it easier to provide progress reports to the seconding organisation or internal department so they too can witness the tangible results.
By the same token, the least successful secondments are those where the secondee is simply treated as an extra pair of hands or where there is a personality or skills mismatch. Both of these can cause "disharmony and disruption to business as usual", says John McKenzie, managing director of secondment brokers McKenzie & Associates.
To counter this, he advises treating the secondment process in a similar way to recruitment. Having located potential candidates (see box for possible resources), charities should undertake a formal interview process to assess who matches their requirements most closely.
Although there is rarely a large pool of secondees to choose from, "employers will respect you for being clear about what you want", says Jones.
"If they're desperate, charities might be prepared to take on just anyone, but it can end up being more of a drain on resources than a support if they're not right," she adds. "It's also not good to give secondees a bad experience."
Such experiences reflect badly on the charity, and can damage a potentially beneficial, longer-term relationship, particularly with external companies that are willing to offer funding or provide trustees in the future.
But even before getting as far as selecting the right candidate, it is crucial to undertake some advance planning. It's important to establish whether there is a genuine need for a secondee and to clarify the aims of bringing him or her on board.
A short policy document outlining why such an initiative is appropriate can help win backing from both management and staff to ensure that the initiative does not fall foul of internal politics.
The next stage is to work out logistics. This includes drawing up a detailed job description and establishing policies on key issues, such as how long any given secondment should last, return arrangements and who will pay for what.
Although many seconding organisations pay the secondee their full salary and benefits during the course of the scheme, Barclays, for example, requests that charities pay 25 per cent as evidence of their commitment.
"That mental and financial engagement is quite important," says Martin Mosley, consumer and community affairs director at Barclays. "It means that efforts are made to ensure there is a good fit between the individual and the host owner." Equally important is the need to agree objectives and set expectations for all of the parties concerned. Establishing internal line management responsibilities and a main contact at the seconding organisation is crucial to ensure that secondees can stay in touch with their employers.
Pam Whitter, a community partner co-ordinator who was seconded to BITC for a year from the Inland Revenue, says: "There has to be feedback from both sides or the secondee might feel a bit unloved. It's also important to keep communications going with your employer so that people won't be overlooked when they go back."
Jones agrees. But she believes real problems generally only occur when charities don't manage or support their secondees properly, fail to include them in the life of the organisation, or neglect to provide them with a specific brief or an induction to help in the orientation process. "Secondees are not a free resource," she warns. "They need to be planned for, managed and supported."
Regular review meetings should be built in to pre-empt any problems and provide feedback to the seconding organisation for appraisal purposes.
For secondments lasting more than six months, monthly reports and a learning log can be useful.
As Peat of BITC says: "It can take a while to get to grips with the differences in the way organisations work. I was used to very tight schedules, but charities are much more flexible around deadlines. They also speak a different language, which can make you feel like an alien on your own planet."
Despite the potential pitfalls, however, the benefits of secondment for all parties can be considerable. Charities, for example, can gain cost-effective access to the specific expertise of temporary staff that otherwise wouldn't be available to them.
"Secondees bring fresh thinking, new approaches and new ways of doing things," says Jones. "There is also the obvious skills transference."
They also allow not-for-profits to take on specific projects that would otherwise be impossible, and provide them with opportunities to network with organisations that might prove useful in the future.
Seconding organisations, for their part, can benefit from greater flexibility in their HR planning and from having their staff develop new skills and perspectives. A spin-off of this is staff motivation, which can increase retention levels.
Secondment can also be used to show a commitment to community investment and corporate governance goals, which boosts the company's image.
From the secondees' point of view, meanwhile, such initiatives can enhance professional and inter-personal skills. As Whitter says: "I'm doing a job that I feel is worthwhile, and it's given me the confidence to feel that I'm capable of doing another job. I can also give BITC some of my ideas and vice versa, so we all learn and get a fresh approach."
The key to obtaining sustainable benefits is ensuring that HR and management practices are firmly in place. The efforts required can reap considerable dividends. As Jones concludes: "Secondment is a resource in kind to charities, but it can be worth much more than cash in terms of benefits."
HOW TO FIND SECONDMENT PARTNERS
Business in the Community encourages private and public sector organisations to contribute to their communities. www.bitc.org.uk or 0870 600 2482
Employees in the Community Network is a membership body for employer-supported management volunteers and secondment opportunities. www.volunteering.org.uk or 0845 305 6979
Interchange is a government initiative that handles the secondment of civil service staff to other sectors. www.interchange.gov.uk or 020 7276 1585
McKenzie & Associates is a commercial consultancy specialising in secondments. www.secondments.com or 0161 434 9494
Many large commercial companies have secondment programmes as part of their corporate social responsibility strategies, including Standard Life, the John Lewis Partnership and HBOS.Check their websites or contact their HR departments for details.
Your existing stakeholders, such as trustees and supporters, might have useful contacts, so make the most of these networks.