It’s fair to say that working as an interim manager is not for the faint hearted. Versus the relative security and consistency of your permanent colleagues, the one constant with interim management is change.
In the 20 plus years I’ve worked in the industry, I’ve seen it all: the good, the bad, the highs and the lows. Having weathered the Covid storm, we were all hoping and wishing for a bit of stability and security.
So, as we head deeper towards the cost-of-living crisis, I’ve been thinking about previous hard times – namely the 2008 recession – how our community of interim managers fared and adapted, and the lessons learned.
…You’ll be pleased to know, it’s not all doom and gloom.
So, what happened to interims in the last recession?
Interim managers are more robust to uncertainty than most, but even the most resilient within our community were left feeling nervous as the economy began to collapse in 2008.
I have to be honest though; following the initial tremors and concerns, it was a bit of a damp squib.
Was there growth? No. But our overall picture of the interim market remained relatively stable.
Each sector faired differently.
As you would expect, financial services was hit the hardest. But other sectors remained stable. With this, we saw many interims move from private to public sector roles pivoting their offering.
There was also some downward pressure on day rates as budgets were squeezed. But as the market became more competitive, we were receiving feedback from clients that the need for interims’ expertise had never been more important. It was a real opportunity for interims to show their value.
And, what will happen this time?
In the short term, the signs for the economy look ominous.
Rising inflation, rocketing energy prices, and a cost-of-living crisis indicate an impending recession. With underlying factors such as the conflict in Ukraine adding to the uncertainty, it is difficult to predict how a recession will unfold and for how long.
However, experience has taught us that the interim management sector generally follows broader employment number trends, so I was inclined to look at employment figures from the 2008 recession.
The ONS labour market review reported pre-2008 recession employment rates of just under 73%. Today, the UK employment rate currently stands at 75.4%, according to the ONS labour market review to September 2022.
With vacancy numbers also at record highs for the majority of 2022, such positive results could indicate that a recession may not be as impactful on the IM sector as we might fear.
Add to this Government’s decision to repeal IR35 reforms from April 2023, which we believe could increase market opportunity.
And all of this is against the backdrop of an ongoing talent and skills shortage. The need for experienced and agile interim support is unlikely to diminish. And while a recession might signal an initial slowdown in investment, many businesses undergo change, restructuring, or transformation projects during or after recessionary periods.
So, it is not necessarily all bad news for the interim manager.
What can interim managers do to help themselves during a recession?
Our experiences of previous recessions have shown that the market will most likely become more competitive. There is a good possibility that day rates will come under pressure and that the nature of assignments will change depending on the length and severity of the recession.
As is often the case with interim work, flexibility will be key. Moving with market demands, short-term availability, and the ability to respond quickly will help you navigate more challenging conditions.
A recession is likely to divert companies away from growth and towards orientation, meaning roles will focus more on change, restructuring, or transformation. It’s essential, therefore, to consider how you market yourself in such conditions. Tailoring your CV and including case studies will help to clarify your USPs, highlight achievements, and show the value of what you have to offer.
Update and extend your network to ensure you give yourself as much exposure to opportunities in the marketplace. Interim service providers such as New Street Consulting Group can prove pivotal in more challenging and competitive times.
During periods of recession, opportunities tend to be more of a business-critical nature rather than “nice to have” projects. It’s important then to have specialist areas of expertise that are clearly defined on your CV and other profiles such as LinkedIn. These will help you to differentiate from your competitors.
And finally, be prudent and manage your finances accordingly. With no guarantee of continued assignments and income, allowing for downtime between roles is good practice. Add in some extra buffers where you can to ensure that a recession or cost-of-living crisis has a minimal impact.