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Fixed-term contracts in decline, but assignment length extends for interim execs
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Monday, 05 August 2024 9:57am
Fixed-term contracts have declined in the interim executive market over the past 12 months, while the average length of placement has increased markedly, according to Watermark Search's latest report on the state of the market.
The proportion of interim executives who worked between six and 11 months in a placement rose from 19% to 23%, while those working for 12 months or more increased from 27% to 32%.
The Watermark Search survey says there are a number of reasons for the longer assignments, including the increase in major business transformation projects, demand for specialised skills, risk mitigation initiatives and longer-duration projects.
The report also shows that the decline in fixed-term contracts coincided with a rise in day rate contracts for interim executives.
More than half the organisations surveyed used day-rate contracts for their interim executives over the past year, the research shows.
"This surge in day rates and drop in fixed-term contracts reflects the preference for flexible arrangements that align with changing business needs," the report says.
There has also been an uptick in daily wage rates in the market.
Organisations are setting goals "to protect the business in the near term, while positioning it for long-term success", Watermark Search International senior partner Caroline McAuliffe tells Shortlist. "This tightrope has never been tauter."
The roles interim executives take on within organisations have also changed, McAuliffe says. Previously, interim executives usually held caretaking duties while the company looked for a permanent replace mentor were brought in for their specialist skills in M&As, IPOs or other projects.
In recent years, however, interim executives have been hired to engage in transformative business initiatives (cited by 34% respondents in the survey); to focus on crisis management (25%); as a fractional leader joining on a part-time basis; or to validate a business case, says McAuliffe.
The report also notes a decline in the number of interim executives seeking interim roles exclusively.
Of the circa 900 interim executives surveyed, just 13% said they were only interested in interim roles (down from 27% in 2023).
Many who previously picked "interim only" are now "open to both" (45%, up from 30% in 2023), McAuliffe says.
But there has been an overall rise in executives registering for interim roles. "We have never seen such a high number of interims wanting to work this way. The registration process has doubled if not more," she says, adding that Watermark has expanded its team and created a community manager role to deal with the influx.
Moving forward, interim executives will be used for a wider range of roles, says McAuliffe, especially in relation to workforce longevity and postponing retirement, or for mentoring roles.
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