Demand for interim executives surges
Demand for interim executives surges driven by demand from the banks
Businesses beginning to think about growth but demand for marketing interims still very weak
The number of new assignments for interim managers jumped by 24% from Q4 2009 to Q1 2010 driven by surging demand from the banking sector*, says Interim Partners, a leading provider of interim management solutions.
Interim executives are managers or other senior executives, usually just below board-level, who are recruited on a short-term basis.
The number of assignments being undertaken by interims in the banking sector has jumped by 44% over the last quarter.
According to Interim Partners, the big increase in demand for interims from the financial services sector means they now account for 43% of all new requirements for interims from the private sector in Q1 2010, up from just 29% in the previous quarter.
Says Doug Baird, Managing Director of Interim Partners: It is pretty amazing to see that nearly one in two requests for interims in the private sector is now coming from the financial services sector. It has been a really radical turnaround.
The banking crisis led to a huge wave of takeovers and mergers presenting interims with an unprecedented workload. To get two financial institutions properly integrated can take years.
The difference between a well executed and a poorly executed merger of a bank would easily be in the hundreds of millions of pounds in cost savings or increased revenues. Set against that, the cost of hiring teams of interim managers to help get that job done properly is excellent value for money.
Whilst M&A activity has been low these mega mergers in the financial services sector have soaked up a lot of the spare interim managers who have experience in integrating financial services companies.
We expect demand to remain high there are a lot of loose ends like AIG around and I dont think it is too bold to say that pretty much all banks are looking at what card they want to add to their hand and which ones they need to throw away.
Interims working on integration projects in the financial services sector are now earning an average of 800 per day, but their rates can reach 2,000.
Some of the major financial institutions currently being absorbed by another institution as a result of the financial crisis include:
? Lehman Brothers assets bought by Barclays and Nomura
? Merrill Lynch acquired by Bank of America
? Bear Stearns assets acquired by JPMorgan Chase
? HBOS taken over by Lloyds Banking Group in January 2009
? Dresdner Bank incorporated by Commerzbank
? Barclays Global Investors sold to Black Rock
? Alliance & Leicester and the savings business of Bradford & Bingley acquired by Banco Santander
? Cheshire Building Society and Derbyshire Building Society being integrated into Nationwide Building Society
? Britannia Building Society merging with The Co-operative Bank
Doug Baird says that another area of high demand is for interims who can help prepare financial services companies for new regulations introduced in response to the credit crunch, and to new capital adequacy regimes such as Solvency II and Basle III.
Says Doug Baird: There has been a lot of uncertainty about what shape regulatory reform of the financial services sector would take. Now that it is becoming clearer how Solvency II and Basle III will affect the sector, financial institutions are moving forward to the next stage of planning that means more hiring of interims.
Even the best resourced insurance company is not going to have all the internal resources they want to deal with Solvency II.
Recovery outside of banking more mixed
Outside of financial services Interim Partners says that the increased demand for interim executives remains uneven, with some sectors and disciplines seeing weaker demand than others.
Adds Doug Baird: Demand for marketing interims is yet to recover. Very few businesses have got to the point where they feel confident enough to hire a marketing interim and gear up for growth.