Speed, Low Cost and Quality – you can have all three!
By Keith Butler
The ‘triple constraint’ maxim (also known as the Iron Triangle) highlights the tension between three variables associated with the provision of a service: speed, cost and quality. You can have two of these, the theory goes, but you cannot have all three. If you want speed and low cost, quality will suffer. If you want low cost and high quality, you won’t get it quickly. And if you want speed and good quality then costs will be high. But one exception to this rule is Interim Management.
An Interim Manager can start a new assignment within a week, while senior permanent placements can take up to nine months given typical notice periods. The right Interim can hit the ground running, and their experience and ability to adapt quickly to new environments can ensure a quick return on investment.
Many leaders see real benefits in engaging an Interim to lead a time-bound strategic project, or to fill a gap whilst they recruit a replacement, but they worry the costs will be higher than employing an equivalent permanent manager. However, putting aside the risks associated with delaying a critical project, or leaving a department without leadership, in practice the costs of engaging an Interim compare very favorably.
With recruitment agency fees, National Insurance at 13.8% of salary, pension contributions, company car, health insurance, bonuses and other benefits, a senior manager can cost up to double their base salary in the first year of employment. When an organization engages an Interim they only pay a daily fee for the days worked, and this includes the fee to both the Interim and any margin to the intermediary/agency. That’s it – there are no other costs.
Let us look at an example. An Interim engaged on a 12-month assignment will typically work 220-225 days in the year, allowing for holidays, sickness and other absence. So, comparing an £800 per day Interim with a permanent manager on a salary of £100k, the costs over the year will work out roughly the same. Indeed, the permanent hire might work out as marginally more expensive. Over time of course, it becomes more cost effective to engage a permanent manager, with the received wisdom being that the Interim typically costs 10-15% more over extended periods.
The Interim marketplace is characterised by committed professionals who have chosen the interim path because it suits their skills and personality. Indeed, career interims are typically over qualified for their roles. They are used to achieving targets (both operational and strategic) within tight timescales, will quickly get to the nub of issues, and are not distracted by office politics or organisational noise. Of course, these people are back on the market much more quickly than permanent hires, so their reputation is crucial to their ongoing employability. They therefore tend to be focused on providing the highest quality service underpinned by demonstrable ROI. This is perhaps why many Interims have a kind of ‘no nonsense’ quality to them. (At Wickland Westcott we are currently undertaking research exploring those characteristics that determine the best interim performers – let us know if you would like to participate, or hear more).
In these VUCA (volatile, uncertain, complex, ambiguous) times customer demand is harder to predict than ever, making resource planning a continual headache. The most progressive organisations are actively embracing agile resourcing. The use of Interims, as part of a blended approach to human resource management, offers excellent opportunities for risk mitigation and cost-control. Interims can also play their part in overall organizational development, as they share their insight and fresh perspective with the permanent employee base.