Typical rates of pay and time scales
Daily charge-out rates vary enormously and are greatly influenced by:
Supply and demand dynamics - if it's a popular role with a healthy supply of interims, rates will be lower, whereas if the position is again popular but there aren't many skilled interims the daily rates will be higher. This is why it's always important to keep an eye on the market and keep your skills up to date; this will enable you to spot emerging markets before other interims.
Challenges of the role - the tougher the challenge - the higher the daily rate! This is true in most cases however it does depend on the role and the person, just because the client thinks the role is challenging it doesn't necessarily mean you will.
Level of responsibility - it goes without saying, the more senior the position the higher the daily rate, except where the skill set is rare and in demand. In which case, highly skilled niche roles in valued corporate positions may carry exceedingly high daily rates despite being relatively junior positions.
Track record and experience - the more successful your experience the better, remember clients are looking for CV's with key achievements and not just a list of job responsibilities. If your CV doesn't shine you'll find it harder to get those great positions. Take time, seek advice and feedback and continually work on your CV. Always have an up to date version available, you never can tell when it will come in handy.
Length of assignment - short assignments often pay more, luckily enough short contracts often get extended.
In reality interim assignments can last for any period of time, but more usually it would be between a week and a year. The key thing to remember though is that Interim Management is a career choice, not just something to do whilst searching for a permanent job!
A quick search on Interim Manager sites like Archer Mathieson will help in gauging the typical rates. As a rough guide professional Interim Managers typically earn from £400 to £900. However, there are some rare opportunities for 'top-end' Executive Interim Managers to earn daily rates that top £2,000.
Clients currently trading as Interim Managers have told us that as a general rule,1% of the equivalent annual salary is applied to the daily rate. For example, £100k salary works out to be £1,000 per day. Obviously, this is just a guide and shouldn't be used as a negotiating tool - market forces and supply and demand are the real forces that determine daily rates.
The key to negotiating your daily rate is to focus on the 'value' you can deliver to the company from your services provided, in either cost savings, return on investment, efficiencies produced or risks mitigated. According to the Institute of Interim Management, IM's are suggested not to compare their rates to what a permanent employee might earn because Interim Managers are businesses operating on their own account and are not like employees.
The ‘1%’ rule is not a bad example for Interim Managers to bear in mind, however before even speaking to a client you must be clear that the rate van vary between 0.7% - 1.25%, so be clear on the rate you are prepared to go.
You may also find the following pages helpful:
Becoming an interim manager
Benefits of working as an interim manager
Finding a job as an interim manager
Administrative and practical issues
Ask any accountant and they will tell you the most tax efficient way to work as an Interim Manager, contractor or freelancer is to work through your own limited company. According to a 2010 survey by the Institute of Interim Management, 89% of professional Interims utilise a limited company model for their businesses. Forming a company isn't difficult and only takes about five minutes. You'll need to have professional indemnity insurance and on a more personal level you will also need to:
- Be organised and efficient in all aspects of your company administration.
- Provide a cost-effective alternative to a permanent, highly-paid executive.
- Offer flexibility on location and be able to commit to a weekly commute if necessary for the duration of the assignment.
- Be financially secure and able to cope with non-billing periods.
- Be available at short notice.
Where can I get more advice?
It’s well worth talking to the Institue of Interim Management. The IIM is the professional body for professional Interim Managers. It is a not-for-profit Institute run by professional Interim Managers and Executives. The IIM publishes an IIM publishes an annual survey of Interim Management recruiters (known by Interim Managers as ‘Service Providers’). One such leading Service Provider is Archer Mathieson who come highly recommended by a number of our clients. You may also like to visit the IIM’s LinkedIn group: Interim Management – IIM which is a leading authority on the subject of Interim Management.
What types of roles are available?
Pretty much any role which you could carry out as a full time employee could be handed by an Interim Manager. But as already outlined, Interim Managers are generally hired for middle to senior management type roles, right up to Managing Director or even CEO level, and in any industry sector.
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SJD Accountancy are the UK's largest specialist provider of fixed fee, limited company accountancy services to contractors; we've been acting for contractors across the UK since 1992 and have more than 11,000 clients.
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SJD have also won every relevant industry award possible, including:
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We offer all clients:
Free face-to-face meetings. This is another unique service, only SJD offers free face to face meetings - tax is complicated and sometimes only a meeting will do.
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Outstanding reputation. We have won more awards for customer service and accountancy excellence than any other firm in our market.
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All this for a fixed monthly fee of £110 plus VAT, which is one of the lowest prices in the market. And most importantly, in a recent survey 98% of our clients rated SJD as 'better than other accountants' - we are working hard to convince the other 2%!
If you have any question about contracting or would like any further advice please either contact your SJD Accountant or call our new client services helpdesk on 0500 152500 / 01442 275789 or e-mail rachel@sjdaccountancy.com.
Appoint SJD Accountancy and never worry about your tax or accountancy affairs again!
You may also find the following pages, guides and case studies useful:
Take home pay calculator - How much could you be taking home
Contractor FAQ - All your frequently asked questions and their answers
First time Contracting or Freelancing? - A summary of the alternatives along with pros and cons
Choosing an accountant - For a full review
Step-by-step Guide to Contracting - Download a FREE copy of our guide
Limited or Umbrella? Can't decide? - We help you decide which is best for you
Guide to Contracting - All the best guides to contracting in one place
Expenses Guide - Know exactly what you can claim
Umbrella company guide - Everything you ever wanted to know about umbrella company services
IR35 Guide - A great plain English guide to IR35.
