Guide to becoming an Interim Manager

What is an Interim Manager?

Interim Manager's (IM) are highly skilled professionals with management experience who can be brought into an organisation for a limited duration assignment to carry out a specific activity or set of requirements.

Interim Management is still a relatively new industry and, as a business concept, is a fantastic way of injecting much-needed flexibility into the marketplace. The UK operates perhaps the most sophisticated Interim Management services in the world, with executives and managers covering a wide variety of roles at different levels of expertise and within various technical areas. The best Interim Managers are already proving that, if used effectively, they can be worth their weight in gold – and according to the Institute of Directors an Interim Executive with relevant experience and a good track record can be ‘the answer to a company’s prayers’.

Why companies use Interim Managers

When a company employs an IM, that person is contracted to deliver a fixed assignment for a fixed cost and fixed duration. Through this, the company gains the benefit of instant experience, a higher caliber of manager as well as having an ‘implementer’ on hand who will be focused solely on the job at hand. These benefits have lead organisations to increasingly recruit IM's leaving a wide market for first time Interim Managers!

Some specific situations in which a company might need to engage an Interim Manager include:

  • To conduct a change management process, or business restructuring which needs specialist resource and expertise. 
  • To launch a new project when in-house skills are not sufficient.
  • To turn an ailing business around.
  • To set up new businesses or to close down old ones.
  • To handle a business situation which needs evaluation, recommendation and implementation when there is no time to do this using internal staff.
  • To fill a sudden gap in the workforce caused by absence, resignation, dismissal or secondment.
  • To accommodate a sudden increase in workload.
  • To manage acquisitions.
  • To provide mentoring and team development.
  • To carry out crisis management activity.

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.

Finding work as an Interim Manager

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. However, Interim Managers are generally hired for middle to senior management type roles, right up to Managing Director and CEO level in any industry sector.

What experience do I need?

Demonstrate a background of progressive achievement and clear success, especially with budgetary and personnel responsibility (clients love to hire successful people, so make sure your CV is covered in successful achievements).

  • Be recognised as credible and a high performer when measured against your peers -
    show a track record of real and quantifiable achievements.
  • Possess well-developed people management and communication skills.
  • Be capable of contributing a wealth of knowledge and added value from Day One.

A common phrase which is often used in relation to Interim Managers is that they should be ‘suitably over-qualified’, and this is often a good description!

What personal strengths must I have?

It’s not just about experience, it’s also about having a certain working style and personality type. For example, as an Interim Manager you must:

  • Be happy with change or ambiguity, and be comfortable when moving from one organisational culture to another.
  • Focus on your main functional discipline and be clear on what you have to offer to clients by way of your past experience, successes and track record.
  • Have strong interpersonal skills, whether operating independently or as a team member, depending on the requirement.
  • Quickly establish a rapport, building trust, and ‘selling yourself’ confidently.
  • Hit the ground running in any situation.
  • Get results fast, whilst adopting a diplomatic approach.
  • Be perceptive, with the skills to quickly assess what’s going on in a totally new environment.
  • Have the ability to analyse, develop solutions, influence and then deliver on time and within budget.
  • Provide an independent perspective to the management team.

And lastly, you must also possess sufficient energy, drive and tenacity to secure a new assignment on average every six to nine months!

Creating an Interim Manager CV

Aim for no more than three pages unless you’re adding Case Studies.

  • Outline the results you have achieved, giving greater focus and explanation to your achievements in the last three to four years, as Interim Managers are hired for their current knowledge.
  • In particular, highlight any projects which have included Interim Management, project management or change management.
  • Include as many relevant key words as possible, particularly focused on your specialist area and be sure to note any fluency in languages.
  • Make it easy for the reader by being clear on what you have to offer, note dates of employment in chronological order and be prepared to add notes that will help illustrate your experience when pursuing a particular assignment.
  • Create the document in a Word file, use an easy-to-read typeface and don’t use photographs.

Rates of Pay for Interim Managers

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. 

Advantages & Disadvantages of being an interim manager

As with all contractor-type roles, one of the key benefits of working as an Interim Manager is flexibility. You have the ability to choose your assignments, be your own boss and decide when and where you work – and consequently how much holiday you can take. Of course this will depend on your Interim Management skills, marketing ability, your financial situation and the economy, but you get the idea.

In addition, by working in a number of Interim Management roles you will gain a unique and valuable insight into the internal workings of a number of different organisations, dealing with different management styles, different working practices and also potentially different industries and markets. All of which will enrich your knowledge and experience, making you increasingly appealing to future clients whether continuing in Interim Management or back in the world of the permanent employee.

Each assignment also helps to build your network. This is vital for future business and so it’s very important that you maintain and develop all of your business relationships as you continue working as an Interim Manager.

Whatever your industry or sector you work in there are numerous specific advantages to IM.

Financial benefits

On average the IM contractor rate can easily be in excess of twice that of a full time employee (to work out just how much you could be earning, try our take home pay calculator).

  • Interim Managers are paid very high rates due to their skills, experience and the fact that many positions can be relatively short-term (despite the fact many contracts get extended).
  • Contracting through your own limited company is the most tax efficient way possible and isn’t as hard or time consuming as you might think, click here for our guide to contracting through a limited company.
  • If you operate through a limited company you have far better tax planning opportunities which can reduce your overall tax burden and increased your take home pay. Forming your own limited company just takes 5 minutes.
  • You can offset all of your business expenses against your income to further reduce your tax bill.

Flexibility

  • Interim Managers have the ability to be far more independent than permanent employees. Visit SJD's comprehensive careers section for hints and tips on CV's and job hunting.
  • You have the freedom to work when you choose, where you choose and for however long you like.
  • Changing contract can often be far easier than changing jobs.
  • Interim Managers can take as much or as little holiday as they prefer, most permanent employed people don’t get paid for any holiday entitlement unused during the year, as an IM you will.
  • The company you work for is not your employer, but is instead your client, which puts a whole different flavour on the relationship.
  • As an Interim Manager you have more flexibility over the payment terms that you can negotiate.
  • You have the opportunity to develop your career in a way that suits your personal circumstances at any given time.

Skills development

  • Working as an Interim Manager gives you the opportunity to test out other industry sectors to see if you can widen your experience.
  • IM's tend to gain a really good insight into different company cultures, processes, operations and structures.
  • Working in many different companies gives you the ability to build up a wide-ranging CV and to establish an extensive list of reference contacts.
  • A good IM will become known within their own field for their excellent work and you may even find that your services become sought-after, rather than you having to apply for new positions.
  • As an IM you will be exposed to many different styles of working, not only in relation to your peers, but also in relation to your managers and your subordinates.

Other more general advantages:

  • Opportunities aboard become that much easier and you become more attractive to clients if you have a broader skill set and experience. Many roles aboard are contract based.
  • If you don’t like Interim Management you can always become an employee again.
  • Your clients will see you differently, you will be treated differently. There are still pressures but they are different to those of the employed where what your boss thinks of you as a person can often be the driving force for your career rather than your skill. Managers often don’t see IM's as such a threat to their empire.
  • Heck it’s just more interesting and exciting and again if you don’t like it what have you lost?

And now some downsides . . .

As you've seen, there's a fairly impressive list of positives, but it’s only fair to point out a few of the negatives as well. Some of these include:

  • Interim Managers are responsible for finding their own work and making sure that the money keeps coming in.
  • IM's are responsible for managing their own finances - for example things like tax, VAT and national insurance contributions - which may initially seem like a daunting prospect, however any good accountant or tax specialist will be able to help reduce your stress levels.
  • Even in a buoyant market, there is always a level of uncertainty about where the next contract is coming from. This is no different to being an employee and worrying about redundancy (however the extra redundancy payment as an employee can be very handy).
  • At some point you will have to decide whether to set up a limited company or trade through an umbrella company, and this can be confusing. To find out more about the pros and cons of each click here - limited or umbrella company. Whichever route you choose, there will be paperwork to do and forms to fill in. This can be daunting until you know what you are doing, typically it actually only takes about 15 – 20 minutes per month administration to run your own limited company.
  • IM's don't get the same benefits and ‘perks’ that permanent employees receive. There is no sick pay and no holiday pay, so it’s vital you manage your finances to cover for these times.
  • Not having traditional ‘colleagues’ can be lonely if you are not used to this environment. There are a lot of things you will have to deal with alone, which is why it is important to build up a good support network of experts around you who can help you to manage all aspects of your business effectively. 

Where can I get more advice?

It’s well worth talking to the Institute of Interim Management. The IIM is the professional body for Interim Managers. It is a not-for-profit Institute run by Interim Managers and Executives. The 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.

Accountancy services for Interim Managers from SJD Accountancy

If you are already an Interim Manager operating through your own limited company, or if you are thinking of setting up as an Interim Manager or even working through an umbrella company and want to go limited, then SJD Accountancy can give you a wealth of information and advice. We provide a low cost fixed-fee accountancy service which has been developed specifically for Interim Managers, freelancers and contractors. We've been acting for clients across the UK since 1992 and have more than 14,000 already.

If you have any question about contracting or would like any further advice please call our New business team on 01442 275789 or email: newbusiness@sjdaccountancy.com.