With the UK exiting from the European Union, Executive Grapevine charts how it might impact the interim market...
“Brexit is a potential spanner in the works for the interim market,” explains Tony Evans, an experienced interim CEO and member of the Association of Interim Executives. As if interims didn’t have enough to deal with. With IR35 nearing, global economic conditions becoming more difficult and fallouts on the world stage making everything from international relations to the price of commodities more precarious, Brexit, and the lack of clarity around the details of it, is also affecting the manner in which interims work despite the value the interim market believes it adds to businesses and the wider economy.
the interim market will continue to grow in 2020 and embrace the implications of Brexit with positivity and opportunity
So, what is the deal with Brexit?
With the Brexit deal ratified, the UK and the EU have until the end of 2020 to strike a deal. Until this period ends, the UK continues to gain access to the EU’s market and customs union as it hashes out a deal which is expected to come in for November time. If a deal cannot be agreed, then unless a transition period is implemented – anathema to many members of the current Government, and seemingly unlikely – then the UK goes onto World Trade Organisation terms, meaning border checks as well as tariffs on goods. For interims, this could impact their appeal for firms operating out of other countries but could also create opportunities whereby firms need a short-term transformation specialist.
We deliver results and it’s done under the radar. That’s how the profession works.
How does this impact the interim market?
Brexit, since the referendum result, has meant that the interim marketplace, at least regards talent, has become more senior believes Evans – with firms making more difficult demands of interims. He believes this is the result of uncertain business conditions. Stats corroborate this. The Institute of Interim Management’s most recent survey of the market found that the biggest number of projects that interims were being brought in for was at C-suite or Directorial level. A rise in day rates too suggests more senior hires, specialist skills and a condensing of the talent available.
Crucially, Evans doesn’t think Brexit has been particularly bad news for interims, especially with the exit ratified – and at least at the beginning. As soon as the situation is clear he believes there will be a flurry of interim activity as organisations seek to get interim talent for change programmes. “We’ll have a short period where business will understand the general direction is clear… but then we’ll be back into uncertainty,” Evans explains. “As a result of this uncertainty – as organisations start to ask ‘what will the detail look like?’ – organisations don’t make decisions.” This, he believes, is where it will have a negative impact on interims.
Brexit as an opportunity
As Evans alludes to, interim talent will be necessary to the implementation of fast change programmes as businesses seek to adapt to Brexit-induced changes. Anderson Quigley, an interim service provider (ISP), has been helping its clients source interims to help with such activity. John Laycock, Partner & Head of Interim Management at the firm, explained that this is where interims and ISPs add value.
He says: “Anderson Quigley has provided a number of organisations with expert interims to help prepare for this new landscape and to look for the opportunities this may bring. Clearly the bigger picture for interim managers operating in the public sector is the impact of Brexit on the overall UK economy and the resulting ability of the Government to invest in the transformation and growth of public services on the back of a successful and thriving economy and the part that interim managers can play in this.”
In fact, as Laycock sees it there will be clear opportunity provided by Brexit and this could spark growth. “Of course, it remains to be seen what the economic impact of Brexit will be, but the general optimism in the public and not-for-profit interim management community suggests that the interim market will continue to grow in 2020 and embrace the implications of Brexit with positivity and opportunity,” he adds.
And, according to Evans, whilst Brexit has made the headlines it isn’t even the biggest issue that the market should be aware of. He thinks that trade wars between major geopolitical actors, oil prices, zombie companies, interest rates and the difficult nature of profitability in the European banking sector could all throw the interim market in disarray – as well, of course, as everyone else. “These are much bigger issues, in my opinion, than Brexit,” he adds.
there will be a sense of many businesses wishing to keep up the pretence that in spite of Brexit it is business as usual
I would suggest speak to the experts at Oliver Sanderson
Business as usual
It sounds like the politicians could do with taking a leaf out of the interim playbook, especially regards the noise and efficiency with which Brexit has been conducted so far. With circa 10 months left until the transition period ends, not only might they learn from interims, they might be well placed to a hire couple too. The latest stats do suggest that the average interim contract is circa 10 months after all – it could be a coincidence to good not to pass up.
As Marija Simovic, NED at Oliver Sanderson adds, regardless of what happens with Brexit, businesses will have to continue operating and interims have a specific skillset to help with this. “Certainly, there will be a sense of many businesses wishing to keep up the pretence that in spite of Brexit it is business as usual. They will have projects that they will have committed to delivering and in the short term they’ll most likely need interims to assist with this,” she says.