Interim vs Permanent: The ideal balance for your business

In disruptive economic times, Stephen Tarrant, Eton Bridge Partners Interim Management Partner within the CFO & Finance Practice, highlights the benefits of taking a flexible view to workforce planning.

It wasn’t too long ago that interims were viewed a ‘necessary evil’. Now, and for the better, businesses accept them as valuable additions, with professional skillsets to meet specific needs. They are, for want of a better phrase, simply part of the normal temporary-permanent mix we see in organisations today.

With the advent of the “gig economy”, I believe businesses and line managers should develop their thinking once again. We live in times where the life span of a permanent employee can be measured in months rather than years, and certainly in years rather than decades, with most people changing roles once every one to three years. If a role is needed longer than this, the likelihood is that it will eventually be automated. We’re at a point where agility and the ability to adapt is a skillset in itself, and it’s my belief that not only does this fundamentally suit interims, but by implication, businesses should now radically re-think the ‘acceptable’ interim-to-permanent ratio.

It is my view is that at the center of every organisation, there should be a strong core of permanent staff. Individuals who embody the long-term culture of a business, and in return are developed and invested in. Around this core should sit a flexible workforce, hired for their specialist skill set. These well-paid individuals (due to lack of job security, employee benefits and employment rights), who deliver specific short-term project needs, fulfil a temporary skills shortage during a period of change and develop the technology and processes, allow the core to efficiently perform further. Depending on the industry, this ‘core’ is likely to be significantly smaller than the flexible support and technology that sits around it.

Many will no-doubt argue that this raises several issues – for instance, whether organisations ought to be utilising people who parachute in and then out again, rather than building up their own organisational capability. You could argue it impacts Learning & Development (L&D) and internal succession planning if there is a smaller, permanent cohort to train up to inherit roles. You may also question the culture a business really wants to create; if the business is made up of more of interims than permanent employees.

These are conversations we need to have, but I don’t believe that higher numbers of interims is a bad thing. Indeed, the careers and development of permanent staff should be even better with fewer permanent staff – because organisations will have more time and resources to invest in them. There should also be less redundancies, less legacy issues, and fewer businesses struggling to adapt to changing times.

For some, I accept the notion of a small core of permanent employees is a radical departure from the norm – even in today’s world, most businesses are primarily comprised of permanent staff, albeit transient ones, and it’s a reality I believe more organisations should look at. It’s my view that the percentage of interim-to-permanent will rise dramatically in the 2020s and I think the day when a CEO will ask “why do we have so few interims?” is not far off.

So, rather than looking at interims as a temporary necessity, start viewing them as a long-term strategic plan. Look at the type and quality of the work they do, and how they allow permanent employees to thrive.

This would, I think, significantly enhance the value businesses derive from their interim resources.

Stephen Tarrant

Partner
Interim Management
CFO & Finance


Stephen is responsible for interim management appointments across the UK and Europe. His client base is a mixture of Blue Chip and high growth PE backed businesses.