European Interims Face Fee Pressure

While Europe’s economic woes have factored into the fee structures and engagement levels of interim executives in recent years, Europe-based interims are concerned about another force putting pressuring on fees: headhunting firms.

Interims from Europe say the market is awash in placement firms looking to match European interim executives with the companies that need them. Of course, there are reputable placement firms that specialize in placing interim executives, but those firms aren’t the problem.

Fakers and Posers Flood the European Interim Market, Fee Pressure Up

European interims are concerned that many of today’s middlemen promise interim executive placement services, but are muddying the definition of interim and harming a specialty that lives by its promise of top-flight decision-making backed by experienced strategy execution under a fixed timeframe.

For the high rungs of interim executives, that watering down is resulting in lower fee structures.

“Fees have fallen about 30 percent,” Belgium-based interim executive Johan Hofman said. He said the interims in his circle are now at a 500/600-Euro-per-day rate.

Interim Means High Quality on a Fixed-Term

Complicating the issue is the fact that headhunters are not only placing non-interims as interims, they’re also tempted to get the payday that comes if those interim positions become standard full-time roles.

Of course, in a supply-heavy labor market, there are plenty of so-called “in-betweeners,” executives putting out an interim shingle but more interested in permanent positions, ready to play both roles.

“With this huge unemployment rate, lots of professionals (are available). They might have been good in their organizations, but most of them overvalue themselves. They think they can jump into interim management,” said Angel Batalla, a Spain-based interim executive and faculty member at Madrid’s well-regarded IE Business School. Companies that have bad experience with executives that promise an interim skill-set but can’t follow through won’t want to try the specialty again, he noted.

Headhunters Holding Rates Firm

Meantime, several interim executives said headhunters are not allowing their margins to decline and transferring that rate pressure to the interim executives. What worked for recruiters during the heady days of interim during the 1990s isn’t feasible today, according to a U.K.-based interim with 20 years in the interim field.

“Middlemen and in-betweeners will crucify us in the marketplace” if nothing is done, the U.K. executive said. “It’s going to completely bugger the interim brand.” It’s time to define interim and the benefits it offers.

Philippe Lavie, an interim exec specializing in sales and marketing improvement, commented “that’s why an international association is so vitally important – someone has to set standards and promote highest quality in a defined membership.”

How do we best define experienced credentials for interim execs? How do European interims avoid headhunters and source engagements without middlemen?