The Economic Value of Hiring An Interim Executive
You need talented executives, ready to hit the ground running – and you need them now. Right now. You have the option of searching for a full time employee, bringing in a consultant, or hiring an interim executive. We will review the economics to consider in making the best decision to make your executive staffing recession proof.
Hiring an Interim Executive saves you expensive opportunity costs
It takes a long time to hire a new executive. While you are trying to ensure you get the best candidate for your company, the job remains open and valuable work is not getting accomplished. Researchers estimate this cost of lost opportunity for a senior executive is over $1,000,000 in the first year alone. Because an interim executive can fill the position immediately, you have the ability to get an important product to market on time, or launch a new sales campaign that drives revenue while you search for a full term executive. Your business needs to fill that gap — and fill it wisely — with an experienced professional executive who can manage complex business challenges from Day 1. This also alleviates a number of challenges when searching for the predecessor. It is easier to find the right executive who can build and grow the needs of a position rather than needing to fix the situation first.
Using an interim executive also provides you access to world-class talent that could otherwise be out-of-reach as a permanent hire — because you can bring that executive in to fill a gap or solve an immediate problem on a short term or part-time basis, as meets your needs.
Hiring an Interim Executive saves you the high cost of risk
What does risk cost? Risk is why we have insurance. But there is no insurance that an executive, no matter how prestigious and well recommended, can do the job well that you need done in the time you have to do it in. The time it takes to realize that the executive you hired (at all the costs outlined above) is not fulfilling the job can be extensive, and the cost of replacing him or her is high. And you face the risk of having a newcomer who is learning on the job, where every incorrect move or wrong decision he or she makes can prove expensive and debilitating to the company as a whole. This is avoided with the “been there, done that” experience of an interim executive who has fulfilled the same role successfully before. And risk is further reduced with an interim executive: if for some reason, you have qualms about the interim executive you brought on board, you can work with Cerius to find a more suitable replacement quickly and easily, at no additional cost to your company. On the other hand, if the executive is such a great fit that you see the value of bringing them inside as a full time employee you have the option to convert from a project based to a permanent employee.
Hiring an Interim Executive gives you maximum flexibility —further providing cost savings
When you hire a full time executive – that’s what you get – full time. With an interim executive, you pay only for the days you use in productive work. Whether your product launch can be accomplished in 4 days a week, or your marketing campaign executed 60 hours over the next 4 weeks. Many interim executives have contracts that are less than the standard 40 hours a week. You can pay for project execution and completion for whatever time it actually takes. Thus, again, the cost for the interim is less than you’d ever pay for the full time, on-staff equivalent.
Using an interim executive can also give you maximum scheduling flexibility. Consider this: you need a VP of Marketing to step in to manage a go–to-market plan. It will take full time for at least a month — but then will taper down. You still want the role filled but perhaps at 3 days a week, Mornings only for 5 days, or every other day for a few weeks thereafter. And perhaps part of that time the interim executive can work in a home office, providing further savings. You are not locked into a typical 5 days a week schedule.
In addition, you have the flexibility to have the right executive for the problem of the moment rather than a permanent, all-purpose executive — you can swap executives in and out as the situation merits without necessitating long-term commitments to specific individuals. It allows for a variable talent management strategy at the executive level based on the changing needs of the company and the marketplace.
Hiring an Interim Executive gives you added assurance to getting it right
Executive turnover is high. Holders of many high level positions leave those positions as frequently as every 3 years, sometimes sooner. And sometimes the partings are not of their choosing. With an average six month salary equivalence in severance for an executive who had been with the firm about three years, the cost for salary alone is $90,000 plus the added cost of carrying benefits and then the cost of executive outplacement. Though most companies do not hire an executive expecting they will be there for the life of the company, there is some expectation they will be there for a reasonable duration. In this market, we often see failed attempts at hiring the right executive for a number of reasons. The executive is there for a short period of time, offers little or no results and often causes more problems than are solved. Starting with an interim executive gives the company time to find the right executive or decide the interim executive is a great fit. Either option, offers less risk and a higher assurance of getting the right fit.
By thinking of interim executives as another strategy to meet your business objectives, you are creating a culture of innovation in your company. A strategic use of interim talent represents thinking that is “outside the box.”