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As a specialist recruitment company dedicated to placing Senior
Finance and Transformation interims into critical roles across the UK, we
understand the importance of staying ahead of market trends and regulatory
changes.
The 2024 IIM Interim
Management Survey provides valuable insights into the current landscape,
offering a comprehensive view of the economic impacts, IR35 implications,
salary trends, and emerging opportunities within the interim market.
Here’s a summary of the key findings from the IIM Survey,
along with our recommendations for senior Interims…
Economic Impacts on the Interim Market
The economic landscape for interims has been challenging yet
dynamic. The IIM survey results indicate a significant reduction in the number
of assignments, with those billing fewer days increasing substantially from 18%
to 32%. This shift
suggests a slowdown in demand, which can be attributed to the broader economic
context marked by cautious corporate spending and ongoing market uncertainties.
Inflation rates have seen a reduction, with CPI falling and
the Bank of England striving to maintain its 2% target. However, the economic policies of the newly
elected Labour government remain uncertain, particularly regarding potential
adjustments to off-payroll regulations. As interims, understanding these
macroeconomic factors is crucial for strategic planning and positioning in the
market.
From our perspective, the economic impacts have been
multifaceted. While Q1 showed a buoyant market with significant year-on-year
growth driven by falling inflation and high business confidence, the momentum
slowed in Q2. Despite positive lead indicators, the senior interim labour
market did not fully capitalise on these trends. The snap election further
dampened market activity. However, in recent weeks, we have observed renewed
confidence and a promising uptick in assignment numbers, which we expect to continue
throughout the summer.
IR35: Continuing Complexity
IR35 remains a critical concern for interims, with its
implications affecting both assignment opportunities and remuneration. The
survey highlights that interims working outside IR35 continue to command higher
day rates compared to those inside IR35.
Specifically, day rates for interims outside IR35 averaged
£907, whereas those inside IR35 averaged £809.
This differential underscores the ongoing need for interims to navigate the
complexities of IR35 compliance carefully.
The most concerning finding, however, is that 60% of
interims did not receive a Status Determination Statement (SDS). This points to
a significant lack of understanding among clients about IR35 regulations and
how to navigate them. Additionally, poor advice from some intermediaries
exacerbates the situation.
We are observing that inside IR35 assignments are now
demanding higher rates due to the increased operational costs associated with
these assignments, with interims bearing the burden of both employee and
employer National Insurance contributions.
We await to hear the new government’s view on IR35, as so
far, they have remained fairly passive on the subject of ‘Off Payroll’
Regulations or similar, so it is difficult to know what if any changes may
occur in this area.
Salary Trends & Gender Disparities
On the remuneration front, there has been a positive trend
in average day rates, which increased to £873, up by 8% from the previous year. This recovery is a welcome
development after the minor dip experienced in 2023. Notably, the gender pay
gap has narrowed, with males earning an average of £902 per
day and females £783 per day, reflecting a 15%
difference compared to the 21% gap in 2023.
The private sector continues to offer the highest
remuneration, with day rates averaging £959 compared to £706 in the public
sector. This highlights the lucrative opportunities available for interims in
private enterprises, particularly in industries like manufacturing,
engineering, and technology, which have seen notable growth.
So far this year we have observed a significant increase in
interim pay, especially within our Accountancy and Finance practice. This
aligns with the survey's findings across the Tech, Manufacturing, and
Engineering sectors. We also noted a surge in rates within Private Equity at
the beginning of the year before they stabilised. Additionally, we produced
our annual Accountancy & Finance salary guide which includes day rates for
specific Interim roles, you can download this here.
Opportunities & Recommendations
Despite the challenges, there are promising opportunities
for interims, particularly those with expertise in the high-demand areas.
For interim CFOs and their teams, especially those working
with Private Equity firms and portfolio companies, the landscape remains ripe
with potential. The financial rigor and transformation skills these roles
require are in high demand, aligning well with the sectors the IIM say are
experiencing growth. Here are our recommendations for Senior Interims:
1. Stay
Informed on Regulatory Changes: Keep abreast of any developments in IR35
and other regulatory changes that could impact your contractual arrangements
and remuneration.
2. Make
sure you get a Status Determination Statement (SDS): When operating as an
Interim, it is a legal requirement for the end client to issue an SDS. Always insist
upon receiving an SDS when working on assignments, particularly if working
outside IR35. You may leave yourself exposed to future tax issues with HMRC
without one.
3. Enhance
Your Direct Sourcing Capabilities: Focus on building a strong personal
brand and expanding your professional network to increase direct assignment
opportunities. Please reach out to us to get your copy of our guide to
using LinkedIn to promote your professional brand.
4. Adapt
to Economic Trends: Be prepared for fluctuations in demand and day rates by
diversifying your skillset and exploring opportunities in growing sectors like
technology and manufacturing.
5. Address
Gender Disparities: For female interims, it is essential to negotiate
assertively and leverage the narrowing gender pay gap to achieve equitable
compensation.
6. Leverage
Specialist Recruitment Support: Utilise the expertise of specialist
recruitment firms, such as Stanton House, to proactively identify opportunities
and effectively represent your skills. We are proud to be an Affiliate
Member of the IIM and ranked this year as a Platinum
Service Provider – moving from 10th position last year to number
6 in the rankings!
7. Maintain
Regular Contact with Your Interim Provider: There is a strong correlation
between staying connected with your interim provider and securing your next
assignment. Keep in touch with the provider who placed you to increase your
chances of finding subsequent opportunities.
In conclusion, while the interim market faces economic
headwinds and regulatory complexities, there are significant opportunities for
those who can navigate these challenges strategically. By staying informed,
enhancing direct sourcing capabilities, and aligning with growth sectors,
senior interims can continue to thrive and command competitive day rates in
this dynamic landscape.