November 15, 2023 – Organizations today are facing unprecedented challenges in securing suitable leadership amidst rapidly changing workplace dynamics, an uncertain global economy, swift technological advancements, and ongoing post-pandemic stressors. Recent insights from McKinsey show a profound talent scarcity across all levels, from managers on the front line to leaders in the C-suite. Corroborating this, the U.S. Bureau of Labor Statistics shows a ratio of 1.8 open jobs for every hire. Additionally, a study by the Workforce Institute at UKG, states that about 40 percent of C-level leaders said the stress from their work is so immense they’ll likely quit within the next 12 months.
These changes in the workplace — high turnover, more leaders choosing to work on an interim basis, and a talent shortage — require businesses to take a more adaptive approach to leadership recruiting that may include hiring interim executives, according to Tom Wilson, president at Frederickson Partners, a Gallagher Company. “Interim leadership roles allow experienced executives to balance professional ambition with personal wellbeing and job satisfaction,” he said. “For organizations, hiring interim executives is a strategy that can allow them to navigate transitional periods, crises, business surges, or other changes effectively by leveraging the expertise of temporary leaders.”
The concept, though not new, is regaining prominence as companies hire interim leaders to address immediate challenges. According to SHRM, a short-term or interim executive is a seasoned expert who steps in temporarily to provide stability, leadership, and direction during times of change or uncertainty. “This role isn’t intended as a permanent solution, but a temporary measure to navigate challenges and effectively implement positive transformations,” Mr. Wilson said. “Interim leaders can offer fresh, unbiased insights, helping organizations to realign their strategies and activities swiftly and maintain resilience in a competitive market.”
If executed strategically, according to Harvard Business Review an interim leadership role can be a unique career opportunity, allowing these leaders eventually to move into a permanent role, but with the advantage of having a deep understanding of the organization before making that long-term commitment.
Mr. Wilson explains that interim leaders can contribute to any organization’s success in a number of different scenarios such as:
• Filling a vacancy temporarily until a full-time hire is made, often when there is an unexpected departure of someone in a mission-critical role;
• serving as a leader in a time of transformation for a company or organization where the requirements of the current role are not the same as the eventual permanent role; or
• bridging a leadership gap as the organization prepares for a significant event like a sale or merger where there is no long-term need for the role after a certain date.
An Example of the Interim’s Essential Role
Interim HR consulting is more than a temporary replacement, as a strategic contributor, an interim CHRO or CPO search will deliver an executive who can maintain and advance ongoing projects and initiatives immediately, while also serving the critical role of advisor and coach to the leadership team, according to Mr. Wilson. “His or her interim HR consulting role is especially vital when a business is between permanent HR leaders,” he said. “Interim HR consulting leaders bridge the gap effectively, allowing the company to continue its operations unhindered, preventing potential loss of momentum on key initiatives or organizational knowledge. In times of sudden departures or unexpected absences of key HR personnel, the interim HR leader provides the stability and continuity needed to keep organizational processes running smoothly.”
Tom Wilson is an internationally recognized thought leader in human resources management and retained executive search, with almost three decades of experience. At Frederickson Partners, he leads the executive search practice, and has worked closely with CEOs and boards of leading biotechnology, high-tech, and Fortune 500 companies to determine HR requirements and complete key HR leadership searches, including work with Alphabet, Doximity, Intel, Northwestern Mutual, StockX, Qualtrics, ServiceNow, Quantcast, Asana, Samsung, Heath Equity and CAA.
“The adoption of interim roles is gaining momentum as organizations seek to maintain operational continuity, for example when a role becomes open or the organization hasn’t yet hired or budgeted for a full-time employee,” said Mr. Wilson. “These roles are pivotal in scenarios such as when a company has had recent resignations or when a full-time employee is on leave.”
Drivers for Hiring Interim Executives
Mr. Wilson says that the shift towards interim leadership is not arbitrary, rather it is fueled by a variety of factors including:
• Economic uncertainty and concerns about business vitality (which may encourage organizations to delay a full-time hire).
• The importance of uninterrupted operation.
• The need for time to fill a position efficiency and not leaving a leadership role open too long.
“From our own observations of the market, business drivers for the increased interest in interim executives include the fact that businesses are acknowledging the growing importance of interim hiring strategies and recognizing that leading a thorough process to find the right leader may be time-consuming,” Mr. Wilson said. “To ensure smooth business operations, many are prioritizing interim searches at the same time that they are conducting a search for full-time placements.”
Mr. Wilson also notes that interim leaders can deliver numerous benefits. “They introduce fresh perspectives and enhance organizational efficacy with their clear, external view of operations,” he said. “Their specialized skills offer targeted support, and their fresh energy invigorates teams, playing a vital role in reducing burnout and maintaining workforce engagement and inspiration. Interim leaders often bring a refreshing level of objectivity, having encountered multiple related situations before, without being influenced by existing organizational dynamics.”
Options for Employers Seeking to Hire a Leader
“Navigating the complex landscape of senior leader or C-suite executive search can be challenging, with different possible strategies that depend on an organization’s needs,” Mr. Wilson said. “It’s crucial for organizations to consider their unique situation and select the best approach.”
Below, Frederickson Partners outlines four main strategies that businesses have adopted to address their need for new leadership effectively. These strategies encompass both full-time and interim hiring. The search firm says it’s noteworthy that interims can often be placed into roles much more swiftly than when conducting a full retained search.
Approach #1: Direct Plunge into Hiring a Full-Time Executive in the Role.
The first approach is a conventional pathway, in which organizations opt to hire an executive who will immediately accept a full-time role. “This traditional route remains appealing for its simplicity and decisiveness, enabling organizations to secure leadership swiftly, and fostering stability and continuity,” Mr. Wilson said. “This direct approach necessitates a comprehensive understanding of the role’s requirements, and a meticulous executive search process to ensure that there will be seamless alignment between organizational goals and the selected executive’s competencies and leadership acumen. However, even the quickest executive search will take many weeks, often leaving a key role open in the company.”
Approach #2: Interim Executive Roles with an Eye to Converting to Permanent Positions.
The second approach embodies flexibility and prudence, with organizations leveraging interim roles as a transitional phase with the prospect of conversion to permanent positions. “Once an interim leader is onboard, this methodology allows organizations to assess the compatibility and efficacy of leaders in real-time, offering a balance between immediacy and long-term strategic alignment,” said Mr. Wilson. “It serves as a testing ground to ascertain mutual compatibility and strategic congruence before bringing the interim leader into the permanent role.”
Approach #3: Simultaneous Hunt for Both Interim and Permanent Leaders.
This approach involves a synchronized search for both interim and permanent leaders. “The interim leader, generally with a wide-ranging leadership background, steps in to navigate the organization through transitional times,” said Mr. Wilson. “As this leader steadies the ship, a comprehensive search for a permanent leader unfolds in parallel. Notably, if there’s a mutual interest, the interim leader might transition into the permanent leadership role.” He notes that this strategy ensures:
• Continuity in leadership during transition phases.
• Time for a thorough vetting process for the permanent leader.
Why Search Firms, and Their Clients, are Embracing Interim Talent
Business trend studies come and go, but you can be certain that executive search firm leaders everywhere sat up a bit straighter when they came upon the findings of this spring’s Business Talent Group (BTG) report on “high-end independent talent,” also known as on-demand or interim talent.
• An option to evaluate the interim leader for long-term suitability.
Approach #4: Immediate Onboarding of Consultants While the Permanent Search is on.
This strategy emphasizes onboarding specialized consultants to address particular challenges or projects that the organization faces during its leadership transition. Mr. Wilson explains that these consultants provide targeted insights and solutions based on their expertise, ensuring specific organizational needs are met in the absence of a permanent leader. This approach:
• Offers specific expertise tailored to immediate organizational needs;
• ensures uninterrupted progress on critical projects or challenges; and
• provides an external perspective, often beneficial in strategic decision-making.
“Choosing the right approach necessitates a detailed understanding of a firm’s needs, strategic goals, and the current talent landscape,” Mr. Wilson said. “Organizations need to employ strategic discernment and adaptability in selecting a pathway that aligns with both immediate needs and long-term visions and objectives.”
Avoiding Common Mistakes
In the realm of interim leadership, every decision holds substantial weight, according to Mr. Wilson. “Navigating common pitfalls and misconceptions becomes a journey of its own,” he said. “Understanding the realities of hiring an interim leader can mean the difference between transient success and enduring organizational excellence.”
• Replace the Quest for the “Perfect” Interim Leader with a Practical Perspective – The pursuit of the exact-fit interim leader, although noble, is often impractical, Mr. Wilson explains. “The quest for flawlessness might lead to a paradoxical stagnation, where organizations find themselves entangled in the intricacies of an ideal that may not exist and is unnecessary for an interim leader,” he said. “The organization’s actual needs and dynamics are usually to have someone in the role now. The benefits of bringing someone on quickly (continuity, leadership, focus on work product) often outweigh the risks of bringing in an interim leader that may not be suitable as the long-term solution for the company.”
• Go for the 80 Percent Fit: A Pragmatic Approach to Interim Positions – There’s a growing consensus that an 80 percent match is the pragmatic choice for interim positions. Mr. Wilson says that this proposition holds merit as it accentuates a balance between qualifications and adaptability. An 80 percent fit allows room for growth and adaptability, fostering an environment where leaders can tailor their approaches to meet the evolving needs of the organization.
• Balance Idealism with Realism in Interim Leadership – “Successfully leveraging interim roles isn’t about finding a perfect fit but about adopting an adaptive and realistic approach,” Mr. Wilson said. “Organizational stakeholders need to be discerning and practical, recognizing that the right blend of practicality and vision can lead to hiring effective leadership.”
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Executive Editor; Lily Fauver, Senior Editor – Hunt Scanlon Media