Robust Investment Niche Emerges as Interim Recruiting Gains Traction

May 24, 2024 – For at least a decade, organizations have increasingly recognized the value of integrating highly skilled on-demand talent – independent consultants, executives, project managers, and subject matter experts – into their workforce.

“With some 72 million American workers (43 percent of the American labor force) and countless other professionals worldwide choosing to work independently on a project-by-project basis or in interim leadership engagements, businesses have been slowly shifting their hiring models to accommodate these workers,” said Cody Crook, managing director of Hunt Scanlon Ventures.

Demand for interim financial leadership, in particular, skyrocketed last year, he said. According to the 2024 High End Independent Talent Report by Business Talent Group (BTG), a Heidrick & Struggles company, requests for interim CFOs have jumped by 46 percent. That makes Heidrick’s acquisition of the company three years ago a prescient move.

Accelerating Scale

“BTG pioneered the high-end independent talent marketplace,” said Mr. Crook. “The acquisition established Heidrick & Struggles as a market leader in on-demand executive and project-based talent hiring,” he noted. Mr. Crook said the acquisition was also consistent with Heidrick’s long-term growth initiative to expand its leadership solutions and capabilities to address new and ongoing client imperatives.

“Seismic workplace changes and shifting demographics collided after the pandemic struck in 2020,” said Mr. Crook. “Those dynamics have accelerated discussions around the future of work and underscored the importance of agile leaders and leaner workforces,” he noted.

Related: Answering the Growing Call for Interim Executive Talent

A year after Heidrick’s plunge into the space, Korn Ferry acquired Patina Solutions Group in April 2022, bringing it substantial interim executive solutions expertise across multiple industry verticals spanning functional areas of expertise including finance, operations, legal, human resources, and IT, among others. “The move greatly accelerated the scale and capabilities of Korn Ferry’s then-current interim executive solutions business,” said Mr. Crook.

Interim Leaders: Proven Experts at a Time of Crisis

In times of sudden change or instability, interim leaders can be the preferred solution for an organization, leveraging a range of skills and experiences to keep a company on course. A new report from Witt/Kieffer explores the many benefits of interim leadership for organizations of all sizes in today’s challenging business environment.

Three years after the pandemic began, the widespread impacts that COVID has had on health systems continue to persist, according to the report. “Even today, the effects are still being felt at every level, with continuous pressure placed on staffing and finances for health systems of all sizes,” the study said. This has led to widespread burnout among healthcare professionals, with over half reporting symptoms of anxiety, depression, or post-traumatic stress disorder, according to the U.S. Surgeon General’s office. Similarly, and just as unfortunate, the pandemic has delivered financial stress to health systems, as safety protocols forced mass cancellations of elective procedures and numerous factors caused unsustainable increases in labor costs.

That same month, ZRG Partners acquired RoseRyan, a Silicon Valley-based provider of finance and accounting consulting solutions. The move expanded ZRG’s tailored advisory, interim, and on-demand offerings.

Big Uptick in Activity

As that integration was competed, ZRG acquired The Registry 16 months later, significantly expanding ZRG’s business in the interim space. Hunt Scanlon Ventures served as a strategic advisor to both companies during that transaction.

“We have seen a big uptick in buy-side requests from strategics and investors seeking a toehold in the on-demand and interim solutions recruiting space,” said Mr. Crook.

“The current talent landscape has fundamentally shifted now and we believe that growing tailwinds demographically and otherwise will only make the space more desirable from an investment perspective,” he said.

“On-demand talent is being embraced more and more as a core workforce strategy and that makes it a new and opportunistic investment niche within the human capital management sector to watch,” Mr. Crook noted.

Reprinted from with permission from ExitUp!

Contributed by Scott A. Scanlon, Co-CEO, Cody Crook, Managing Director and Head of Investment Strategy – Hunt Scanlon Ventures