August 19, 2022 – Organizations are having to respond to the Great Resignation by looking outside of the traditional channels to source talent. And they’re finding one of the best ways to address skills shortages is to tap into a highly skilled, diverse interim executive talent pool that is readily available and adept at dealing with the ambiguity of our current times, says a new report from Sydney, Australia-based Watermark Search.
“Rather than exiting the workforce completely, many more executives are now considering an interim executive career,” says the search firm’s 12th Annual Interim Executive Survey. “They have many years’ experience and deep subject matter expertise, and they are in the best frame of mind to mentor teams crying out for leadership and direction post-pandemic.”
Australian workers are following similar trends. “Organizations are facing stiff competition for talent caused by multiple factors, including the effects of the Great Resignation, pandemic fatigue, extended leave, lack of solid succession plans, an out-of-date employee value proposition, longer search processes and counteroffers,” says the new study. “Interim executives are filling many of those gaps very effectively. The interim executive cohort is immediately available and ready to embed very quickly to transform organizations effectively.”
The good news for businesses is the interim executive cohort grows the available talent to deliver on their objectives, said David Evans, managing partner of Watermark Search. “Historically, interim roles have often been seen as a crisis management or gap-fill solution,” he said. “Now this model has become mainstream as a part of a much broader hiring mix that acknowledges alternative career choices.”
A Great Reset
Australian businesses are certainly feeling the effect of a great reset in the labor force triggered by the pandemic. “Not surprisingly, after adopting new working practices, workers at all levels want more choice in where and how they work,” said the Watermark Search report.
Back in early 2021, according to the study, nearly two-thirds (65 percent) of workers asked about how the pandemic changed their feelings about work and life agreed with the statement: “The pandemic has made me rethink the place that work should have in my life.” And just over half of respondents (52 percent) agreed the pandemic made them question the purpose of their day-to-day job.
These big questions about work are driving workers to seek out and move on to new and more flexible opportunities noted the authors of PwC’s What Workers Want Report 2021: “While there are large numbers of workers on the move, which would historically signal a healthy economy, our new research study of 1,800 Australian workers found that 38 percent are looking at leaving their current employer in the next 12 months.”
The Great Resignation is expected to soon have Australian workers on the move in much larger numbers than seen in recent times. And this movement isn’t going to slow down, said Chris Howard, Gartner’s chief of research, commenting on the findings of Gartner’s 2021 Hybrid and Return to Work Survey: “The Great Resignation is a pretty accurate description of what’s happening – at least in certain locations and within certain employee groups. But it still describes the symptom, not the cause. More important, it focuses – as do terms like ‘reshuffle’ – on the impact felt by employers.”
A Time of Questioning
“What is happening now is happening to people, to humanity,” said Mr. Howard. “Gartner research confirms that the intent to leave or stay in a job is only one of the things that people are questioning now as part of the larger human story we are living. You could call it the ‘Great Reflection.’”
For many organizations it is unsettling to see so many leaders leave for more flexible work opportunities, said Watermark Search. They might try to manage the knock-on effect through the traditional permanent search process, but this approach is proving slow and difficult in the current job market.
Why Interim HR Leaders Are in Growing Demand
Interim professionals bring niche skillsets, expertise and leadership capabilities required to drive change, says a new report by Lucy Bielby of Frazier Jones. Interim human resource leaders, in particular, have subject matter expertise, general business knowledge and an external perspective that can help organizations achieve a fast turnaround, realize rapid results, and drive a business forward. Because as we all know, it always comes down to people.
“Skilled workers are questioning what is important to them, though we know many of them are interested in interim assignments and we see excellent opportunities to tap into probably the most under-utilized talent pool in history,” said the Watermark report. “As our research shows, organizations can benefit from the Great Resignation or Great Reflection – if they are willing to change their thinking.”
The war for talent is not a new problem for Australia, where talent shortage has always been in an issue in certain areas, but the pandemic exacerbated it. “The growth sectors reflected in our survey – health, government and not-for-profit – need to tap into executives with proven sector experience or be open to fresh ideas by bringing in leaders from other sectors,” said Watermark Search.
A New Cohort of Talent
“Though with a limited pool of people looking for a permanent executive role in Australia, what we are hearing is that organizations need to look beyond
just those executives who only want permanent work and consider executives with the right skills and experience who choose to work differently,” said the report.
“We see the interim executive pool effectively bringing a whole new cohort of talent to the market,” said Watermark Search. “Therefore, organizations not considering this alternative talent pool are missing out on an increasingly large group of highly experienced people.”
Watermark Search said it is seeing the balance of power shift from the organization to the individual. “In the war for talent, organizations can no longer dictate the terms of work like they used to,” said the report. “Increasingly individuals are saying, ‘I have the right skills for the role, and this is how I would prefer to work.’”
Employers have also had to contend with borders shutting during the pandemic, which restricted them from bringing in experienced and skilled leaders from international markets. “Now the borders have re-opened we are experiencing a drain of talent as skilled workers return to their homelands to reunite with family,” said the Watermark report. “We believe this tide can be turned by businesses engaging interim executives.”
Short-term to Permanent
Businesses that want to accelerate transformation should consider tapping into the larger (sometimes not always visible) interim executive talent pool to bring in someone with extensive knowledge and experience for a short period, said the search firm. “While the business may not be able to access or afford this talent in a permanent role, it can solve its pressing needs by over-hiring an interim executive’s experience or ‘superpower’ to lead a specific project or time-critical event,” said the report. “As a short-term arrangement, over-hiring can be mutually beneficial for organizations seeking rapid outcomes and interim executives looking for purposeful work with more flexible terms than those offered in a permanent role.”
While most interim assignments are short-term solutions, there is growing interest among interim executives who complete an interim assignment to be invited to become the permanent executive. “We place an interim executive to fill a gap and they perform very well,” said Watermark Search. “Then if both parties believe they are well-aligned in values and culture, it becomes a very real and desirable option for the interim executive to be offered – and accept – a permanent role.”
Watermark Search said it has seen the number of conversions to permanent
increase by 67 percent in FY22 compared to those in FY21. “We are attributing this increase in interim to permanent conversions to the currently very tight talent market,” said the report.
Organizations will have usually identified succession planning for their most critical roles. In the current environment, however, all best laid plans are being challenged. “With unexpected resignations and aggressive head-hunting, engaging an interim executive is proving to be a very effective short-term solution,” said Watermark Search. “Even if an organization has some internal options, the interim executive option adds an extra layer of security and governance should an organization need to enact Plan B.”
Meeting the Challenge
The search firm told of recently helping several organizations successfully manage emergency succession plans including, as an example, a regionally-based client in the higher education sector: “Our client contacted us during the pandemic lockdown in 2021 to help with an emergency succession plan because the director of human resources had resigned. The organization’s Plan A was to backfill the role with the deputy director of HR while undertaking a permanent search. Unfortunately, due to fatigue and associated illness caused by COVID-19, the deputy director was on sick leave and not available to fill the gap.”
Faced with a huge organizational risk, the client enacted Plan B and contacted Watermark Search for an interim solution. “We found an interim director of HR who was suitably experienced and – importantly – available immediately to engage with the team and hit the ground running,” said Watermark Search. “The interim director had the capacity and bandwidth to cover both roles for the short-term until the deputy could resume their role and the permanent search could be completed.”
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media