News for Clients / Press Releases
Tight profit margins and skills shortage are biggest challenges for UK Manufacturers say Interim Managers -
19 March 2008
A major skills shortage, tight profit margins and the threat of low cost offshore manufacturing are the top three challenges for the UK Manufacturing sector this year according to a survey of 400 Interims Managers specialising in manufacturing, commissioned by Interim Management provider, Russam GMS.
86% of Interim Managers claimed there was an industry-wide skills shortage and over half believed that the greatest skills gap was in general management. One in five also thought that employees with change management skills were needed, and 18% felt there was a lack of good project management skills in the industry.
When asked what issues are worrying managers working in manufacturing the most at present – 35% stated that it was tightening profit margins; whilst 34% said that low cost off-shore manufacturing was the most significant threat. Increased EU regulations, a lack of skilled employees, rising interest rates and reliance on export markets were also causes for concern.
Interim Managers are however pretty optimistic about the future of UK manufacturing, a third of Interims are more optimistic about the industry’s prospects in 2008 than 2007, 45% feel as positive as they did last year, whilst just 22% believe that the outlook looks worse this year.
Interestingly, this positivity could be attributed to the fact that 75% of Interims worked on projects in 2007 that helped business start ups or existing businesses grow and develop. This is a far higher percentage than Interims who worked on downsizing projects (36%) or in off shore or outsourcing projects (33%).
In terms of industry sectors, 51% of respondents felt the aerospace was particularly buoyant; 49% predicted that the pharmaceutical industry would experience strong growth; whilst 40% of Interims stated that both the food industry and the chemical industry were set for excellent growth in 2008.
John Wilson, Head of Manufacturing practice at Russam GMS comments, “Whilst there are clearly challenging times ahead for UK manufacturers in terms of dealing with tough competition from overseas manufacturers and tight profit margins, Interim Managers are highly confident about the outlook for the sector and the fact that two thirds of their projects last year focused on business growth speaks volumes.”
“One cause for concern however, is the significant skills shortage which appears to be particularly pronounced at managerial level. Whist this is good news for Interim Managers in terms of generating good employment prospects, it is an issue that needs addressing now if UK manufacturing companies want to retain their competitive edge in the future,” he added.
Strong demand for Interim Managers in UK Financial Services Sector despite market downturn reports -
10 March 2008
18% rise in Interim Job Assignments this quarter
3% rise in daily rates for Interims
The market for Interim Managers in the UK financial services sector remains healthy, with an 18% rise in the number of financial services assignments recorded by Interim Provider, Russam GMS since January 2008. This is in spite of reports from KPMG and the Recruitment & Employment Confederation (REC) of a recruitment slowdown and planned redundancies in the City.
Interims Managers are perhaps being hired by companies who are reluctant to recruit in the current market climate. According to a survey of 400 recruitment companies by Recruitment & Employment Confederation (REC) and KPMG in February, temporary and contract billings rose at the fastest pace for three months and employers are hiring fewer permanent staff for the first time since May 2003. The latest quarterly ‘Labour Market Outlook’ report from KPMG and the Chartered Institute of Personnel Development reported that almost two in five companies (38%) intend to make some employees redundant this quarter – a 17% increase on the autumn 2007 report.
According to the latest snapshot market survey of 8000 Interim Managers from Russam GMS conducted in December 2007, daily rates for Interim Managers in the financial services sector rose to £642 per day, a 3% increase on the same period the previous year. The sector is also paying above the average rate for Interim Managers, reported at £580 a day.
The growing market for Interims is linked to the fact that many city firms rely on Interim Managers in uncertain market conditions, as their costs can be managed and there are the not additional costs normally associated with recruiting permanent employees.
Dave Butler, head of financial services for Russam GMS comments, “There is no sign of a slow down in Interim Management market. In fact, we are experiencing the opposite, with an 18% rise in the number of assignments since the start of the year. Interims are an attractive proposition for businesses as they do not incur the overheads of permanent staff or hefty fees typically associated with Management Consultants. They slot easily into organisations, take on senior assignments at very short notice and deliver from day one, which is the key to success in the financial services market where the one constant is change.”
“We have also noted that more of our Interims are being hired for specific projects to drive change, carry out major business turnaround projects or to manage pre or post acquisition processes. In such “bull” and “bear” market conditions these senior Interims and in particular, the turnaround professionals, have become very popular. Whilst the market outlook may be looking shaky for the permanent recruitment market in 2008, we see no such signs in the interim management industry,” he concluded.
Interim management eases slightly at the end of 2007 from all time - 31 January 2008
- Interim daily rates rise by 4.5% compared with 2006-
- Activity levels increased 1.3% in 2007 -
The Russam GMS Interim Management Monitor - a survey of 7500 Interim Managers polled in December 2007 revealed that demand for Interim Managers in the UK increased compared to 2006, with the number of assignments and daily pay rates at all time high. However, it also showed that demand for Interims eased slightly in December perhaps indicating the beginnings of a market slowdown.
The average daily Interim rates increased by 4.5% to £580, compared with the same period in 2006, however, this figure is down 0.9% compared with June 2007. There was also an increase in Interim activity which was up 1.3% compared with the same period in 2006, with 52% of Interim Managers currently working on assignments.
Charles Russam, Chairman of Russam GMS comments, “In 2007, the levels of Interim activity increased once again with record daily rates being paid in many industry sectors. We noted increased demand for Interims from the NHS, FMCG companies and central and local government where we believe that Interims are now being used more frequently in place of management consultants.”
But he warns that this growth might not continue in 2008, “There was a slight slowdown in December, which could be a result of market uncertainty but, we won’t really be able to tell if this signifies any major changes in the market until March. January is a disrupted month with many decision-makers away until the second week and historically February is a comparatively quiet time so any suspicion of reduced trading levels before March might be explained. However, March is usually a very busy month in the Interim Management Sector and we would expect to see a serious uplift in activity- if this does not happen, we will know the market has changed,” he added
Interim Managers specialising in IT were commanding the highest daily rates in December 2007– an average of £622; closely followed by general managers on £610 and sales and marketing executives who earned on average £595 a day.
The sectors that paid the highest daily rates were the NHS, FMCG companies, Utilities and Professional services companies and in terms of location, Interims willing to work overseas were paid the highest rates, closely followed by Interims in working of the South of the UK.
Talented Interim Managers are increasingly hard to find, which is why organisations are relying more heavily on Interim Providers to source them. 57% of all full-time Interims were resourced through providers in December 2007 with part-time Interims finding, in greater measure, their own assignments. Central and local government relied on them the most, with 75% of all central government Interim roles being recruited by providers.
Interim Managers are getting younger too. Whereas previously Interims in their 50s secured the most work; 56% of Interims in their late twenties and thirties were on assignment in December; 55% of Interims in their 40s; 54% in their 50s and 44% of Interims in their 60s.
Many Interims clearly relish their career with 34% of respondents stating they would never go back to a permanent job and 44% saying that they would take a permanent job only if the offer were tempting enough. We think that this points to committed senior managers with a commercial approach to their work and to their clients. Just 4% of respondents hoped that their assignment turns into a permanent job.
