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B2ER Thought Piece
1. Interim Consulting sees positive signs for 2009
PANIC! RECOVERY…?
REALISATION
GOOD TIMES
HIGH
• Programmes suddenly stop • Programmes restarted
• The world keeps
• Large implementation & transformation
turning…
programmes going full-steam ahead • “Big 5” and interim • Hiring managers realise value of Interims over “Big 5”
consultants kicked out • The work still
• Lots of work for “Big 5” consulting and • Broader economy slowly recovers
NUMBER OF INTERIM CONSULTING ASSIGNMENTS
needs to get
interim consultants alike • Permanent employees laid
• Day rates recover slowly
done…
off
• High day rates
• The work can’t get
• Hiring freezes
done without
• Lots of “Big 5” consultants interim
fired / take voluntary consultants…
redundancy
• Hiring managers
begin resourcing
interims again
• Lower day rates:
lots of supply,
limited demand
LOW
Sep Jan Apr
08 09 09
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Copyright B2E Resourcing, February 2009
2. The Emergence of the Interim Consulting Industry
CREDIT CRUNCH, RECESSION
GREAT DEPRESSION
Y2K “BUG”, DOT COM BURST
INDUSTRIAL REVOLUTION, TAYLORISM
RESTRICTIVE DUTCH LABOUR MARKET FIRST INTERIM LINE MGMT
HIGH
PROFESSIONAL LINE MANAGEMENT [PERMANENT]
NUMBER OF PRACTICIONERS
“BIG 5” CONSULTING [PERMANENT]
INTERIM LINE MANAGEMENT
EARLY MGMT
INTERIM CONSULTING
CONSULTANTS
[MCKINSEY,
BOOZ]
LOW
1900 1930 1970 1980 1985 1990 1995 2000 2005 2010 2015
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Copyright B2E Resourcing, February 2009
3. Increase in number of Interim Assignments
PUSH AWAY FROM “BIG 5”: PULL TOWARDS INTERIM: “BIG 5” INTERIM
• “Big 5” no longer equity • Lucrative: pro-rated, ~twice the • Not interested in providing single • Easy to hire single consultant for
partnerships cash salary resource discrete piece of work
• Massive day-rate mark-up • Flexibility & choice: choose to • Junior consultants “learn on job” • Interim highly qualified and “hit
relative to salary work when, where & on what at client’s expense ground running”
• Poor work / life balance • Short 3-6mth “high impact” • Expensive – up to £1,500 per day • Excellent value – typically ½ or less
assignments for even junior consultant day rate of “Big 5”
• Shift to multi-year transformation
programmes – little variety • Slow bureaucratic process to hire • Quick hiring cycle – typically 5 days
CONSULTANTS LEAVE “BIG 5” COMPANIES HIRE INTERIMS
TO BECOME INTERIMS RATHER THAN “BIG 5”
INCREASE IN NUMBER OF INTERIM CONSULTING ASSIGNMENTS
MARKET FACTORS STRENGTHEN HISTORICAL PRECEDENT SUGGESTS
BUSINESS CASE FOR INTERIMS RECESSIONS CHANGE WORKFORCES
• Early management consultancies [McKinsey, Booz] arose from Great
Depression
• Substantial number of consultants have recently come into the Interim
Market because of the Big 5 downsizing in the recession
• Interim Line Management sprang up because of restrictive labour market
of Holland in 1970s
• Increase in supply of interim consultants relative to decrease in demand
deflates day rates
• Interim Consulting grew rapidly post-2001 as Big 5 shed excess staff hired
for Y2K in .dot com collapse
• Interim consultants not “cheap” but represent excellent value compared
to “Big 5”
• As consultants realise Big 5 always hire & fire in sync with economic boom
& bust, interim consulting will seem increasingly attractive
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Copyright B2E Resourcing, February 2009