A Complete Guide to Interim Management

Interims have proven, practical experience leading businesses through change or tough times. Most have at least twenty years in leadership roles. They also show the skills and behaviours needed to deliver and speed up change.

Companies hire interims to complete agreed tasks, called the interim assignment. Each assignment aims to speed up change. Interims can also fill important parts of a permanent role when needed, making leadership transitions smoother.

We use the term ‘interims,’ which also means interim executive or interim manager. What interims achieve matters more than their job title.

We refer to interims although this term is interchangeable with interim executive and interim manager. What interims deliver is much more important than a job title.

Businesses hire interims to speed up change and bring in extra leadership and experience. They help with growth, efficiency, and better processes. Interims also add leadership capacity when markets change or competition increases unexpectedly.

Consider the following questions when deciding whether to hire an interim:

• Do you have in-house change management experience? Interims are experts in managing change and are used to joining businesses quickly when they are needed.
• Do you have enough management bandwidth? An interim overseeing change frees up management time so day-to-day operations run smoothly.
• Do you have the luxury of time? We can’t spend time twice. Hiring an interim gains leadership teams time – sometimes just to breathe and think. Most interims have more than twenty years of experience at the change management coalface. They know how to accelerate into an assignment and take the workload off leadership teams.
• Is your change project urgent? Change waits for no one, and you will need extra help, at least for a short period. An interim can start an assignment at short notice and will know how to make a rapid impact.
• Is there a gap in your leadership team? If an executive has left the company suddenly, interims offer the competencies and experience to step in quickly. If you need time to find a permanent replacement, an interim will provide immediate leadership cover. Experienced interims take the pressure off, deliver what matters now, help you re-hire, and ensure a smooth handover.
• Do you need external objectivity? Interim executives provide independent experience and insight. Interims will not try to sell extra services, but they will advise on the best way forward from their experience. They bring change management expertise, plus practicality and objectivity.
• Do you really want to outsource your change programme to a consulting firm? Hiring an interim allows businesses to keep control of change programmes and their implementation. The added benefit of interims is that they share their relevant experience, leaving capability in place. An interim helps avoid handing control and management of change programmes to outside organisations. If you do use a consulting firm interims are usually skilled at managing and overseeing them.
• Do you need implementation expertise? Experienced interims know how to take a plan, sense-check it for your business, and then make it happen. They can do this because they have the practical experience of quickly understanding what will work for each business. Interims don’t have a ‘one-size-fits-all’ approach – project delivery is entirely focused on what is best each time.

Hiring an interim brings strong benefits when you need quick expertise. It is a good choice for businesses facing change, transition, or uncertainty. Here’s why:

• Interims have years of hands-on business experience. They know how to interpret and implement what is best for your business.
• Interims save your management time. They have delivered many successful projects and work independently.
• Interims always pass on their experience. They are motivated by leaving capability in place, giving others the benefit of their experience.
• Interims focus on getting things done. They are highly efficient. Give them a change project, and they will deliver results!
• Interims bring experience quickly. You can hire them fast to manage change or smooth leadership transitions. Interims give organisations a boost.

Organisations usually hire interims for at least six months to complete specific tasks. There is no fixed limit, but it helps to agree on a schedule and time frame. This keeps the assignment on track. Experienced interims use this time to deliver results and ensure a smooth handover. Interim assignments last about nine months on average and are often extended, showing the value interims add.

Engaging with people is critical when delivering change. Interim executives know the importance of emotional intelligence (EI) – the ability to empathise and communicate with people. This is a core competency of successful change leaders in difficult circumstances. The most successful interim executives score highly in EI and related skills such as influencing.

In our groundbreaking paper Effective Interim Leadership and Management (2019), we identified that interims needed very strong people skills to be successful change leaders. We interviewed some of the UK’s most effective interim executives, and the competencies found in abundance enabled interims to engage with people: communication, EI, sensitivity, and patience.

Know clearly what the interim executive must deliver before you hire them. It’s also important to have a clear idea of the timeframe. We suggest dividing the assignment brief into outcomes. This will specify the type of experience and person you need to bring in on an interim basis.

The assignment brief becomes your schedule of work, which you should agree with the interim you select. It also forms the basis of interviews with potential interims. During the interview, discuss the assignment brief with the interim. They should tell you ‘how’ they would deliver it. This is the key reason you hire a good quality interim executive.

Tell your colleagues you are hiring an interim, and make sure everyone understands why you are bringing them in. It’s also important to agree the start and end points of an assignment and certainly review the interim’s progress against the schedule each month.

Once you have a clear idea of the change you need to deal with, you’ll need to hire an interim executive. Even if you haven’t quite finalised what you need, interims are experienced in refining assignments and work schedules.

Here are our key tips on hiring an interim:

• Use your network. You may know someone you rate and trust to help you deliver change.
• Talk to a specialist interim management firm. Personal networks often generate only one or two viable, available candidates. Specialist interim firms focus entirely on benchmarking and placing interim executives. The real value is that they provide comparable candidates so that you can make an informed choice. They should also know their network well enough to respond quickly with a shortlist. Interim firms are experts at understanding the assignment brief and quickly translating it into relevant shortlists. The second big reason for working with interim firms is time – if it’s urgent, they should be able to find interims they know within the day. Talking to a good specialist interim firm saves you vast amounts of time.
• Be open about what you need. Bring interim executives and interim management firms into your confidence. Don’t hide anything when you brief them. Don’t waste your time and money by making interims look under every rock to see what is really going on.
• Agree a schedule of work. Be clear about what you are hiring the interim for. Clarity of purpose is key to a successful interim assignment. A schedule or assignment brief summarises what you are hiring the interim to do. It clearly defines what you expect the interim to deliver and how long that may take. This clarity ensures you and the interim start the assignment with the same expectations. It also helps you measure progress and performance. The last thing you want when dealing with change is drift and unnecessary cost.

You don’t need to be too rigid, but you should agree on the desired outcomes. Experienced interims will know how to interpret your brief and help you fill in any gaps. Make sure the interim is aware of any cultural sensitivities in your business that matter. Once the assignment starts, have a monthly review. Ask the interim to outline major findings, decisions, and outcomes. A brief review is also an opportunity to confirm the planned actions for the forthcoming month. Once you have a schedule of work with agreed terms and timescales with the interim, you are ready to start.

Introduce interims to your colleagues, explain why they are there, and how long you expect them to work with you. This will get the interim off to a flying start and prevent concerns from colleagues about ‘taking over my job.’ Be clear with people that the interim is there to support the business and enable and accelerate change. The interim will help you do this, as most are good at building rapid rapport and engaging with people. Above all, build a positive, results-led business relationship.

A structured approach means effective interim assignments. If you set out the assignment clearly from start to finish, you will have a better chance of keeping it on track. You can also measure how effective the interim has been. Diprose, Woods et al. (2019) noted in their globally published paper that using the Interim Assignment Cycle helps avoid open-ended assignments and significantly improves the chances of meeting the assignment objectives.

The Cycle identifies four clear stages: preparation, entry, delivery, and exit.

• Preparation stage. the hirer and interim executive discuss the assignment. Specialist interim firms can also help you define a clear brief. This is the moment to establish the terms of reference and scope of the assignment. Introduce the interim to key stakeholders and give them a good understanding of your business and its culture. The preparation stage usually involves one or two meetings to discuss what you want the interim to do and hear their ideas on how to approach the assignment. At this stage, establish rapport and decide whether you can collaborate. Interim management firms can speed up candidate selection by presenting shortlists of candidates with the right experience. You can then devote interviews to choosing who you want to work with. Produce a work schedule, agree it, and sign it off with the interim. The schedule confirms what the interim will deliver and over what timescale.
• Entry stage. In the first days of the assignment, the interim executive starts the key tasks and, albeit temporarily, joins the business. They engage with key stakeholders and establish their credibility early on. Review the assignment with the interim after a couple of weeks to see if it needs modifying.
• Delivery stage. The interim focuses on delivering and completing the assignment objectives.
• Exit Stage. The interim ensures they transfer their knowledge and skills to stakeholders and other permanent employees before departure. All professional interims manage their departure and handover well and to the agreed timetable. This ensures the durability and sustainability of their work. A strong exit stage protects the interim’s legacy and the assignment’s long-term impact.

Interim executives charge a daily rate and invoice through a limited company. Alternatively, they may charge a fixed price for an assignment. Interims work full, long days focused on delivery rather than hours worked. You get a lot of value from that day rate.

Interims charge day rates ranging from £700 to £2500 or more. If an interim management firm introduces an interim, it also bills an introduction or hire fee each month reflecting days worked by the executive. Day rates charged depend upon the level and type of expertise required.

Clients hire interims for a minimum term of six months, which gives enough time for initiatives to take effect. Assignments can be longer and can be extended, depending on what needs to be done.

The cost of hiring should reflect the benefits of bringing in extra experience quickly to accelerate change, as well as the risks of doing nothing. Few professional services can match the benefits of hiring an interim when you need operational experience quickly.

Interims know how to engage quickly. They offer the experience and skills needed to do the job required from day one. If an interim is covering a line role such as finance director, they will therefore have much more experience than an equivalent permanent employee.

Companies hire interims to accelerate and deliver change. This can be a change programme or a leadership change. Interims deploy expertise, knowledge, and competencies that aren’t always immediately available in a business. The level of expertise interims offer is usually not needed long term. Interims are hired because they know ‘how’ to deliver change and have the competencies to be effective from day one.

Interim executives can adapt quickly to different clients and assignments every eight or nine months – the UK average. This versatility makes interims a rare breed. We estimate that as few as 3,000 senior-level professional interims are operating from the UK. These are experienced change leaders who have completed at least three successful interim assignments. The UK is also a significant ‘exporter’ of interim management services, with interims working for overseas clients. There are many more freelancers in the UK, although few have the competencies and experience to be able to lead and deliver change in many different organisations.

Everything depends on sourcing the right interim for the situation. As with any professional service, triangulate recommendations, references, interviews, and network checks. You can also mitigate considerable risk by bringing in a specialist interim management firm.

Specialist interim firms like Holdsway spend years meeting, interviewing, benchmarking, and placing interim executives. Because these firms do the interim assessment legwork upfront, they can quickly present a shortlist of comparable candidates. This helps mitigate the risks of hiring the wrong candidate.

You can significantly reduce the risk of failure with a clearly defined assignment brief. Also, be as open as you can be with the interim about the situation you face. A well-chosen, accurately matched interim will have the experience and competencies to deliver a successful assignment every time.

We always advise keeping lines of communication open. Review progress monthly against the work schedule and flag any concerns early. Sometimes an assignment’s focus needs to shift along the way. Experienced interims know how to rechart course when needed.

Yes unless circumstances drastically change. Their reputation depends on a succession of good, enduring results. Each interim assignment becomes a reference for the next. Most interims who have delivered several successful assignments have chosen this as a career path. They view it as a profession and a business. Their name and reputation generate work, so they are fully committed to completing assignments successfully. The risk of hiring someone who is actually looking for permanent work is their flight once they are offered a job.

An interim will always focus on delivering value, knowledge, and a real legacy. They want to move on, leaving the business in a far stronger position than before. Interim CVs are full of proof of delivery – ask them to talk you through them.

The Interim Assignment Cycle (Diprose, Woods et al. 2019) published globally underlines the importance of structuring interim assignments for success. Like any good narrative, there should be a clear introduction, a beginning, a middle, and an end – with no drift. Interim executives know that about halfway through an assignment, they should be preparing their handover and exit.

Our case studies provide examples of assignments and their outcomes.

Experienced interim executives will have shown their ability to adapt and contribute to a wide range of industries and sectors. Hiring an interim demonstrates the benefits of bringing in someone from outside your industry. They provide new insight, innovative ideas, and share best practices.

Interims have the competencies to learn and adapt quickly to different industries. You can find interims with experience in a particular industry, although this may limit the pool of suitable candidates.

Our advice: focus on what you need the interim to do, rather than being too concerned with sector experience.

Interim management firms should help you select the best interim for the assignment. To do this, they must have strong networks.

Many interim management firms are available. Larger ones aren’t necessarily the best for you. Talk to firms that seem relevant to your needs and choose consultants who seem like they can help. There is one independent survey produced each year in the UK by the Institute of Interim Management (IIM). This gives a list of the highest-rated interim firms.

Ask the following questions when choosing a firm to work with:

• Are they interim management specialists? Some recruitment firms try to do everything, mixing their interims databases with those of people looking for permanent roles. Interims have competencies, motivations, and track records that make them a vastly different proposition from someone looking for permanent employment.
• Do they really understand your business and requirements? Whilst you might think a recruiter understands your business, there is little substitute for meeting to discuss what you need, the situation and cultural fit. Let them ask plenty of questions. Ask them to prepare an assignment brief. If the recruiter is also meeting and screening interims properly, they should be able to provide an accurately matched shortlist quickly.
• Do they identify one or two hand-picked candidates, or do they present a long list of CVs? If you need to hire an interim, you don’t have the time to trawl through lots of CVs. Choose an interim firm you trust and get them to give you their best two or three. Encourage them to give you candid insight and views on them. They should recommend who to hire, not simply send a lengthy list of candidates for you to choose from.
• Are they artificially siloed into practices? Many large recruitment firms split themselves into endless ‘practices’. Most either divide themselves by industry or job function. This silo approach risks missing the best interim for your business. It also misses the point. Some of the most effective interims have worked in eight to ten different industries in as many years. Some roles are so broad that categorising them under one job title means you may not get the interim you need. Interim firms should remain generalist and focus on what the interim does.

Selecting the right interim management firm can make managing change much easier. Interim firms should earn their money. They can save you time by demonstrating their knowledge of the most suitable interim executives available.

Confidentiality is key when a business is managing a critical change programme or dealing with an executive’s departure. So why broadcast your plans to the market unnecessarily? Choose and talk to one firm first and work closely with them. They will be motivated to be responsive and deliver.

Hand-pick your interim management firm carefully. Otherwise, as experience shows, you could end up with the wrong interim, which proves costly in the end.

The off-payroll working rules (IR35) can apply when temporary workers provide their services through a limited company to a client. The client is the organisation that hires the temporary worker’s services. They may also be known as the engager, hirer, or end client.

IR35 aims to ensure temporary workers and employees pay the same Income Tax and National Insurance. It targets temporary workers HMRC views as employees for tax purposes, based on its key tests.

HMRC relies on three key tests and some secondary considerations. They use them to determine whether a temporary worker is an employee for tax purposes:

• Control (of how work is carried out)
• Mutuality of Obligation
• Right of Substitution

These tests should be reflected in contracts between interim and hirer and should mirror actual working practices.

Inside or outside IR35?

Interims covering office-holder roles such as chief financial officer are usually considered an employee for tax purposes. This is known as being ‘inside IR35’.

An interim can remain ‘outside IR35’ in an office-holder role if they are delivering a series of change initiatives. A permanent employee would not carry out the work in the medium and long term.

If an interim is hired to deliver a series of change initiatives or to lead a change programme, then this is not considered employment. Assignments with a change agenda are usually considered to be ‘outside IR35’. In this case, change leadership skills are needed temporarily and are not required long term.

What do hirers need to do for IR35 compliance?

When hiring an interim executive, you should complete and exchange the following with them:

• Status determination (SDS): declares whether an interim is inside or outside IR35.
• Schedule of work: expresses in clear terms the assignment brief, what is to be delivered, and over what time frame.
• Contract: including clauses on control, mutuality of obligation, and the right of substitution.