In this edition of 'In Conversation' we bring insights and expertise from our esteemed Industrial Partners: David Thomas, Managing Partner of the Industrial Executive Search team in the UK, and Claire Lauder, Managing Partner of Boyden's Interim Management Industrial Practice in the UK.
Gain valuable perspectives as they share their insights on the current landscape of UK industrial businesses and the challenges anticipated in 2024.
David Thomas, Managing Partner
Claire Lauder, Managing Partner
What are your predictions for executive hires in Industrial businesses in 2024?
CL - The feeling I got in 2023 was that many clients recognised a need for executive talent, whether interim or permanent, but there was a lack of confidence in decision-making. 2023 seemed to be the year where every hire required the approval of multiple stakeholders; the processes were numerous steps that dragged out over extended periods and continually moved the goalposts. Heading into my 13th year of being a specialist in interim management, I have seen that a lull is followed by a flurry of activity and a flurry of activity is followed by a lull. How long each of those phase’s lasts is always an unknown. However, the PE market became a lot more active at the end of last year going into this year, which is a positive marker for the interim market. I anticipate Q1 and Q2 2024 being busier than Q1 and Q2 2023, and we shall know whether I am right imminently.
DT - Decision-making was understandably slow for hiring last year, with business confidence low. We anticipate further caution this year, but there is capital to deploy and some signs that market conditions are improving. The next macro-shock is probably just around the corner, but UK Plc has the resilience to cope. January has seen clients asking us to pitch for Sales, HR and Finance leadership positions, in addition to International Operations and overarching Chief Executive opportunities. Our PE Practice is busy, and we have outperformed January 2023. Our mood is echoed by conversations with peers outside our business, which is a good sign.
What were the drivers for interim hires in 2023, Claire? And David, where was the demand for permanent hires in 2023?
CL - The last few years have been interesting; the first six months in 2020 were difficult following our first lockdown. But for many of my clients, typically industrial specialist manufacturing and engineering businesses, the second part of 2020, through to Easter 2022, was the busiest I have ever seen in the interim market. The drivers were positive: order books bulging, supply chains creaking, investment in new factories, marketing rebrands and commercial overhauls. Then, the end of 2022 and the first 4-5 months of 2023 went very quiet, and when the market picked up again, the drivers were very different. For most of 2023, the interims I was placing all had some focus on improving working capital; the demand for finance interims was the busiest it had been for a while, and businesses were paying more attention to procurement and how to not only buy better but how to work with their supply chains better and increase the frequency of payments. The theme for interim for me in 2023 was cash, cash, cash. All roles had a cash optimisation theme: finance, procurement, operations and large-scale transformations.
DT - With a poor economic backdrop, we saw more replacement hiring than growth hiring, but there was still an interesting balance in assignments undertaken. Supporting high-growth startups and scale-ups has been particularly stimulating, as has trying to find replacements for long-standing leaders who stayed on post-COVID but felt the time was right now to retire formally.
How do you establish when your clients need search services versus interim services?
CL - Interim managers are usually dedicated specialists hired in a business-critical situation, where the cost of not doing something immediately outweighs the cost of hiring a specialist. This means the interims need to have experience resolving a similar challenge before, be immediately available, and come with a strong track record of client testimonials vouching for the work they have delivered. Quite often, an interim manager will be overqualified for the longer term but offer rapid problem-solving in the short term. So, in essence, the business needs to drive the talent solution, and the permanent and interim talent pools are very different, which will influence whether we would suggest a interim or search approach.
DT - Interim and leadership consulting opportunities tend to fall naturally out of conversations when discussing the issues in a business with stakeholders. The benefit of offering both interim and permanent services is providing the right solution depending on the discussed circumstances. Claire and I often partner with the same clients where an urgent requirement naturally leads to the need for a longer-term permanent solution.
Does this mean you are competing for the same talent between the need for permanent executive hires and interim managers?
CL - Not at all. Typically, interims must be available on 1-2 weeks' notice, precluding most permanent candidates. But perhaps more importantly, whilst there are transferable skills between a permanent and interim executive skillset, ultimately, when you hire an interim, you are paying for someone who has demonstrated that they can influence as an outsider and make an impact quickly. Most permanent candidates are not expected to pay for their costs in month one, but most interims have a small window to add value quickly.
DT - There can be some overlap, but generally, the interim market is distinct and specialised, requiring a very different mindset to a long-term permanent solution. We are seeing an increasing trend towards six month notice periods for executives, often with them being served. This factor alone creates different candidate pools before you even look at skills.
One would assume that you are both doing a similar job, i.e. matching people with companies; what are the main differences between search and interim when it comes to identifying talent?
CL - Despite our jobs being similar, the process is hugely different. For interim management, we front load the due diligence of a candidate before we even have the work, i.e. we meet them, take their references, and read through their case studies so that when we have an interim role, we have a prequalified longlist of candidates to pick up with. Who we meet and why we meet them, well that comes down to our experience; we know what skills are most in demand in our clients and will always make time to meet those individuals. Also, the mindset of an interim is very different from the mindset of a permanent candidate. Professional interims are more comfortable with ambiguity; they recognise that an interim scope will evolve as they are in post, and they will play a part in developing the scope. They are typically more focused on the immediate to short-term challenges and have zero interest in securing a permanent role, which means they speak freely and find it much easier to deliver complex messages because the bad news will not impact their future promotions or pay rises. Most CEOs find working with interims quite refreshing as there is less political gameplaying.
DT - The UK search market requires a depth of knowledge and expertise in your specialism, and inevitably, you build networks that help when you start a new search. At the same time, it is always important to adopt a ‘blank sheet of paper mindset’ and challenge your thinking. This ensures you can produce diverse and exciting shortlists for clients. The most significant difference is time; interim requirements are usually solved within a week, and the search process is inevitably a slower burn. My time is balanced between being client-facing and spending time with candidates. Indeed, candidates become clients and vice versa.
Seize the opportunity to enhance your executive hires in 2024. Obtain more information on Boyden's UK Industrial Practice and request a brochure today for tailored solutions in the evolving industrial sector.
