Average daily rate of interim managers jumps to £93 per hour

The average pay of interim managers has jumped considerably according to the latest data available. The granular average pay rate backs this finding up, rising from £674 average in 2017 to £740 this year.

A new study conducted by IIM – the professional membership body for practitioners of interim management in the UK – held among 2,272 interim managers has revealed a number of key points about key developments in the interim management industry. It is a line of work for business veterans, with most interim managers in their 40’s, 50’s and 60’s, and with an average age of 52.5. Little has changed over the past decade in IIM's respondent base, save for a few such professionals beginning on the career path a little earlier.

One change that is significantly more noticeable is that the number of female interims is on the rise. Women who are interim managers have risen from 15% of the segment in 2004, to this year’s proportion of 27%. The majority of these individuals work in the private sector, at 65%, while just 35% reside in the public sphere.

In the interim management arena as a whole, 47% of professionals usually work as programme/project manager or as line manager. Interestingly, the most common purpose (at 30%) is in ‘consulting roles’, as interim managers are often more than capable of advising in addition to implementing strategy. Reflecting this enhanced skill-set, IIM’s study also found that pay is up.

The granular average pay rate suggests that pay for interim managers has risen from a £674 average in 2017 to £740 per day this year. Interim managers are typically paid on a day-rate basis through their Limited Companies, with around 90% of interim managers taking this route. Most interim managers have two projects, while assignments are most common (42%), then 1, then 3, while more than that is extremely rare.

Behind the jump

According to the Interim Management Survey, there are several main reasons for this boost. First, and perhaps most obviously, the researchers said it is because the market is good. For that reason, clients tend to be more open to hiring interim, without the need to scale back on spending.

At the same time, compared to previous years, the survey saw higher shares of respondents active in the private sector, where prices for interim managers are higher. This is due to a shifting population in the public sector, as many interim managers have left it altogether, or migrated to the private sphere.

The private sphere is understandably alluring to interim managers when the trends regarding pay are noted. Some 40% of public sector interims reported a decline in billable hours, compared to just 14% of private sector interims. At the same time, 28% of this group saw growth, compared to the daily rate of just 16% of public sector individuals, well below the 22% average of the overall sector.

At the same time, it is important to note that rates are by no means uniform across the sector. Fees fluctuate due to seniority, demand, industry and function. Due to this, interim managers can be paid anything from around £500 per day to £1,500, or more. The most typical pay is in the £600-£799 bracket.

Balancing act

While the majority of interims noticed that billable hours had risen, however, clients were also noted to reduce the number of billed days to counterbalance this. The lower chargeability is reflected in the average billed days, falling slightly from 2014’s 167 to 156 now.

On top of this, the percentage of interims who are ‘on assignment’ is shrinking. The current figure rests at 70%, a 1% decrease on the year before, and a much more drastic 9% less than 2014, with the sector having seen a steady decline since then. The present figures will give some in the sector cause for concern, as the number of those on assignment creeps back towards the low point of 57% just after the last economic downturn.

When asked by researchers to predict changes to the interim market by sector, many declined to panic, however, and most viewed the market as static. From those who did anticipate a change, there was more of an expectation that private sector opportunities would grow, and both public and third sector opportunities would decline somewhat.

Related: Freelance consultants satisfied with career, but concerned by falling fees.