The stock slump means interim executives could become a fixture in the C-suite


These are turbulent times for business. Shortages of labor and supplies mean work isn’t getting done. The Great Resignation has left companies without senior talent. And as market gyrations fuel worries about the economy, everyone fears hiring the wrong top executive, especially at fast-growing companies.

In response, companies are increasingly turning to interim executives. Whether they’re CEOs, CTOs, or CMOs, seasoned leaders are called on to tackle projects that can’t wait for better times or permanent hires. A temporary CEO could handle an acquisition. A CTO may oversee the implementation of a major system. A CMO could put together a new marketing strategy. Think of it as an injection of top-tier talent. Interim executives address your most pressing needs and then leave once the project is underway. Even better: Without a long-term commitment, there is less long-term risk.

Growth can’t wait

Consider an unpopular technology upgrade that has been needed for some time. Anyone who takes it on knows that the expense and ruffling of organizational pens can make their career precarious. However, if you simply appoint someone, they may not have the skills to do so. The best permanent talent may be out of your price range: The average CTO salary can cost a company a minimum of $250,000 a year.

However, over the course of a few months, an interim CTO can create a strategic technology plan and determine which systems to employ. Once the heavy lifting is done, they can move on and you can hire a cheaper manager to handle day-to-day operations.

Surprisingly, finding such a talent is not as difficult as it seems, thanks to the Great Renunciation. While there is no hard data on the number of interim C-suite executives available or how many companies are hiring them now, I am seeing an increase in demand for these positions and the people who will fill them.

For quality-of-life reasons, many successful 20- to 30-year executives prefer to work just six months a year. Recent retirees still want to contribute. Executives who are between opportunities are willing to take a temporary contract to prove themselves. Search companies have already screened the candidates and just need to determine if they are a good fit for your organization.

Seasoned interim executives are used to being on the spot and meeting deadlines. They are not hampered by office politics and are solely focused on getting the job done. They can keep the business running during maternity leave, or they can tackle specific tasks that a small business isn’t yet equipped to handle.

Young companies that cannot afford a CFO can hire an interim person to oversee fundraising, a proper set of books, and the financial model investors require. When the job is done, this person gives way to a vice president of finance more appropriate for the size of the company. Other companies may want to launch in a different part of the world. An intern can chart the course in an unknown market until he is up to speed.

If a new vertical has been discussed in the last year, a three-month interim hire may be awarded to prove it will work. They can also be used to handle nasty stuff, like getting rid of an underperforming split.

A temporary hire signals to investors that senior leadership has creative hiring solutions and is financially astute since the position does not add to the workforce. It also assures investors that young leaders are willing to learn from more experienced coaches.

Sometimes the part-time solution can even become a permanent solution: I know of a large insurer that let its CEO go on short notice. Regulators demanded a replacement within weeks. A former insurance executive weighed in. He ended up staying for five years.

Despite the obvious benefits, many companies resist the idea of ​​hiring an interim executive. At first glance, it seems expensive: premium talent comes with premium prices, and hiring a contractor typically costs about a third more than in-house talent. However, these expenses are short term and often cheaper than lost opportunity costs or a non-performing permanent hire.

This does not mean that it is a panacea. Interim CEOs typically can’t help a company that has had three CEOs in the last five years. These firms are better suited to a traditional search process, in which the board and senior management figure out what’s wrong and then decide what they need. But for most other businesses, hiring an interim C-suite can address a variety of needs, especially now.

Inflation, supply problems, and talent shortages aren’t going to go away any time soon. Reducing risk across the organization should be a priority for all today’s boards and executives. Attacking major initiatives with smart, motivated, temporary, and often overqualified hires will reduce expenses, complete projects, reduce interpersonal friction, and reassure investors.

David Kinley is CEO of blue nose and company.

Opinions expressed in comments are solely the views of their authors and do not necessarily reflect the views and beliefs of any Fortune.

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