What if you could hire the brainpower of a senior-level, former Fortune 500 executive at a fraction of the cost of a permanent hire or a consulting firm? That’s the idea behind temporary executives hired to tackle problems rather than fill positions. Such an alternative work arrangement helps companies that need expertise but can’t afford the high overhead of a full-time leader. It also can be professionally satisfying for executives who want a flexible career that enables them to use their expertise. And agencies that bring the two together meet a need in the marketplace and reap financial rewards.
Jamie Pennington identified the need for such an agency when she left a high-powered job as an investment banker on Wall Street three years ago after having her second child. She couldn’t balance being a mother with the hours and travel required for her full-time position. She also couldn’t find a flexible alternative that allowed her to use her business and financial skills. So, Pennington founded Flexible Executives in Atlanta, enabling her and other talented executives to take their knowledge and experience to small and mid-size companies on a project basis.
“We saw a disconnect between the huge pool of semi-retired executives and a lot of corporate women with terrific backgrounds who had left the corporate world for personal reasons,” Pennington says. “On the other side, a lot of small and mid-size businesses didn’t have an outlet to hire those people in a project setting.” Her research shows that many small and mid-size companies do not outsource because the cost is prohibitive. “This is a way for those companies to get the same expertise at a lower cost,” she maintains.
The number of executives wanting flexible work arrangements is growing as corporate managers get laid off. They join educated and experienced working mothers as well as baby boomers who want to stay engaged in the business world while also spending time on the beach or the golf course or with grandchildren. The U.S. Bureau of Labor Statistics projects that the number of managerial-level temporary workers grew 78 percent from 1996 to 2006.
Finding these people is becoming easier as companies such as Flexible Executives, Mom Corps of Marietta, Ga., Interim Executives of Charlotte, N.C., and Executives Unlimited Inc. of Long Beach, Calif., sprout up. And HR professionals at small and mid-size companies can tap these executives for help on projects from conducting new-product research, to implementing a software platform, to guiding the company through a merger or acquisition.
“It’s broader than what you might think of as interim management, of someone filling a role for a particular time. It’s more value-added,” says Bill Mustard, founder and managing director of Cairn Executive LLC, an interim placement firm in Mount Kisco, N.Y., that focuses on project leadership and solutions.
Who Are They?
Liz Ward had 16 years of advertising and marketing experience at large New York agencies and had started and run her own firm in San Francisco. When her husband took a position in Atlanta and the family moved, she found herself with no network, no desire to pound the pavement for a full-time gig and no intention of throwing away loads of experience. Enter Flexible Executives.
Ward recalls that Pennington “spent a lot of time with me upfront to get the full picture of what I can offer. And she does the same on the client side to understand what companies need.”
Flexible Executives is growing slowly but steadily with a few hundred executives in its database. Most are former senior vice presidents or C-level executives with an average of 18 years’ experience. The company performs the same vetting that any placement agency would in background checking, resume authentication, reference checking and interviewing.
To keep “flexible” in the company name, Pennington filters out executives who want to treat assignments as auditions for full-time employment. “I ask if they are primarily looking for permanent work, and if the answer is ‘yes,’ then I punt them to one of the executive recruiters,” she says. “It’s a different environment to come in and say, ‘I’m here to help. I’m here for six months to solve this problem. And I’m not here to take the CFO job from you.’ That, in our experience, creates a much more collaborative, positive work environment.”
What’s more, the type of work tends to attract professionals different from those looking for permanent placement. “Typically, it’s an individual with gray hair who has achieved a level of great success,” says Tomilee Tilley Gill, founder and president of Executives Unlimited. “Salary isn’t as important as is helping the company and being flexible. They are more strategic and make quick, clear economic decisions.”
Mustard sees three types of executives seeking project, problem-solving work:
- The older, highly experienced executive who doesn’t want a full-time job.
- The experienced professional who is between jobs and wants to focus on a project while deciding what to do next.
- The consultant type, generally younger but experienced and preferring to work from project to project to maintain flexibility.
How It Works
Zaina Adjacke started Tangentworks, a software company in Atlanta, during 2006 and now has six employees. While Adjacke focuses on day-to-day responsibilities, she needs help with market research and writing a business plan to attract investment dollars.
“I can’t afford a C-level team,” says Adjacke. She has since leased two C-level executives from Flexible Executives -- Ward in Atlanta and an investment banker in Denver. “I wasn’t sure what skill set I needed, so I spoke with Jamie to help me through the process. I knew what I needed to end up with, but I didn’t know how to get there.”
Typically, the client’s HR executive fills out a profile online, and a Flexible Executives project manager makes contact to get more information about the company and the project. “At that point,” Pennington says, “you can even look online at our database and search for someone with, say, experience at Coca-Cola, because you’re a beverage company, or someone with marketing experience at a Fortune 500 company or someone in a certain geographic area.”
The database includes rates and fees. “People work the best when they feel they’re being well-compensated. So we let the executives set their own rates,” says Pennington. “You may be a New York company that hires someone with New York experience but [who] now lives in Montana, and so rates will be well below what you’re used to paying.”
Indeed, Ward lowered her rates after moving from San Francisco to Atlanta, where it is less expensive and she no longer has the overhead of an agency.
The executives are paid as independent contractors by Flexible Executives, and each receives a Form 1099 at year-end. They do not receive benefits.
The project manager determines the scope, cost, time frame and deliverables after discussions with the client, then arranges for a “chemistry” meeting with an executive whom the client found in the database or with candidates recommended by Flexible Executives.
Once the person is on the job, the project manager follows up with the client and the executive frequently, does a postmortem after project completion, and checks back three months later to make sure the client is still satisfied.
Similarly, Executives Unlimited pays executives a gross monthly fee and handles taxes and benefits. Gill says Executives Unlimited also invests in discussions upfront. “We always require that HR [professionals] be involved because they help us with the culture and help match the right interim for the company,” says Gill. “It’s the same due diligence as in hiring a permanent placement. We talk to HR extensively about the key requirements for the role. We meet with the people who will be working closely with this individual. We work with HR to find out what the organization looks like today and what they want the organization to look like in the future and how this individual will help them get there.”
Mustard says sometimes clients call with one problem and he discovers another problem. His company is part consultancy, part temporary-placement firm. “We go in and help companies correctly diagnose the problem and then find the person with the right expertise to handle that problem.”
All placement executives recommend treating the temporary hire as you would any other, and they stress the importance of onboarding. When hiring, use your competency model and look at the key characteristics of leaders that you as a company have identified. Above all, have a plan with set goals. If the executive isn’t working out as desired, call the agency. Most have guarantees and will replace the interim at no extra charge.
While problems with placements are rare, according to the placement executives interviewed for this article, they do occur. Usually, problems stem from lack of direction or poor communication. Sometimes, the situation itself can create obstacles for the interim executive. “Of course, you get backlash from employees because you could be going into a situation that at best can be categorized as antagonistic,” says Mustard. “You might be replacing someone who was well-liked even if he was underperforming. Or, you may be coming in to solve a problem that resulted from a mismanaged department.”
Mustard approaches such situations head-on and says HR can help smooth tensions with open communication. As a temporary placement, Mustard says, “sit down with employees and explain why you’re there and why the executive team hired you. Then you meet with the team and ask for each person’s support.”
Gill takes the opposite approach. “We advise clients not to reveal that this person is an interim executive to anyone below the top level of the company,” she says. “If the person is announced as an interim to the general employee base, it could be more political. You may not get support from people if they know the executive is only there for a short time.”
In the end, HR professionals must decide on the best approach for the company and culture.
As the economy heads into uncertain times, using flexible or interim executives represents one way to turn the staffing spigot on and off as needed. Pennington says, “It’s a cost-effective way to keep your growth strategies without making any significant financial commitments.”
The author is a freelance writer in Alexandria, Va., and a contributing editor and former managing editor of HR Magazine.
Executive Temp Solutions
A temporary executive may be brought in on a short-term, project basis to do the following:
Solve a critical problem without saddling the company with the financial burden of a full-time employee.
Help a business expand rapidly.
Guide a company through a new-product launch.
Prevent costly mistakes caused by a temporary lack of leadership.
Help a company through a transition or reorganization.
Give a company time to seek a permanent hire.