Multinational companies have always had managers, sometimes cross-functional teams of managers, ready to take rapid action to solve serious, urgent management problems in the group and in its affiliates abroad. These are exceptional resources. They speak foreign languages, have a deep knowledge of the company culture and expertise in all aspects and tools of management. No longer young, they have experience in general management in companies in the group and have acquired considerable all-round skills. They are usually assisted by younger managers, specialized in specific functions or business processes.
In a sense, temporary management firms have adopted this role, offering, first to small and medium-sized enterprises and then to large organizations, a pool of managers who can deliver solutions to challenging problems within a set timeframe.
Over the last few years, the landscape has widened. New players have appeared, in addition to those firms who first specialized in temporary management: executive search firms, management consultancies, managers’ cooperatives, recruiting agencies and a range of freelance managers.
All these players claim to practice temporary management, even when this is not exactly the case. This is because the sector is going through the growth phase of its life cycle. In fact, the labor market is undergoing major changes. There is a large supply of managers available, and companies are very interested in this new service. Moreover, some entrepreneurs, whether from this sector or others, have decided to enter this market (with methods that are not always orthodox) on this wave of enthusiasm. Today, temporary management firms in Italy can be divided into four groups by origin:
1. Temporary management firms
Having started as an offshoot of the management consultancy business, they specialize in interim assignments at general management level, as heads of function, and in project management. They are different from their competitors because they take responsibility for providing a solution to the client’s problem. Temporary managers do not operate in isolation but have the ongoing direct support of the temporary management firm. It is the firm which handles the relationship with the client, is accountable for quality of the service and provides the appropriate managerial solution to solve the problem.
2. Executive search firms
They specialize in recruiting top level managers via personal contacts and keep large numbers of managers on file that they can place on open-ended contracts. Their clients are usually large or medium-large companies who have used their services for years. Hence the service is well established. These firms are mainly of international standing. Those who have set up companies or divisions for temporary management have gradually accumulated a database of managers who are prepared to work on short-term assignments. The type of service they provide does not differ much from that of open-ended contract appointments. They analyze the client’s needs, consult the files then identify the candidates who best meet requirements. The shortlist is presented to the client, who makes his/her choice and pays a fee calculated as a percentage of the compensation to be paid to the manager. The relationship between the client company and the temporary manager is thus direct and based on a fixed-term contract, whether for consultancy or project-based. The interim manager receives no support from the executive search firm. When the contract expires, the relationship between the manager and the client company may be converted into an open-ended employment contract if both parties so desire.
3. Freelance Managers
After coming to the end of a career, or after resigning from a company, some managers offer their services on the market as temporary managers, especially to small and medium-sized companies. They act as professional temporary managers but in a position more alike that of consultant. There is no filter, no intermediary, between the company and the manager. The manager “sells” himself on the basis of his own abilities and managerial skills and his flexibility. But, above all, his success in obtaining assignments depends on his ability to market his product – i.e. himself. The process of selection and evaluation of candidates is carried out directly by the company. They may indeed find valid solutions, provided they are able to make the right choices. The manager undertakes the assignment as a self-employed person with a contract for consultancy or on a project basis. If the company is interested, this may be converted into a contract for long-term employment. If there is no need for this, or if the manager prefers to stay freelance, once the assignment is over he will have to look for another job. Freelance managers in a temporary assignment usually set aside part of their time to public relations, networking and cultivating relations with potential clients with a view to securing further assignments. Inevitably they work in isolation, both operatively and culturally. They receive no help from colleagues. They have no opportunities to share with anyone their experiences or have access to new management thinking.
This is an interesting way in which entrepreneurs have pooled resources to face the problem of finding work for a professional category that never had particular problems in this respect in the past. These associations promote awareness of temporary management as a solution. If there is a placement, the relationship is directly between the company and the manager selected from among the associates, as in the case of managers selected by executive search specialists. The client agrees the fee directly with the manager selected from a shortlist of possibly two or three candidates provided by the association. If the client is interested, the contractual relationship with the freelance manager may eventually be converted into an employment contract.
All claim to practice temporary management but it is a misuse of the term if it just refers to a manager who is rented out to a company in the short term, rather than being taken on as an employee. Short-term contracts have always existed between consultancies and client companies, in the IT systems area for example. The practice is not new, although it has become more common over the years. What is new, however, is temporary management in its classic sense because the role of temporary manager is a profession in its own right with its own distinctive features. It cannot be improvised, nor should it be considered a fallback solution to replace engaging a manager on an open-ended contract. In future the different forms of operation will probably be more sharply defined and just two will emerge, as has happened in other countries in Europe: classic temporary management, in which a specialist firm assumes full responsibility for the assignment and “body renting”, where responsibility for results lies with the individual manager him/herself.