[IMGCAP(1)]As uncertainty continues to surround the economy, companies of every size are seeking new ways to maintain high operating standards and stay competitive, while keeping bottom lines from shrinking further.
One response to this has been the rise of the flexible leadership paradigm—hiring senior C-level or senior, superior quality financial talent on an interim basis to improve operations and execute on initiatives without incurring permanent overhead.
As noted in the recent Harvard Business Review article, “The Rise of the Supertemp”: “…traditional models of work are being upended by a convergence of the emerging desires of top professionals and the evolving needs of 21st Century organizations.”
What’s Changed in the Market?
This interim executive market has changed dramatically in the last five years. At one point, “temping” was an option that was clearly secondary to more traditional employment models.
Today, this “Supertemp” model has become a career of choice, meeting the highest demands of top talent in the market, including compensation, flexibility, and interesting and challenging work.
Due to this influx of quality talent in the variable market, companies no longer look at hiring a high-level temp as a last resort.
Today, hiring interim executives has become the optimal and most strategic way to have access to exceptional talent to execute on top business priorities in a constantly shifting landscape. This option gives a company alternatives to highly expensive consulting resources while allowing them to keep internal infrastructure to a minimum.
Lean infrastructure has become the new normal for most companies. There is little appetite to rebuild to pre-recession state. For that reason, companies have moved away from the long-term investment and extensive packages often involved in hiring full-time talent at the senior executive level. That said, business is evolving and changing at an exponential rate, with executives having little time to sit around and contemplate what to do next.
This environment aligns perfectly with the concept of bringing in top talent on an as-needed and variable basis. Very often, needs arise to fill gaps when companies are going through complex stages in their life cycles, such as mergers and acquisitions, IPO readiness, high growth or various operating issues. Navigating these various stages often requires unique or specialized talent on a relatively short-term basis.
Leveraging flexible leadership in this way has become part of a larger focus on growing responsibly in a post-recession economy, and one that enables a firm to retain more flexibility.
With this context, the art of combining traditional organizational structures with a strategic complement of experienced variable talent is already becoming one of the human capital trends of the future. Business strategy and global mobility have made this an imperative to optimal productivity.
The most significant change has come from the employee side of this equation, where top talent is increasingly opting into this as a career choice. Companies now have access to more highly experienced and talented professionals than ever before, and they are increasingly driven by imperatives that make it natural to consider this talent pool.
Are You Ready for Variable Talent at the Senior Level?
The traditional way of thinking about talent is to think in terms of designing full-time roles and assigning ongoing responsibilities. Achieving the highest return from the use of variable talent often requires a shift in mindset and a clear understanding of the vision and strategy for how best to lead an organization forward to future state. Variable talent is often a good way to hold a company in steady state; however, optimally it should be utilized to achieve the most important goals of the organization.
Day-to-day operations can be easier to run with permanent resources, while at the same time deploying strategic and specialized resources for the execution of new initiatives, or the implementation of innovative ideas. Today, companies need to mobilize, innovate, and create almost every single day, not just every decade, as in the past. An injection of “change” is constantly required, in addition to the ordinary operations that support ongoing business activity.
Exactly how do you work with this new form of talent management? How do you hire and manage variable senior-level talent so that it adds an exceptional ROI in your company, while not causing unexpected execution and HR challenges?
The cost of variable talent requires a unique level of analysis within an organization. It lies on the spectrum between expensive consulting and permanent employment. Consulting firms are designed for clearly identified projects with highly structured methodologies, defined deadlines and deliverables. Permanent employees have annual salaries and benefits designed generally for long-term employment, which absorbs significant administration, vacation and other general corporate demands.
Analysis reveals that variable talent adds the most value, with a flexible employment model between these two traditional models. It should have a cost structure that can be absorbed economically and that aligns to some degree with a fully loaded permanent employee, usually compensation plus 30 to 40 percent annualized. Thus, a variable resource is not more expensive than a traditional employee. On a number of levels, the variability of this expense turns out to be a significant strategic advantage.
What are the Steps to Utilizing Variable Talent?
To make working with variable talent successful at the senior level, you need to prioritize and clearly identify the issues in your organization that are the most pressing. Then, take the extra time to build clarity around what resolving those issues entails and your desired strategic, operational or financial outcomes. While it is true that working with project-based resources will require you to be very specific about goals and deliverables, sometimes it’s helpful to bring in an objective resource to do an assessment and help you identify next steps.
Once you’ve identified what you need to tackle, you need to think about what types of resource would best fit both the need and the organization. Flexible resources, especially at the executive level, need to be able to fit your cost structure and your organizational culture.
A single independent consultant may fit your needs just fine, and there are many of them out there, but there are other circumstances where the path to success lies in working with a full-service professional services firm. In the professional services landscape, there are many options.
The recession has caused the market to be somewhat flooded with “single shingle” individuals who are easily accessible through various social media channels. In addition, there are thousands of small boutique firms, as well as many national and global professional services firms. Many are hybrid staffing/consulting models on a fairly complex continuum between the two traditional models. It is definitely worth taking the time to explore the market and examine which one fits your firm best.
This really is an extraordinary time for companies to rethink their traditional approach to talent management. Never before has top talent been so mobile, transferrable between companies and available in the market. The best companies will figure out how to take advantage of this.
Karen Macleod is president of the professional services firm Tatum.
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