UK retailing has proved its resilience
March 5th, 2010
We’ve been through the toughest recession most people can remember, but UK retailing has proved its resilience and emerged in good shape. It’s not been easy, but by focussing relentlessly on the customer and continuing to innovate, the majority of the UK’s retailers have come out the other side stronger.
The winners at this weeks Retail Week Awards in London were businesses who have focussed on investing on improving the customer experience – often across multi-channels – and going further than ever before to meet the ever-increasing expectation of today’s shopper.
There is a feeling of quiet confidence in the network of retail interim managers I regularly update with and although we’re not out of the woods of uncertainty (a possible double dip recession or hung-parliament) it’s time for retail businesses to continue to innovate and invest in change. There is still going to be a demand for interim managers that can value engineer – those who can identify opportunity in a business and by returning a significant return on investment can show that a retailer can get a lot back from not a lot of financial commitment. So, lets look forward to a more buoyant few months as the recovery continues.
A cold start…
March 5th, 2010
Before Christmas I felt fairly optimistic that we were moving back towards positive territory – and sure enough, Q4 GDP figures confirmed exactly that. All good. The Purchasing Managers’ Index rose to a 15-year high in January. Even better.
So why has the manufacturing and engineering interim market gone rather quiet? A number of interims have reported that despite enquiries picking up in January, there has been a marked decrease in activity over recent weeks.
I would be interested to know from readers if this is more widespread and their thoughts as to the cause for this? Please add your comments.
The view that recruitment bears a very close correlation to client activity would indicate a flat first quarter for GDP, and possibly worse for manufacturing. The marked increase in activity from the Financial and Business Service sectors appear to be fundamental in underpinning the overall recovery, and will I think prevent the much talked about ‘Double Dip.’
Whichever way we look at it, the recovery is very fragile and data remains mixed – surveys announced consumer confidence reaching a two year high whilst spending declined; new care sales rose again, whilst house prices fell.
So where does this leave us?
Certainly in a better place than 12mths ago, the free fall in orders and revenues have stabilised; costs have been slashed via a combination of pay cuts; reduced shifts and redundancy and the figures for the manufacturing payroll have seen a slight rise which bodes well for the longer term.
Ultimately, it’s going to be another tough year – let us hope the IMF comes to the aid of Greece and the election does not result in a hung parliament!
A great start to 2010
March 5th, 2010
I am pleased to announce that for the Business and Support Services sector the demand for Interim Managers has risen dramatically since the end of last year.
There seams to be a real appetite for change in the market place and clients are engaging with us to talk about large scale change programmes and the replacement of under-performing senior management.
I will post a further blog in a few weeks to talk more about quarter one results and quarter two predictions but it is looking good so far.
If you are a professional Interim Manager I would like to hear your thoughts on how you are finding the market and if you have seen an increase in activity in the last few weeks as I have.
Renewables – green shoots
March 5th, 2010
The renewables sector is forecast to grow and become an increasingly important part of UK Plc’s recovery. Iberdrola announced plans recently to build turbines for offshore wind farms in Glasgow, creating 100 jobs. This is the latest in a line of similar announcements including Mitsubishi plans for a R&D centre. The sector which currently employs around 5000 is forecast to grow to 45,000 - 50,000, a boom comparable to the North Sea some thirty years ago. The demand for interims in the sector is also on the increase however the key challenge our clients face is identifying interims with the right sort of experience.
There is a genuine opportunity here for interims to rebrand themselves and develop a highly profitable set of skills and expertise. Interestingly, we are seeing interims with upstream oil and gas experience rebrand themselves as renewables experts. The skill sets are clearly transferable, particularly for offshore wind and carbon capture and storage.
Happy New Year!
January 8th, 2010
2010 promises to be an exciting year for the energy and utilities sector with a positive outlook for interim management. There are a range of factors that will drive change throughout this year and beyond and inevitably demand for interim managers will increase. With an estimated requirement for over £200bn worth of investment in the UK’s energy infrastructure over the next 10 years I believe it will present a plethora of opportunities.
The UK nuclear strategy is slowly crystallising and projects in this area are moving ahead. Funding for renewables projects is more readily available and there has been a general increase in M&A activity within the sector. The new regulatory period starts for water utilities and is bound to present a raft of opportunities for change as they all seek to improve efficiencies and deliver new capital programmes. The energy utilities are all pushing ahead with renewed vigour to improve their operating models and reduce cost to serve. Oil and gas companies are now reviewing their business models and reversing away from cost cutting strategies as the oil price stabilises.
Here’s to a healthy and prosperous 2010!
Duncan Hoggett is Head of the Utilities Practice at Interim Partners.
Financial Services Practice wins two major new accounts
January 6th, 2010
I am delighted to announce that in recent weeks the Financial Services Practice at Interim Partners has been awarded a substantial contract with RSA to supply interim change professionals for the next 2 years.
RSA is a FTSE 100 insurance business with £6.5bn of annual premium income and they are implementing large scale transformation programmes during 2010. The contract commenced on 4th January and will focus on the supply of Business Analysts, Project Managers and Programme Managers. This contract award represents a major step forward for our company and hopefully a significant boost for the Change sector of the interim market which faced head winds during 2009.
We have also signed an agreement to become a preferred supplier of interim resources to Lloyds Banking Group. The size of the integration and disposal programme created in the merger between Lloyds and HBOS last year will undoubtedly be a catalyst for interim management demand. This agreement is also is effective from 4th January and will be a meaningful addition to our stable of leading financial services clients including Aviva, Prudential, Aegon, Bradford & Bingley, Bupa Insurance and Royal Liver.
December proved to be a very productive month and I placed 7 interim managers, 5 of which were in the week before Christmas. My team has picked up 5 new assignments in the first 3 working days of January so early indications are that by next Christmas we will deserve a well earned rest!
I would like to take this opportunity to wish all those within the Interim Partners’ network a very happy and prosperous new year.
Andrew McIntee is Head of the Financial Services Practice of Interim Partners.
Diet or feeding on pastures new?
January 5th, 2010
I’m not sure about anyone else out there but quite frankly I am happy that 2009 is over. In the last 12 months the support services industry embarked on a large cost reduction exercise which was a complete (and necessary) reaction to many of its customers reducing spend and therefore potentially reducing operating profit unless costs were cut. The media was awash with redundancy notices which had an impact across all functions and any staff remaining are still feeling the change in culture where governance is now king. This affected Interim Management as many programmes were shelved along with anything else that required expenditure.
Will 2010 continue to be a year of trimming the fat or will it bring a renewed urgency for profitable growth?
In December many in our Industry were talking about sizing up lucrative outsourcing deals including a high profile move by VT Group to buy into the market and target Mouchel for acquisition. Diversification was also a hot topic at the end of the year with many companies looking to capitalise on existing customer relationships to deliver expanded services. Thankfully for my sector the model has already proved successful; I realise that they are public sector focussed but you only have to look at the success of Capita and Serco to understand that support services companies can diversify into almost any service offering and deliver it well by initially utilising the right amount of expertise and customer relationship management.
I personally think that 2010 will be an exciting year for support services companies that are at the forefront of change and diversification; Local change programmes will be re-instated as long as they benefit the customer and intelligent cost reduction programmes will have a National, European or Global effect and will be for the long term. A move into complimentary services will feature in many companies’ strategy reports and all of the above can only be good news for proven Interim Managers or Industry experts.
I would like to hear your predictions for the Support Services Industry in 2010; do you think that companies will diversify to offer a broader service to existing clients? Do you think that the focus will be on growth rather than further cost reduction?
Mark Kitchen is Head of the Construction and Support Services Practice of Interim Partners.
Demand is Infinite – How will this Effect Interim Management?
December 14th, 2009
With the end of 2009 fast approaching and a fresh New Year looming I am pleased to say that many of our clients are already starting to talk about the lifting of spending freezes and the need to increase headcount next year if long term strategies are to be brought back on track. I am hearing of an increased number of businesses making plans to bring on board interim managers to bolster their numbers in what they hope is going to be a positive start to the year. Many will be hoping to shake of the budgetary shackles imposed in 2009 and restart projects shelved during the recent uncertain financial times. From a supplier to the sector’s point of view I am encouraged by the views of one particular CEO of a fast growing mid-tier pharmaceutical developer and producer who went on record stating that in his view, for the pharmaceutical segment, ‘Demand is infinite’ – with no therapeutic cure for the majority of diseases. Take diabetes for example – we can treat it, to a large extent, but we can’t cure it. This makes pharma an interesting market, and this, with all of the other changes in the segment, does pose challenges for the survival and growth of individual pharmaceutical corporates.
What I find most encouraging from this is that the UK is one of the world’s leading pharmaceutical producers and exporters. It is home to two of the sector’s largest companies; GlaxoSmithKline and AstraZeneca. Behind these, there are a large number of smaller companies specialising in R&D and biotech product. You only have to visit some of the Oxford/Cambridge Bio parks to be amazed by the amount of impressive new companies breaking out into the sector. Importantly a great deal of those who I speak to are either using interims or do embrace the notion of interim managers and fully understand the benefits associated with highly experienced specialists who are prepared to be flexible during the early years and beyond.
What I can also see is further collaboration and mergers requiring ever more flexibility in the size and shape of workforces. This will in turn lead to the continuing need for contractors and interims once companies resume their long term strategies in the New Year having put on hold for too long many of the much needed investment and change projects that have been an evident feature of pharmaceutical companies over the last decade.
I hope you all enjoy a well deserved Christmas break and I look forward to what I’m sure will be an equally challenging yet more rewarding 2010.
James Fargus is a Senior Consultant in the Pharmaceutical Practice of Interim Partners.
Where are we now and what can we expect for 2010?
December 7th, 2009
I think it is fair to say that all the interim managers specialising in the manufacturing and engineering sectors were painfully aware that the Prime Minister’s optimistic view that the economy was returning to growth in Q3 was nonsense – to be fair, even the City analysts got it wrong with the fall in industrial output of 2.5% far greater than their forecasts of a 0.2% rise.
Equally, I sense that we will return to positive territory in Q4 (if only just), based on the amount of increased activity Interim Partners has seen across the Private Sector, in particular since late October.
Recruitment bears a close correlation to economic conditions, and the surge in enquiries and a number of placements across all sectors suggests we are finally beginning to see those green roots become established. Our interim managers have also sensed an upturn in activity with more potential opportunities in the offing, even if they are still slow to convert.
Clients are also in the main, more confident now than they have been for the last 12 months – they caution that we’re not out of the woods yet, that the recovery is fragile, but they also add that numbers are recovering and the initial panic is over.
So what can we expect next year? I would be interested if you would share your thoughts with me. Key factors to my mind are as follows:
Commodity Prices: Oil in a word. Soaring oil prices will inhibit prospective growth
and were a major factor in tipping manufacturing further into the red. With prices
hovering at the $80 barrel mark there’s a danger that growth is already stalling, and
pump price increases are already hitting consumers where it hurts.
Quantitative Easing: At some point this has to stop. It’s going to be a tremendous
challenge to a new Government to manage the process without harming credit
streams, and to continue pushing taxpayer majority owned banks to meet Whitehall
imposed lending targets.
Tax rises: At some point these will have to rise to pay off the above, and again,
consumers will have less to spend.
The Dubai Effect: This barely caused a ripple in London, but raises the spectre of
ghosts past. Default on a larger scale would cause London and the credit markets to
implode.
Which ever angle you look from, it seems next year will be steady – yes, fears over the UK economy and national debt is devaluing Sterling, good for exports; yes, consumer confidence is much stronger, reflected in house price increases; and yes, the bankers are receiving huge bonuses again – always the sign of the good times… right?!
However, there’s no escaping that in manufacturing and engineering it’s a tentative recovery. I can’t see strong economic growth occurring for quite some time to come, and I expect next year to be a repetition of the stop:start growth pattern experienced over the last 5 months. But I don’t see those green shoots wilting
Tom Legard is a Senior Consultant in the Manufacturing Practice of Interim Partners.
Scramble for Risk Managers Boosts Their Pay - Financial Times 17th November 2009
November 19th, 2009
A rush by financial services companies to hire interim managers who specialise in risk and compliance work has driven their pay up by 50 per cent over the past two years, according to a leading provider of such managers.
Interim managers with risk and compliance experience were typically earning up to £1,000 per day before the credit crunch, but many are now earning up to £1,500 according to Interim Partners. Companies are seeking temporary managers to bolster their in-house expertise as risk officers are increasingly asked to challenge decisions by operational managers.
The move is part of a shift in power within banks and financial companies from sales staff and traders towards those dealing with credit control, risk and compliance.
Barclays recently appointed Robert Le Blanc, chief risk officer, and other control and governance managers to its group executive committee.
Jane Hanson, a consultant who advises companies on interim posts, said the shift had been given increased urgency by Sir David Walker’s report on governance in the financial services sector.
“There is now an increased requirement for more experienced, more commercially focused risk management and compliance professionals to operate at a high level often at the top table,” she said.
This was demanding new skills from risk officers, who were required to analyse and challenge executives’ decisions on issues such as portfolio acquisition, pricing or product type, instead of focusing on reporting as they did previously.
Ms Hanson said directors from other parts of the business were increasingly moving to risk roles because of their high profile.
Andrew McIntee, head of financial services practice at Interim Partners, said that before the credit crunch, compliance and risk were sometimes seen as a necessary evil.
“Now the value of these previously unsung heroes is being recognised. They have more say over what deals get done than at any time since the last recession” he said.
“As with all rare skills, the pool for the top talent with a proven track record is small – with everyone looking to recruit at the same time, rates get pushed higher quite quickly,” he added.
Andrew McIntee is a Director and Head of the Financial Services Practice of Interim Partners.
