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Thanks once again to all of those who responded to our recent survey on interim management in the NHS. I wrote an article summarising the findings in the most recent Interim Partners newsletter, we also issued the article to our PR company, and the survey was picked up by the Times on 10th December and the Guardian on 14th December - click here to view the Guardian article. But I also wanted to post the same article in a blog, so that our interims would have a chance to comment.
Were you surprised by any of the findings? Are you optimistic about 2011? I look forward to hearing your views.
There is certainly scepticism amongst our NHS interims that Lansley’s proposed changes will improve service delivery or cut costs. 76% of respondents think government plans to empower GPs to commission services will not reduce costs, when one of drivers of this initiative is to abolish PCTs and strip out layers of NHS management. However 78% think opening up the NHS to any willing provider will improve service delivery, this suggests our interims feel there is plenty of room for improvement in NHS service delivery and with the introduction of competition into the market place, standards of care should improve as NHS hospitals start competing with private providers for patient activity.
Our interims also feel that the interim management market in NHS will fare relatively well compared to other areas of the public sector. 39% felt that central Government and 36% felt local government would see the biggest falls in demand for interims and this is certainly reflected in the number of new candidate registration enquires we are receiving. There has been a marked increase in the number of local government, BSF and central government interims enquiring about opportunities, even though Interim Partners has historically not had much presence in these areas. Interims in those sectors are clearly trying to broaden the number of providers they work with in an effort to try and increase access to the fewer opportunities that are coming through, this is a trend which is not necessarily in evidence for NHS interims, 38% are working with a greater number of providers than one year ago, but 40% are working with the same number and 22% are actually working with a smaller number.
Anecdotally I have certainly been aware there is pressure on rates, 45% reported that roles they are being approached about are at rates lower than their usual expectations, this is driven by a general lack of opportunities in the marketplace but also increasing commercial awareness with clients that it is a buyer’s market. We receive quarterly updates from the Interim Manager’s Association which has management information across the interim management marketplace which comes from the 30 IMA members. The latest analysis of Q3 2010 shows an 12% drop in average day rate for interims compared to Q4 2008, this figure applies to the wider market not just public sector or NHS interims but I expect the drop would be more marked in the NHS, given the 12% decline will be dragged upwards by strongly performing areas such as financial services.
Certainly I have had three client enquiries in the last three months where a conversation about a potential requirement has turned to budget and the client has offered a budget well below market rate, or stated a strong preference to appoint on a fixed term contract.
Unsurprisingly, a significant number of interims would now consider taking a fixed term contract or permanent opportunity, suggesting that declining rates and utilisation over any given 12 month period means the income differential between interim and more substantive employment is narrowing, plus the uncertainty and anxiety of looking for interim work means the security of fixed term or permanent employment looks more attractive.
94% of interims felt confident they could transition into the private sector if they had the core skill set required, but our experience across interim partners is that it is often difficult to transition candidates from one sector to another. This is a feature of a maturing market and a growing understanding amongst clients that they can generally ask for a certain skill set and experience AND the right sector expertise, and the market is able to offer it to them.
Interestingly, 54% of our interims think 15-20B in savings can be found without affecting service delivery, suggesting NHS interims feel there is alot of fat to trim. The HSJ reported that as such as 1Bn could be saved by merging back office functions, something many feel the NHS should have looked at years ago. Respondents also recognise that system wide transformational change will be key to making savings; nearly half (49%) think organisational change will be the biggest area of demand for interims in the NHS. Interestingly, David Nicholson told delegates at the NHS Employers conference a couple of weeks ago that the proposed reforms in the NHS are the “biggest management of change exercise in the world” and those who are not ready to embrace and drive the change should go. At Interim Partners, our business is largely driven by change. There will be pockets of talent in the NHS leading the reforms, but change management capability is not in abundance, and has been and will continue to be depleted as we go through MARS and voluntary redundancy schemes as PCTs re base their management costs and acute trusts need to find year on year savings just to stand still. External support will be needed, it’s just of question of when it starts to happen and it what kind of volume.
Steve Melber is Senior Consultant, Health at Interim Partners.
The £25-35 per head of population at first seems generous, but the devil is in the detail, as the figure is for “running costs”. It is still unclear exactly what proportion of this figure is for management costs. PCT management costs in 08/09 (click here for Government source) were £1.4Bn, covering a population of circa 60M equates to £23 / head, research by the Lib Dems pre election put the figure at £28 / head, (HSJ) if we assume an average of £25 / head, and also take into account the 09/10 revised operating framework instruction that PCT management costs should not exceed 66% of 08/09 costs then should GPs be working on budgets for buying management support of roughly £16 / head of population? A consortia will arguably need 40% less in terms of heads, as they will not inherit some statutory PCT functions, key functional roles such as Finance Directors may be shared between consortia, and GPs are doing the commissioning themselves, all of which should mean there is room in the budget to buy in interim support where it might be needed.
I’d be interested to hear the thoughts of our interim community - has anyone else had similar findings when crunching the numbers? Can anyone provide additional insight into how consortia will buy in support and the expected costs will be? Will most consortia go out to tender and enter into 1-5 year contracts with providers of management support, be they ex PCT staff in social enterprises, niche consultancies or private companies? Will the market for interims be into these providers rather than directly into consortia? Your thoughts as ever are appreciated
Steve Melber is Senior Consultant, Health at Interim Partners
With Christmas fast approaching, I’m curious to hear the views of the interim community as to what is in store for 2011 – will it prove to be another tricky year, or do the manufacturing output figures, ahead of forecast for another consecutive quarter, bode a more prosperous year ahead?
The debate about Public Sector cuts in the media have subsided to an almost inaudible squeak courtesy of the weather, the Euro, and ongoing debate over tuition fees, which also leads me to ponder an earlier headline – UK Manufacturing to Collapse in 2015. Will fee increases exacerbate an already tight skills shortage that could actually presage a collapse, or will they have little if any impact? I’m interested to hear your thoughts.
I digress – the year ahead. 2010 has not been the easiest year for many interim managers I talk to, but there has been a marked improvement in recent weeks and despite low volume for the higher £750+ per day roles, there remains encouraging levels of demand at the £500-600 level. This reflects the same pattern as Q4 2009, although demand is up by 25% for the manufacturing sector. My only concern is that if this trend follows into 2011, we can expect a 37% drop in activity levels looking at statistics for this year, with no real movement until Q2.
I think we all share concern that the Eurozone could cause a fairly major headache later next year, partly because exports could be hit if the Euro crashes and Sterling loses competitiveness, but more likely because it will suck up precious credit reserves, much needed for growth.
The global economic recovery is strengthening, underscored by a glance at the Commodities index (cause for concern in its own right!), driven in the main by continuing growth and appetite for resource in the Asian economies.
Forgive the analogy, but instinct tells me that whilst next year will be more ‘The Ghost of Christmas Present’ than ‘Scrooge”, it remains in my view a pretty tough outlook for interim manufacturing specialists. I would be interested to hear your thoughts on what you expect will be the main drivers for the next year.
Finally, my thanks to all my interim managers and clients. I’ve thoroughly enjoyed working with you all this year and I look forward to building on our successes to date in 2011 and beyond.
Wishing you all a very Merry Christmas and a Happy and New Year!
Tom Legard is Head of Manufacturing at Interim Partners.
Having spent much of the last few months on the road visiting consumer businesses or people with a vested interest in retailers it struck me that there is an odd air of optimism surrounding the sector……but for different reasons.
The retailers themselves whether trading well or not have a dogged determination to trade hard in the ‘golden quarter’ and very few will be sad to see the back of 2010. What a year they’ve had with so many events having a detrimental effect on consumer confidence and trade; from volcanic ash to budgets all under the storm cloud of a recession and credit crisis. At the forefront of everyone’s mind now is Christmas trading and January sales. Projects have been shelved and it’s time to ‘sell, sell, sell’. Fortunately for the retailers, we love Christmas and the countdown has begun – every second advert on the TV is Christmas themed and it won’t be long before we hear Noddy Holder screaming ‘It’s Christmas!’ as the tills ring in the background. Oh joy!
The Private Equity players have begun to look over the trenches and ‘are shopping for retail deals’. There have been 11 private equity-backed deals in 2010 and in the peak of the buyout market in 2007 it was the largest sector for private equity interest. In the context of the uncertainty of this year, one might expect investors to shy away from sectors reliant on consumer spending but many in private equity believe this is the dawning of a new age for retail. Businesses that emerge from the recession relatively unscathed will have survived for good reason and it’s these that will be targeted in 2011.
At the other end of the market, the so-called ‘zombie’ or ‘walking dead’ businesses! I had to laugh when I heard the analogy but it makes perfect sense. It refers to the retailers out there who are so highly leveraged by debt that they are just managing to keep up on the interest payments. While interest rates are low they are surviving but their investors will not sell the debt for anything less than the full amount. The restructuring firms are getting ready as some of these businesses will inevitably fail and there will be deals to be done in buying whole businesses (or divisions) investing in the profitable bit and getting rid of the rest, providing finance / purchasing debt or looking at store closure / stock clearance programmes.
So, over the next few months I’m predicting more investment in retailers, whether it’s from the business itself or from outside parties which will mean budgets for projects and inevitable changes in management. This, finally has got to be good news for all of us in the consumer interim management community…………doesn’t it?
Jonathan Flynn is Head of Retail at Interim Partners.
Following on from the “is food too cheap” blog, I did speak to the farmer involved and let him know that his comment had received a great deal of interest online and the power of social media was responding to his thoughts, he did look a little confused by it all.
Moving on from that I’ve been talking to lots of people over the last few weeks following David Cameron’s visit to China about the opportunity for Great British food to make a greater presence in Asia and, in particular, in the Chinese market as there is a lot in the news right now regarding large retail businesses jostling for position. Were this to be the case and there are early signs that it will be, what would be the impact over here and more importantly for us, the position for the professional interim manager. Surely there must be a commercial angle to be explored on behalf of British and European food manufacturing that in the short term would offer real opportunity.
My own gut feel on this would be that Interims with experience of setting up JV’s, and those with international commercial due diligence experience need to dust off their passport and prepare to take flight. We haven’t got a mandate as yet for this experience but with the recent explosion of British brands across the board there and the westernisation of their eating and drinking culture this has to be an opportunity to explore beyond the brands with the established global presence? Clearly there’s a great deal to take into account to make this happen. It’s already happening in retail, food and non food, that much we already know.
I’d be keen to hear your thoughts as this is just a gut feel on what’s around the corner for us in food. If there is to be a move, what are the products to watch and what are the timescales. If you’ve not commented on a blog before, then jump in and get involved.
Simon Gough is a Director and Head of FMCG at Interim Partners.
It seems that there is a new case brought to the courts daily in the smartphone patent wars. A few examples – Nokia is suing Apple, Apple is suing Nokia, Apple and Motorola are suing each other, Oracle are suing Google and Spansion, Gemalto and Nokia are suing Samsung… I could go on…
I wonder if this is promoting or limiting progression/development in fear of litigation regarding existing technology.
Bear in mind today’s makers of smartphones must steer a wary course through patents which have existed for 20-30 years or more and relate to the fundamental usage of a mobile telephone or spectrum. I’ve heard it said that it’s virtually impossible to release a new device without infringing upon these early patents.
Where then does that leave us? I cannot see an end to this as every company will be keen to protect ‘their’ IP and if they generate revenue by the award of damages as a result then so be it.
Another question might be who is paying for all these lawyers fees? Will the consumer ultimately foot the bill?
As always I look forward to your thoughts.
STOP PRESS! SAP has been fined $1.3bn for admitting the downloading of millions of files from Oracle and then selling the software to Oracle’s customers in possibly the largest ever copyright infringement case.
Steve Blake is Head of Technology, Media and Telecommunications.
Demand for interim managers in the NHS was at its zenith in 2008, mainly fuelled by world class commissioning, but despite a recent contraction in the market I hold the belief that demand will return next year. It’s a truism that successive governments will continue to use the NHS as a political playground, a change of government means a change of policy and so the reorganisation proposed in Lansley’s white paper should drive demand for interim resource.
But an underlying and persistent driver of the NHS interim market is the protection afforded to the NHS’ substantive workforce. The Guardian reported a few weeks ago on how difficult it is for public sector employers to sack employees for poor performance. They cited a CIPD report which found that public sector organisations average one formal disciplinary case per 364 employees each year, compared with one disciplinary case per 119 employees among private services employers. Not only that, the average discipline case takes nearly twice as many management days to resolve in the public sector as it does in the private sector. Any organisation saddled with poor or average performers is going to struggle to drive their management capabilities and is more likely to need external support to deal with anything outside of the business as usual remit.
Not only are average performers difficult to remove, they are incentivised to stay. Those with longer tenure are more likely to hold out for statutory NHS redundancy payouts, rather than take advantage of the recent MARS scheme. And whilst average performers will stay, the good are more likely to go: the HSJ reported a couple of weeks ago on the PCT “talent drain”, as good employees start to jump ship early and secure new roles elsewhere. They quoted Dr Richard Vautrey, deputy chair of the BMA GPs’ who said “we do have concerns that senior PCT managers are leaving; the very people who we need in the future to make these changes work.” Most PCTs will see a reduction in management headcount and capabilities, and management cost reduction targets notwithstanding that should mean there is healthy demand for interim managers to assist PCTs in driving through change and continuing to perform their statutory functions through until 2013.
Your comments as ever are welcomed.
Steve Melber is Senior Consultant, Health at Interim Partners.
This week some of the broadsheets have stated that the FSA is now understood to be looking at whether board members - including Chief Executive Garvis Snook - understated the scale of ROK’s problems for the benefit of themselves and the company.
With the redundancy figure approaching 3000 my opinion is that the FSA should investigate out of respect to the unemployed workers who will be left without an income. This not withstanding it is clear that mistakes concerning governance were made and the shareholders should be aware of what caused the very sudden loss of their money.
I am interested what the Interim management community think about a potential FSA investigation at ROK, will it add any value to the Support Services Industry?
Mark Kitchen is Head of Business & Support Services at Interim Partners.
Over the last month I have seen a number of articles stating that the death of the Regional Development Agencies is going to be bad for business. I have read that the RDA’s (with huge budgets) have really made the difference and pulling the rug now could prove disastrous – especially in regional areas outside of London that may have a greater reliance on public sector jobs. How will we ever create private sector jobs in deprived areas has been the argument to keep them?
I still think of myself as an entrepreneur (in the smallest way I would like to add). I started a business; I have hired plenty of people and paid our fair share of tax. I have not at any point benefited from a grant or help from a public sector provider. It has never really occurred to me to search out such help, I always thought that you made your own luck – had a plan, worked hard and hoped that the rest will happen.
I can certainly see why grant aid, financial support and advice should be given to small to medium sized businesses. I imagine that advice on foreign markets and new legislation is especially valuable. What business or start up is going to turn down this type of help? However I am not convinced that this support is necessary via an expensive vehicle like a regional development agency.
Perhaps my view is slightly more jaundice. Take my local provider – Yorkshire Forward – soon to be no more. When I started Interim Partners I was in need of all the help I could get. They frequently used interim managers but do you think I could get them to engage with me? When I suggested I was based in Yorkshire and that they were using an interim management provider in London it held no sway – it didn’t get me in the door. I was told the PSL was not due for review for another 2 years.
I was recently at an awards dinner when the out going head of Yorkshire Forward was telling the audience of its achievements. The case study that he offered up was the support they gave for the building of a visitor centre at the Royal Horticultural Centre in Harrogate. Yes, the gardens are excellent, I am a regular and yes they are great for tourism but I don’t believe the RHS is short of a few bob. I don’t recall the Chelsea Flower show is in dire financial straits. Is this where tax payers’ money should be going and do organisations like this need the support of a public sector financed body?
I am sure that many small businesses will have benefited from the RDA’s and maybe swinging the axe is not always the answer. I am interested to see what replaces it. What ever it is, I will expect it to be fully accountable to those in the region and I don’t believe that it should pay someone 250k+ a year to run it.
I would like to hear from interim mangers their views on the RDA’s. Who out of our interim community has worked for the development agencies? What has been your experience? Has anyone benefited from their help? What is the future for businesses that need or rely on advice?
More importantly - what do we need to see in the SME sector that will act as catalysts to job creation?
Did anyone see our article in the FT at the weekend re rates in the SME sector? Click the following link to read:
http://www.interimpartners.com/in-the-news/ft-article-about-interims-in-smes-201110/
Doug Baird is Managing Director of Interim Partners.
Even though the Irish banking crisis began in 2008 it is still having major repercussions for the financial services sector. Bank of Ireland’s share price plunged 20% yesterday and Allied Irish was down 15%. The property crash that resulted in a 50 to 60% fall in house prices has left the banks with enormous bad debts and the subsequent £39 billion bailout by the Irish government has crippled the national finances, the budget deficit will be 32% of GDP this year.
Ireland has been left with no option but to ask the EU for assistance which could add up to £77bn. This uncertainly is now spilling over into the world’s financial markets and European and Asian shares are sharply down.
One thing is for sure, whether you are an interim looking for your next role or a provider looking to deliver assignments, we are all hoping for a speedy recovery to the financial services sector. So the key question is, what are the critical success factors that will lead to a recovery?
I canvassed opinion last week from Chris Plumbridge, an interim Finance Director of many years experience and his view was threefold:
- The availability of credit/liquidity. For example, in the retail mortgage sector the key constraint is the availability of funds to lend - not qualifying borrowers or properties;
- A stable and predictable regulatory regime. Understandably, in view of recent events, regulators are concerned about financial services institutions’ solvency and risk management (amongst other things). However, if the solvency regime is too stringent then it will constrain those institutions with money to lend and/or invest and slow the pace of recovery;
- Confidence. Investors - particularly retail investors - tend to invest at or near market peaks. Any sign of returning confidence and returns will attract investment out of defensive investments (For example, cash) and back into equities and other risk-based investments.
I would be very interested to hear and debate the views of interim managers within our network on what they think the critical success factors will be for the recovery of the financial services sector.
Andrew McIntee is a Director and Head of Financial Services at Interim Partners
