2019 - Trends, Trials and Tribulations of the Housing Interim Market
When the autumn leaves are falling and supermarket shelves start prematurely filling with mince pies, I often reflect on the year that was. It’s been an interesting one for sure; here are my observations:
1. Not enough good compliance and H & S people to go around.
Simple supply and demand economics have hiked up rates. I’m seeing individuals who have mysteriously morphed into “compliance subject matter experts” almost overnight. Some are commanding day rates of £600+ without a sniff of a NEBOSH qualification or equivalent experience. It’s concerning on many levels. We’re having to think creatively and collaborate with our cross-sector colleagues at Interim Partners to provide solutions around risk management and compliance.
2. Property services functions continue to recycle a small number of low-quality interims.
In my black book of contacts (purple, to be accurate), I have the names of all my ‘go-to’ talent. It also contains a list of interims who I will under no circumstance put in front of a client. It pains me when I see these certain individuals popping up in new assignments, particularly if I know an organisation well. My team spends a disproportionate amount of time conducting due diligence on property services interims – but it’s worth it. We would always strive for an additional conversation where there is an agreed reference in place; and never consider an agency reference as a mark of quality (it’s often merely a confirmation of dates). Sadly, this is what many agencies do, which is the very reason why these individuals are kept in work.
3. The for-profit housing association
Wherever you stand on the ‘for-profit’ debate, they’re here and they are paying a premium for staff, thanks to their funders’ deep pockets. Their volumes are low so we’re not seeing a ‘brain drain’ from the not-for-profit housing associations thus far. However, this could be a future talent risk. That said, the keen eye of the regulator has prevented non-exec salaries escalating to rates that are even close to being competitive with the private sector, where they are competing for blue-chip talent. For-profit housing associations can’t play the altruism card to attract talent either.
4. Data is a big-ticket item.
When I see CEOs, I typically ask them what keeps them up at night? Even the deep sleepers are concerned by data integrity and governance. In a post-Grenfell and GDPR era, the increased spotlight on data has seen a big uptake of programme and project managers to work on information/data projects. This is often to build organisational change capability once a Big 4 consultancy has been engaged to undertake a strategy piece.
5. Development has moved to a more land-led/JV delivery model.
The move away from Section 106 has been wise in many cases, as many housing associations struggle to compete against private developers and the for-profit housing associations. The challenge is a skills shortage. We’ve seen dramatic rate increases, with my colleague Paul Raymond needing to fish in the likes of British Land, Berkeley, Turner & Townsend and Barratt to plug the skills gap. One good thing to come from the extension of IR35 legislation to the commercial sector in April 2020 is that it will level the playing field. There will be one less barrier to wooing private sector talent into the public sector world.
6. Two-way traffic for migration of outside sector skills
Talking more generally about a migration of private sector skills to housing, we’ve seen some high profile roles filled by outside sector individuals (Hyde’s new ex city CEO). There have also been some notable outside-sector leavers at Vivid and L&Q. We’ve observed the pendulum swinging back where exec teams have been left lacking housing experience and the requests have often been “now please find me someone with a housing background.” (My colleague, Dean Cordingley will be tacking this issue in an upcoming blog.)
7. It’s been busy.
Really really busy. The housing market hasn’t suffered from the Brexit effect like other sectors. Indeed, there has been a 70 per cent uplift of interim requirements. The level of change required in the sector isn’t going to fall, so I anticipate an even busier 2020. This makes the prospect of interim work in the housing sector seductive to individuals from outside the sector who have transferable skills.
Looking ahead, if you’d like to discuss anything related to development or construction, Paul Raymond is the consultant you should reach out to. For anything else, please speak to me or Dean Cordingley. We’re always available to share market intelligence on the sector.