Demand for interim FDs doubles
The economic downturn coupled with the crisis in the accounting world has led to an almost doubling in the demand for interim finance directors, and other finance function staff, a new survey has found.
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Although the number of requests for interim managers has been growing almost across the board, there has been a leap in finance, meaning both assignments and enquiries for the finance function has increased two-fold while the IT and computing sector has seen a drop of 8% and 6%.
Nearly one in three of all current enquiries for interim management are requests for finance staff – a rise from just 16-17% last year.
The research is further evidence that the business world is deeply concerned about the state of financial reporting and is looking to improve, or at the very least, underpin its ability to produce reliable information for investors.
Meanwhile the actual number of assignments for finance and accounting, which includes anything from financial controller to finance director, increased by 17% in the second quarter.
Bill Penney, partner at interim management company Ashton Penney, said demand for interim managers in the finance function showed that companies are under increased pressure because of the difficulties in the economy and high profile accounting scandals.
He said the reasons for hiring interim finance function staff were varied including a need to improve the finance department and companies outgrowing their finance director.
Ashton Penney partner David Harris added companies were also feeling the pressure for expansion because of the downturn and FDs were hiring people to help them move ahead of competitors.
Interim managers, he said, were also helping in turnaround and restructuring work as boards reshaped their companies and tightened their belts during the current economic uncertainty.
But he added that despite the sudden growth experienced in the market, there are still an enormous number of companies that do not use interim managers because of the misconceptions they have about the function.
He said: ‘Companies do not realise how good these people are and the benefits of interim managers.’
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Harris added there is a perception that interim managers are there because they are not good at the job and can’t get full-time work or that if they get someone in temporarily, the interim manager will not have the interest of the company at heart.
Most interim managers are brought in to diagnose the crisis in a company but they are also used to implement the changes needed to overcome difficulties.This week saw CIMA produce a report highlighting the need for a radical change in corporate culture to produce more disclosure and, as a result, the overall transparency of companies.
The accountancy body has written to the top 1000 finance directors urging them to consider a shift from the current behaviour of satisfying short-term market expectations to providing ‘comprehensive information’ to enable ‘accurate valuations’.