We’ve all experienced it particularly with the Covid-19 pandemic – it would appear that the entire complexion of the workforce has changed.
I have worked in the private equity and venture capital business for the past thirty-five years – my sub-title to this little piece is “everything old is new again” – well we’ve all heard of “contact workers” in the jobs we’ve been in.
Rise in gigs economy
In the healthcare industry, it is very common for hospitals to call in temporary or contract workers to make calls on behalf of the hospital to try to collect copayments, deductible payments and other charges for which the patient is responsible but the insurance companies have failed to pay – these collection efforts usually last the for a two week or a defined timeline.
They are not permanent positions – they are “project” positions where people are called in on an hourly basis to perform a set of tasks for a defined period of time – fast forward 20 years and everyone has heard about the ‘gig economy”.
The term “gig” comes from the music industry where musicians would take a “gig” playing for a night or a week or a defined period of time – well we have morphed into a “gig” economy where many jobs or gigs make up a worker’s income.
Workers and employers usually find each other through technology. Gig workers are independent contractors not employees of their employer. We have seen an increase in the use of gig workers in small businesses over the past 5 years where you can hire someone to do your marketing, to do your email and social media postings for you.
Gig workers and people looking for gig workers usually turn to some sort of a technology platform which matches sellers of services with buyers of services.
In the private equity and venture capital business gig workers aren’t that common but we definitely have “operating partners” who may have specific skills and are placed in an investment company on a temporary basis to provide specific skills and guidance on a temporary basis.
They may be employees of the capital management firm or they may be brought in on a contract basis for a period of time to fulfill a specific need – we are seeing the use of “interim” employees being used more frequently in the strategy of firms of all sizes for their human-capital management strategy.
Interim employees offer the highest level of executive and professional talent to tackle crisis situations and they can deliver key projects to deadlines and achieve business transformation results.
They strengthen in-house teams through their difficult to find skills and unique business experience to keep projects and business moving forward – In this brief article I’ll examine why interim employees are becoming mainstream strategy for many businesses which are presented with growth challenges and performance gaps.
Most organizations perform some sort of strategic planning on an annual basis at a minimum where they examine their organizational structure and look for gaps in performance and gaps in talent necessary to close that performance gap.
By employing interim resources, you can build an agile hybrid workforce for your organization with a greater depth of expertise than you could build with an in-house only team and you can build it in record time.
Plus, I have personally seen that the truly seasoned experts really gravitate to the opportunity to leverage their skillsets from a variety of work experiences and challenges they can obtain through interim work rather than by being a full-time employee.
True experts like to see more “wins” in their track record and interim work provides the opportunity to secure more “wins” with their project work as interim employees.
Interim employees are ideal candidates for working across organizational boundaries and succeeding in a ‘matrix environment’ across divisions and geographic locations.
I particularly see interim employees succeeding in the solutions as information technology skills are in short supply and high demand – The gaps in digital and IT teams can be covered by technology outsourcing.
I have sold outsourcing services for 25 years. However, outsourcing can be an expensive option for a client and a company may need the cutting-edge skills to deliver quality improvement projects to get the client ready for outsourcing and interim employees can be an ideal resource for those stop-gap and preparatory projects.
Engaging an interim who has been through an outsourcing transformation can be a significant boost for an organization considering such a move. Critical skills can be acquired on an as-needed basis with relative speed using interim employees.
One client I worked with was in the process of divesting a division of their business and their CIO took Ill and was unable to work on the disintegration of the divisional information technology assets and work on the integration team to assist in integrating that division into its new platform.
The client hired an interim CIO to manage the project, a CIO who had significant M&A and divestiture experience particularly in untangling and divesting of information technology assets and data from common internal systems to unique new systems of the owning/acquiring company
‘Try before you buy’
I am seeing more and more what I term “project to position” where an interim resource is hired on to work a specific project under contract and then that person is asked to stay on as a permanent employee.
One of my clients calls that the ‘try before you buy strategy’ where they get to try the skills and the cultural fit of the interim before they make the interim a permanent position offer as a permanent employee.
So in general we’re seeing critical issues, specific expertise and short timeline projects and initiatives as the drivers of using Interim employees in established business organizations. Interestingly, the interim employee position is attractive to a more mature expert who is looking for a variety of work and the ability to leverage their expertise.
Among more projects as being more attractive than taking on a full time position as they near retirement. Similarly, interim positions appeal to younger employees who are mobile and frankly bored easily and are looking for as much exposure in as short of a period of time as possible.
I have a younger friend who took an interim position with a service provider to Google and he was able to leverage his skills and his exposure to the executives at Google to take on a full time position with Google.
So everything old is new again — from contract or temporary workers to the gig workers to the interim employees of today and the future – we’re seeing Interim seeping into the human capital strategy of organizations of every size – Interim is no longer just a stop-gap but a strategy to achieve the goals and objectives of the organization.
In the VC and PE world, many times expert Interim employees will take equity in the company instead of taking a cash salary.
This helps out the business which may be cash strapped and it provides a direct alignment of the incentives for the Interim to assist the company to grow and increase in value because the cash that they have foregone can be worth more to them at some future point than taking the cash today.
Interim employees must be cognizant of the fact that most interim employment doesn’t come with any benefits afforded to permanent employees like paid vacation, healthcare benefits and retirement or savings individual retirement or savings plans.
Plus, as an interim or “gig” worker you will have to assure that you can pay the taxes you will owe on income.
Benefits and other costs associated with permanent employees are also why we’re seeing Interim employment becoming mainstream and not just a stop-gap for special projects or tight timeline or lost or specific skills sets through retirement, illness or death.
As you consider and examine your human capital strategy in your strategic planning don’t forget to consider Interim as a strategic tool in your human capital arsenal and not just a stop-gap.