We often encounter clients that tell us day rates for interim managers amount to daylight robbery, but is that really the case? There are many benefits to using an interim manager, they are often less expensive than you think & the ROI they bring is invaluable.
Comparing PAYE & Interim Managers
The biggest mistake clients make is to simply take the day rate & x it by the number of working days in the year, for example 260 x £500 is made to look like an annual salary of £130k!
In fact, this is far from the truth. In simple terms day rates should be calculated like this:
1. Calculate billable days:
- Weekdays in the year = 260
- Less 25 days holiday
- Less 8 Bank holidays
- Less 5 days sickness
- Less 24 days of non-billable time between projects
- Less 10 days for marketing & business development
- Total billable days in a year = 260 – 72 = 188 working days
2. Typical overheads for professional interim managers:
- £500 software
- £1000 hardware – computers etc
- £200 affiliation costs – professional bodies such as CIPS, CILT etc
- £2500 travel costs – for interviews & visits to client sites etc
- £500 indemnity insurances
- £500 accountancy fees
- £2000 phone / office costs
- Total: £7,200 / -£38.30 per day
Interim rate per day = £500 - £38.30 = £461.70.
Over a year this equates to £86,799.60
Making a comparison then between an interim manager & a PAYE one should be done carefully. You must make sure you compare like with like: a PAYE manager’s salary is not a company’s only cost to employ. You also need to factor in employer’s NI contributions, pension, health & company car benefits, holiday pay & any bonuses, as well as training costs & sick pay.
Once all this is taken into account, a salaried manager on £65,000 pa actually costs the business upwards of £90,000 and that’s before you have taken into account recruitment consultancy fees, and the time your hiring manager takes to find the right person for the role, costs associated with on-boarding and training, let alone the loss caused by having a crucial business position unfilled (Did you know that a manager is typically worth three times their salary to a business? Meaning that if it takes three months to fill the position your business has effectively lost £48,750)
Hitting the ground running
Unlike a permanent employee who can have several months of grace while they settle in and get to know their new company & colleagues, interim managers hit the ground running, getting stuck in from day one. This is their job and why you employ them.
Interim managers can be assigned to a business in as little as 24 hours and are experienced to adapt to new environments. They are given a clear set of deliverables and a fixed timescale in which to deliver, using their specific skills to quickly fit in & get things moving. Interim managers are aware they are only as good as their last assignment, therefore successful delivery is key for them.
Experience & impartiality
Another major advantage of using an interim manager is their experience and objectivity. They won’t get side-tracked by office politics, they are not going to tell you something because they think you want to hear it, in general, they are there to tell you like it is, not to put a glossy spin on things. Their honesty could save you a fortune. Interim managers are specialists in their area with a wealth of experience from other businesses that they will use to your advantage.
We place many interim managers across our HR, Procurement, Buying, Supply Chain & Logistics specialisms and so we have first-hand experience time after time of the value they bring. In fact, we would go so far as to say that its not a case of “Can you afford an interim manager?” but, can you risk not doing so?
If you require an Interim Manager, or if you would like to chat about your recruitment needs, please contact Wayne Brophy on 0161 825 0825 / firstname.lastname@example.org or visit CastUK.com