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The troubleshooters

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Focus of new senior management jobs is to deal will with problems caused by recession 69 percent of new management roles expected to be for ‘trouble-shooters’. Recession means business creditors now taking a hands-on approach to senior appointments.

One-in-five senior managers expect that new management jobs created over the next year will focus on keeping companies out of financial distress, according to a survey by Interim Partners, the number one provider of interim managers to the private sector. The survey of 900 senior managers and directors found that 19 percent expected “turnaround specialists” to be the leading management role by jobs created in the next year. Turnaround specialists focus on the work needed to take a company out of financial distress, such as cutting costs and reducing debt.

The other big area of demand for new interim management roles over the next year is for “change management” experts, 31 percent of senior managers and directors polled expect this area to lead demand for new roles. Interim Partners says that their research indicates that there are noticeably low expectations over the level of demand for management staff in sales and marketing with just four percent and one percent, respectively, listing these two job categories as leading the list of new senior management roles created over the next year. Doug Baird, Managing Director of Interim Partners, comments: “A lot of businesses are still working through a backlog of improvement projects stemming from the last recession even as a double-dip threatens. Some of those are standard “change management” programmes whilst others involve the radical surgery of a corporate turnaround.”

“Businesses expect far more of these senior management roles to be created in the area of change management and turnaround than they do in dealing with business as usual or in trying to grow.” “That is not great news for all the talented marketing and sales directors that are looking for new opportunities but it does suggest that those who specialise in taking businesses out of distress will continue to be able to get a premium for their services.” Says Doug Baird: “The impact of low demand and low confidence in the economy in the last recession meant that many businesses did not want to take on the overhead of permanent senior managers and directors for sales or marketing roles, so they make the appointment on an interim basis instead.”

More senior managers appointed by lenders and private equity backers. Interim Partners says that another major change in the senior management recruitment market since the recession has been the active role in appointments taken by lenders to the business. Eight percent of interims said that a business’s bank or other lender would be the key decision maker in the appointment of interims in the year ahead, while 16 percent said it would be the company’s private equity backer.

Simon Gough, Director of Private Equity at Interim Partners, says: “A lot of interims are now not appointed directly by the business they go into, but by its lender or private equity backers.” “Private equity investors have always been very heavily involved in making boardroom changes when they invest in a company. They are also very comfortable stepping in to make changes to senior management if a business fails to meet its plans.”

“It was only in the recession that banks started to follow the lead of private equity houses and become much more proactive stakeholders in demanding approval over board level appointments, particularly after exchanging their debt for an equity stake in the business.”

“When a bank swaps debt for equity they rightly feel that they should participate as active and involved shareholders. That includes advising their investee company on where to beef-up management and boardroom resources. It is something distressed businesses have had to get used to.” Simon Gough adds: “Even when a business is not so troubled that the bank actually has had to swap debt for equity the bank will be looking to assert more influence on board appointments where they feel the board is lacking the right skills.”

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