DUBAI // Uncertain how deep and how long the global economic slowdown will be, businesses are deciding whether to hire interim managers or spend the time and money to bring in more top administrators. The sharp downturn has resulted in substantial cuts in the expatriate workforce. That has opened doors for firms such as Manager Forces, based in Düsseldorf, which has opened the region's first interim-management services firm.
"It may happen that an interim manager is needed to do a turnaround project in a company which has downsized staff," says Andreas Hoeptner, the company's group chief executive. "But interim managers have to be seen as experts in their field... capable to develop and implement strategies to handle the current economic situation." Typically, Manager Forces places candidates for senior managerial positions, all the way up to executive board level. The firm has made about 30 placements in its first month. It hopes to have 100 contracts in place by the end of this year.
Ali Sharab, the founder of Foursan Al Hayah, a high-end management consultancy, agrees that hiring temporary executives might be good for managing a crisis, but wonders if they will be as accountable as permanent hires. "Such temporary solutions will not serve business in the long run," he says. The key issue, consultants such as Dr Sharab say, is that the recession demands steady hands at the top. These executives must be held accountable for a long-term business strategy whether it results in success or failure. He says a manager's loyalty to a company is directly related to its success.
Top positions, such as chief executive or chief financial officer, usually are filled for a period between two years to five years in mature markets. But in the Gulf, such managers would be more likely to be hired for shorter-term projects. Short-term hiring enhances efficiency, but doesn't necessarily cut costs, Mr Hoeptner says. "The cost is not the main driver for hiring an interim manager," he says. "The daily rate of an interim manager is his basic salary, maybe higher than a comparable basic salary for permanent employment, but the employer will save on the perks such as housing, car, school, club membership, leave entitlement."
Dr Sharab says firms could avoid being in this position if they had spent the time and money to groom future top executives from lower management at the company. Jack Montgomery, an executive search consultant in Dubai, says companies should use the slower business climate to examine which key employees might make effective managers. "Be it retail or luxury sectors, we have to remember the 'pent-up demand factor' will kick in sooner or later, probably not on a major scale, [but] this factor will come into play in the second half of this year," he says. "The firms that have not been careful enough in staff retention will feel the pinch then."
He also questions whether hiring middle to senior managers on a temporary basis will be successful in the Gulf. Such firms have a strong track record in western markets. "It is an established industry in the West, but the concept is new here. At least the firms will be saving repatriation and perks for senior managers if they need to hire on a temporary basis." email@example.com