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fourth
  How Independent Type A's
Thrive as Executive Temps

 
 
 

John Alich of Carmel, Calif., was brought in as president of a 50-plus-year-old company in the Toronto area in April 2002. His duties have included hiring and training other executives there, including a vice president of marketing.

Yet you won't see Mr. Alich's name on the Toronto company's payroll. It never hired him. Instead, it contracted for his services with Executive Interim Management (EIM), a multinational firm that describes itself as "a company that runs companies."

Mr. Alich is among a small but growing group of executives employed by staffing firms.  Staffing-industry payrolls have grown more than eightfold since 1991 for temporary professionals, including accountants, attorneys, sales and marketing pros and managers, reports the American Staffing Association in Alexandria, Va.

Interim executives are also known as executive temps or, sometimes, consultants. But Mr. Alich doesn't liken himself to a typical consultant. "Consultants write a report or make recommendations and leave," he says. "I'm signing every check and actually running the company, as opposed to telling someone how to run it."

Why Hire a Temp?

Companies looking to restructure or make major changes sometimes find that outsiders can get things done better than insiders. "I bring objectivity and have no vested interest in saving my job," says Mr. Alich, who previously served as president of a different company going through a restructuring.

"Our clients are most interested in bringing in an interim executive if they have a crisis situation or a special project," says Paul Dinte, chief executive of Dinte Resources Inc. of McLean, Va., which does interim placements and retained search. "Their preference is someone who rolls up his sleeves as though he were doing it full time, as opposed to a consultant."

Corporate scandals of 2002 have made finance and accounting a growth area for executive temps, says Shel Hart, vice president of Spherion Corp.'s Professional Recruiting Group in Boca Raton, Fla. He credits the Sarbanes-Oxley Act of 2002, which provides for new internal audit procedures and stipulates that accounting firms can't consult for their external audit clients. The latter provision makes it harder to find experienced people, Mr. Hart explains.

Robert Half Management Resources, a division of Robert Half International Inc. of Menlo Park, Calif., which also places temporary financial executives, has seen greater demand in the wake of Sarbanes-Oxley, says the division's executive director Paul McDonald. "As corporations get tighter on permanent staffing, they're looking to get the same amount of work done," he says, "so they're utilizing our staff to fill peak project workload requirements."

Pros for Small Companies

Some clients are too small to be able to afford an experienced senior financial executive, Mr. McDonald says. "They want to gain knowledge in a certain arena," he explains, "but they don't want to hire an executive full time. They bring in someone to work on a project for four to six months, to train their staff and share knowledge."

Vern Illingworth of Louisville, who was a " financial troubleshooter" in his corporate life, now works in large part through Robert Half. "I'm flexible," he says. "If the client wants a report [to] implement, I can do that. If the client wants me to handle day-to-day activities, I can do that. I can be a temporary [chief financial officer] with one client, be a part-time adviser with another, and do reports for a third."

For some clients, Mr. Illingworth returns periodically to do follow-up work, such as analyzing subsequent reports, or to make sure his solutions have succeeded. "When I go into a situation that's going to require a significant amount of day-to-day face time, I make certain those clients understand that I have [such] other commitments. Generally, if you discuss that up front, it's not a problem."

The second-largest growth area for temps is general management, Mr. Hart says. Venture capitalists who want to turn companies around quickly before selling them typically hire temp executives for this purpose. But in the past three to four years, Mr. Hart reports, more corporate employers are using executive-temporary services. Typical engagements last six or seven months, he says.

Filling the Pipeline

Executives who need more money for retirement and those who want flexible lifestyles often seek work as temps, says Joseph Daniel McCool, editor-in-chief of Executive Recruiter News of Peterborough, N.H. He notes that many executive-search firms have started temp divisions to take advantage of the trend.

"We've seen a 40% increase in candidates since the beginning of the current recession in March 2001," says Mr. Hart. Of those, 30% have lifestyle issues -- down from 60% before the recession. And 30% are postponing retirement and temping due to shrinking portfolios. Before the recession, only 5% of candidates fit this category. A constant 40% seek permanent employment but "want to dance with the employer before signing on the dotted line," he says, adding that about one-fifth of engagements become permanent -- including 80% of those that started as temp-to-hire.

Mr. McDonald says his candidates divide into two categories. The first consists of people who have been laid off, where "we fulfill their interim needs." The second has chosen consulting as a career. Of the latter category, he says, "They like working for us because we give them variety and challenge. They have more control over their work schedules. They get a change of scene two or three times a year. They're always learning new things."

Mr. Dinte estimates that about 40% of temporaries are hired permanently. "They can look at a company from the inside and do 'due diligence' without any competition," he says. Temping is a better way for both parties to screen each other than the typical hiring "courting process," where employees sign on after meeting three or four times. That's "like meeting in a bar and deciding to get married," he says.

Flexibility Is Key

Jess Atwell of Midland, Mich., recently returned from a two-year Spherion assignment in Argentina with an exporter. Mr. Atwell, who normally goes in to companies as a chief executive officer or chief operating officer, has been working through Spherion and its predecessor, IMCOR, for several years. "I didn't set out to have this as a career, but it turns out I'm suited to it," he says. "I'm adaptable and goal-oriented, and I don't like the corporate political problems that usually come up in permanent jobs."

Assignments can be unpredictable. Roberta Maneker of New York City left a position as senior vice president of marketing and corporate communications at a leading auction house after nearly eight years, she says, "because I was tired." Executive Interim Management placed her in an interim position as marketing director of another auction house. "I bought in to a three-month assignment," she says. She remained for another year while a new CEO settled in and the company's parent spun it off. Still, she feels the assignment was a perfect fit. "It was interesting, energizing and extraordinarily challenging -- for a defined period of time."

Nicole Geller, a Booz Allen alumna, founded GCS Inc. of McLean, Va., six years ago to provide high-level executives for government contractors. "We tend to draw people who have retired or just want a change," she says. "People who have been running a department decide they don't need to do that any more and consulting is the way to go."

Often executive temps don't want -- or need -- to work full time, she says. "When you bring in a senior resource, you may not need it for a 40-hour workweek. If they work nine to three and they're good, they can figure out what needs to be done." Some executives want to take breaks between four- or five-month stints. "One person loved to go hunting and fishing so we worked around that," she says.

Staffing firms advise would-be temps to find more than one source for assignments. "The market is such that no one of us will have enough to keep everybody busy, so we encourage people to use as many resources as they can," says Kris Swanson, managing partner of Chicago-based Flex Execs Management solutions, which does placements in human resources, finance, sales and marketing, and operations. Many interim executives find that they have to keep networking, often to locate their own jobs. They'll usually contract for them through an agency to avoid pay hassles.

Hidden Costs

Pay rates generally compare favorably with full-time equivalents and temps usually go on a staffing firm's payroll. "The [Internal Revenue Service] doesn't like 1099s," which are pay statements independent contractors receive, says Mr. Dinte. The staffing industry has grown from companies' reluctance to hire people that they may lay off later, coupled with IRS restrictions on the use of independent contractors. When temps are put on the staffing companies' payrolls, objections go away. Some staffing firms offer paid vacations, health insurance and other benefits, although they rarely compare favorably with corporate perks.

For this reason, "you have to go in at a high enough level so you can pay for the perks you used to take for granted," Mr. Illingworth says. He points to medical insurance, Social Security contributions, life insurance and 401(k) plans as items that may have to be replaced. Then there are costs of doing business, including travel and home-office expenses. "You need better computer equipment, higher-speed Internet connections, additional software, and maybe more training because you have to maintain it yourself. You have to pay for your own printer cartridges; and if all of a sudden the software has a fatal error, you have to pay someone to fix it or fix it yourself," he says.

Sometimes, lengthy stays at distant locations are required, but clients typically pay for living expenses and frequent trips home for faraway temps. "I've moved enough times that my wife and I concluded we'd locate ourselves somewhere, and I'd travel to jobs," says Mr. Alich, who rents an apartment and a car when he's away from home for a long time. "I've never had a job where I wasn't traveling half the time anyway."

-- Ms. Mende is a free-lance writer in Waltham, Mass., who specializes in career issues.

Email your comments to cjeditor@dowjones.com.


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