The UKs economy grew over Q3 2017 contributing to a decent period of hire for senior interim finance candidates. Systems and new technology once again proved the driving force in hiring finance leaders to provide interim support.
Q3 turned out to be a diverse market for our Interim Solutions team with our widest span of assignments being recruited for over this period to date. Technology and systems improvements, particularly around reporting proved a huge driver for hiring interim's; whether this was back-filling permanent leavers or heading up projects. In fact 19% or our mandates were systems and project related and 33% were head of finance/financial controller level. In our last quarterly update we discussed technology and the investment into more efficient and robust financial outputs, which hasn’t dimmed this quarter. Once again, the need for greater clarity of financial information to improve company performance has been the driving force.
As backed up by numbers published by the ONS, the services sector was the strongest in terms of the delivery of interim assignments over the course of the quarter for Morgan McKinley. Business services accounted for a large proportion of the assignments that were worked on, as well as organisations that deliver "fixed price long term contracts" into private and public sectors. There was also a need to hire experienced financial expertise to help review contracts and improve business efficiency.
Whilst growth over Q3 was higher than Q2 at 0.4% and 0.3% respectively, there was a still a flavor of caution in the air as Brexit talks continued to weigh in the minds of business leaders. This was reflected in the reduction in technical finance roles placed as these roles are perceived to be more of luxury hire as they don’t, at first glance, have a direct impact on the sales performance of the business.
Retail and FMCG saw 33% of the recruitment delivered across our Interim Solutions team which makes for an interesting review, as inflation has risen with households seeing no growth relatively speaking in terms of income. Whilst investigating this information further, what was interesting to note is that there wasn’t one particular theme that had driven this volume of recruitment, many roles were maternity related, aligned with cost reductions or to replace leavers.
The quarter saw rates remain relatively static within the Interim Solutions team which is a continuation of the theme that 2017 has taken since the beginning of the year. As quoted by Ben Brettall in The Independent "the underlying problem is a familiar one: productivity. Output per hour of labour is no higher today than before the 2008 financial crisis."
This lack of productivity has contributed to the lack of wage increase and this is something that we have directly seen in the interim market. The positive flip of this coin is that unlike the previous quarter we have seen an increase in roles from £800 per day with over 25% of mandates being recruited for over this level.
As we drive on towards the end of the year it would be logical to assume interest rates will rise, once again Ben Brettel was cited in The Independent as saying "Today’s numbers seem to have increased the likelihood of an interest rate rise next week, with sterling gaining almost half a cent against the dollar." I don’t anticipate that this will have an immediate impact on the finance interim market but uncertainty is not good for companies to invest in senior hires. However, as proven by the findings in reviewing this quarter, uncertainty does bring on a need for change in business and that requires experienced interim's to help deliver that piece of work. I anticipate there will be more projects on the horizon that will increase hiring in this area. The caveat I will make is that the market is still competitive and with some businesses focusing on cost reductions at a senior level, this also increases the pool of people perceived to be available and on the market.
I don’t think there will be a huge volume from harder industries such as construction as capex spend appears to be reducing; The ICEAWs Business Consumer Confidence predicts that capex spending will reduce by 1.1% in 2018. So it seems logical to predict that again that the services industry will deliver most of the mandates in Q4 of 2017. Equiteq the advisory firm to the corporate finance world noted that the management consulting segment experienced the strongest M&A activity during Q3, both of which sit in the wider services industry.All of these things combined will prove good for interim hires within finance but the market will continue to be competitive.