Interim HR directors in high demand for industries in transition
The competition for talent isn’t just confined to the long-term, permanent workforce and C-suite — there is a surging market for interim executives, notably HR leaders.
Heidrick & Struggles, a business management consultancy, revealed in its “Fortune 1000 CHRO Trends” report a 225% jump in interim CHRO positions this year vs. last, underscoring a marked shift in how companies are working to satisfy their leadership vacancies. (Elsewhere in organizations, interim CFO appointments are also up by triple digits, whereas the number of interim CIOs has declined.)
“We’re seeing strong demand for interim CHROs, particularly when companies are scaling their HR functions, undergoing major changes like cultural transformations, or dealing with mergers and acquisitions,” said Sunny Ackerman, global managing partner of on-demand talent at Heidrick & Struggles. The duration of interim assignments can range from a few months to a year, depending on the company and the complexity of the assignment, she adds.
The sudden departure of a leader is a shock to any organization, especially when that individual oversees people functions. As Ackerman notes, “HR has moved beyond administrative tasks to become central in engaging and retaining talent.”
The high stakes of maintaining effective HR operations during a leadership void have made interim roles a crucial stopgap solution for many companies, one of their appealing aspects being flexibility. That flexibility enables companies to address their immediate needs without committing to a permanent hire.
As Ackerman pointed out, interim executives can be cost-effective for businesses, particularly smaller ones.
If the interim is a contract worker, the company would be off the hook when it comes to providing benefits and paying payroll taxes, said Eric Mochnacz, operations director of the HR consultancy Red Clover, which offers interim HR leadership as part of its services.
With the job market hungry for experienced HR leaders, companies seeking an interim are in a prime spot, according to Mochnacz. “There’s a ton of talented people on the market who may not want a permanent, long-term commitment,” he said.
But while bringing on an interim CHRO may have its upside, it is not without its potential challenges. A quick change in HR leadership can rock an organization, as that department’s functions are so closely tied to the employee experience, Mochnacz explained. “Any type of change can be disruptive for a business, and as HR tends to be people-facing, frequent change in the HR function can be even more disruptive,” he said.
Another risk is that interim leaders may not have the time to implement sustainable changes in an organization, potentially leading to knowledge gaps when they leave. Additionally, organizations must deal with perceptions of interim leaders among the rank and file.
According to Ackerman, the success of an interim often hinges on solid executive support and a clear definition of the role. “When there’s strong support from the C-suite, interim leaders are typically integrated quickly and valued for their fresh perspectives and unbiased approach,” she said.
The demand for interim HR execs varies by industry, with the technology, healthcare and food and beverage sectors experiencing the greatest need right now, according to the Heidrick & Struggles report. Those happen to be industries that are undergoing major transformation, further necessitating the need for deep HR expertise.
As for the best way to determine the right candidate for an interim HR director, an employer should be upfront in the job posting and in its interaction with candidates. It should also be mindful of the differences between a contractor and an employee, which will impact the company’s working relationship with the interim and expectations of them, Mochnacz said.
Beyond that, a company should be prepared to develop behavioral interview questions for candidates, he added. That way, it can determine if and how they managed short-term projects, what they delivered in a compressed time frame — and crucially, how they left things better than they found them.
“One of the benefits of the interim is the ability to come in and isolate where the opportunity is and where they can have impact pretty quickly,” said Ackerman.