See the latest issue of Briefings at newsstands or read in our new format here.
By: Russell Pearlman
Things were getting desperate last year for the sprawling hospital system. Their CFO had just left, and a search for a suitable full-time replacement would likely take six months or more. But the healthcare company couldn’t wait that long—their financial-reporting system was a mess and the organization was leaking profits.
A week after the old CFO’s departure, the firm found a replacement—someone who a generation ago would have been called a “temp.” This interim executive said she would do anything the company needed done, but had no intention of staying longer than a year. She set about updating the firm’s reporting systems and plugging up the profit leaks. Twelve months later, she cleaned out her office so the newly found permanent CFO could take it over. Within a week, she’d started another 12-month assignment to clean up a similar situation.
It’s back: The so-called “gig” or “temp” economy has returned with a vengeance—and, more importantly, with a curious new twist. In the past, contract or temp employees were generally viewed in one of two ways: as workers who couldn’t find a full-time job, or as people doing a side hustle while pursuing another, often low-paying, career. Temping wasn’t something the sort of person who’s worked in a C-suite would do. But that stigma is gone, as an increasing number of people worldwide now consider themselves “independent” workers, unwilling to be tied down to any organization for very long. And their numbers are astounding: In the US alone, one survey found that an estimated 58 million workers considered themselves independent. That’s an estimated 36 percent of the entire US workforce. These workers run the gamut, from food delivery people to highly skilled computer programmers to—increasingly—seasoned corporate executives.
(click image below to enlarge)
This shift, experts say, represents one of the biggest changes in the makeup of the workforce in decades. And it’s one that hasn’t gone unnoticed in corporate hallways. In one recent survey of C-suite executives worldwide, 60 percent predict that the number of interim workers in their companies will substantially increase within the next three years. These firms are currently loading up on temp talent because they find themselves short of skills and traits internally, potentially leaving business growth on the table. At the same time, the uncertain global economy is conducive to hiring employees whose tenure won’t be longer than a year or two. “Given the economic uncertainty, a permanent hire may feel like too much of a significant commitment and cost,” says Ben Wolf, author of Fractional Leadership: Landing Executive Talent You Thought Was Out of Reach.
These interim employees are almost the polar opposite of the highly engaged long-career-track employees many organizations have been trying to attract and retain. Experts say it could be a challenge for many leaders to balance the needs of the careerists with those of the interim employees. Compensation may be an issue too: Without benefits, many short-timers may demand higher pay, which in turn could create wage gaps with colleagues who haven’t job hopped.
The interim workforce isn’t going away. Millions of highly-skilled baby boomers have decided to keep a toe in the workforce and take on challenging temporary assignments. But it’s the millennials who are driving the trend. Older millennials (those born in the early 1980s) were the first to latch onto the gig concept in a big way, rejecting the lifelong, one-firm careers their parents had. On average, they’ve already switched jobs nearly eight (7.8, to be exact) times, according to the US Bureau of Labor Statistics, despite the fact that they are only in midcareer.
That propensity to keep moving on can make today’s breed of independent workers disruptive on many levels. At the same time, organizations need them. The more seasoned the interim worker, the more organizations are likely to want their immediate help in increasing both revenues and innovations. “Urgency really is the only common factor among companies that want interim executives,” says Mike Harris, CEO of Patina Solutions, an arm of Korn Ferry which specializes in finding and placing executives on temporary assignments.