subject: How Much Does It Cost To Recruit Talent In China? What Methods Are Available? [print this page] Is it expensive to hire an Interim Manager?
Over the last few months, IMS has been approached by many companies in search of a solution that only we can offer Interim Management in China. However, a select few of these companies had the belief that an Interim Manager was expensive. After all, Interim Managers are recognised experts available immediately, and are capable of great things in such a short space of time. We were surprised. We always thought that an Interim Manager was clearly great value for money and has great ROI. Still, we thought it would be a good idea to compare the cost of an Interim Manager to other alternative solutions.
Interim Managers Vs Full-time employees; which is more economical?
It may seem too good to be true; however, Interim Managers enjoy what they do. They like to work on a project basis; turning companies around for the better, then moving on. The common misconception of Interim Managers is that they are more expensive then hiring a full-time employee. This is not true. The below calculation illustrates the average costs involved in employing a full-time employee, here it is:
Year 1
100% of employees base salary
+ 20-30% In first year: Recruiter fees
+ 10-20% In first year: Induction, training & Learning curve
+ 25-40% for full expat package (if applicable)
Employees cost on average 155-190% of their base salary.
Year X
100% of employees base salary
+ 10-15% In intermediate years: Training, management and holidays.
Employees cost on average 110-115% of their base salary.
Final year of employment
100% of employees base salary+ 10-25% In final year: Notice, handover and productivity loss costs
+ 0-100% In final year: Depending on exit method, legal and other exit costs
Employees cost on average 110-225% of base salary.
*calculation does not include equipment, expenses, software and facilities costs.
As you can see from the above calculation, full-time employees cost much more than just their base salary. One of the main benefits of an Interim Manager is that they are provided at a one of monthly fee. This includes of the necessary fees and expenses to make a simple outsourced solution. Also, one of the main points to consider is that an Interim Manager also does not require holidays. The most noticeable figure in the calculation is the total cost for the first year of employment. In all levels of recruitment, the first year of employment is the most expensive for the employer. As the majority of our assignments last less than 12 months, we provide higher caliber candidates for around the same cost as a full-time candidate with less experience. So whilst a full-time employee may seem cheaper at the outset, this is not always the case.
Interim Managers Vs Management Consultants; which is more cost effective?
As we all know, Management Consulting can be a very effective method if used correctly. However, Management Consultants take on a purely advisory role. They do not make decisions which directly affect everyone involved in the business. They also do not have a strong presence within the company. Interim Managers, on the other hand, parachute into different situations within companies and start to make positive changes as soon as they arrive. This approach can be seen as much more effective. Another difference between Interim Managers and Management Consultants is price. The average cost of a Management Consultant is around 80-150% more expensive than an Interim Manager. For the same talent and same level of experience this seems to be a little too expensive.
So who is the most expensive?
To conclude, Interim Management is not as expensive as people may think. Sure, their rates may seem a little higher at the outset. However, the ROI is more than any other method of outsourcing. When all other costs are considered, Interim Management is the more economically viable option currently available on the market.
For more information on the value and cost of Interim Managers, send us an email.
