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Sheltered jobs giving way to contract work at all levels
Contract workers, right up to CEOs, are in business in a downsizing world, writes MARCIA KLEIN
Ed Steins, managing director of Axis Interim Management, part of the Renwick group, says the international trend towards leaner and meaner companies has led many to fill management gaps by hiring interim managers or contract senior executives. Steins explains that these differ from management consultants in that they control and direct resources and implement ideas. They are brought into a company for a limited period of time and with a clear mandate. Often they are brought in as a project manager for a specific project or as a stand-in for an executive who goes away for a few months. Sometimes companies want to try out a manager before creating a new position and sometimes they require an industry expert to steer the company through an expansion or to bed down an acquisition. "We are finding that companies are shrinking to their core competencies and using contingent methods, like temps, outsourcing, employee leasing, consulting services and interim management to get things done," says Steins. Previously, a company's workforce was a fixed cost, but with these methods, the size of the workforce can track the company's workload. Steins says that at first, companies outsourced their "hassles", like security, and then they started outsourcing information technology as it was moving so fast. But now they are outsourcing everything which does not form part of their core competencies. International companies thinking of coming into the country often hire an interim manager to see if the business will work out or not. The Labour Relations Act makes hiring and firing time consuming and expensive, so companies are keen to hire people on a project basis. In addition to downsizing and restructuring, affirmative action has also had its effect. There is a scarcity of black people with top management experience and interim managers can be used as mentors in the development process until these people are up to speed.
Candidates are people who retired early, people who were retrenched when companies downsized, or top executives who prefer independence. Steins says that since 1990, there has been a fivefold increase in the number of US companies using interim managers and there are no fewer than 10 000 interim managers active in the UK. According to Fortune magazine, one in four Americans is now a member of the contingent workforce - people who are hired for specific purposes on a part-time basis. Fortune says that over the past two decades, Fortune 500 industrial companies have eliminated one in every four jobs they once provided. It is predicted that by 2000 half of all working Americans, about 60-million people, will provide skills or services on a freelance basis.
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