Interim Manager vs Permanent Employee: How the Costs Compare

Many people assume that an interim manager is going to be more expensive than a permanent employee.  However, a closer look at the figures may suggest otherwise.

  • More than salary –  a permanent employee for a senior level role isn’t just paid a salary. They also potentially gain pension benefits, car allowances, medical insurance and other perks.
  • Holiday pay – a permanent employee will receive paid holiday, an interim won’t. Allowing for bank holidays there may well be at least 28 days or more a year when you’ll be paying a permanent employee but they won’t be working. If an interim isn’t working you don’t pay them!
  • Sick pay – permanent employees often qualify for sick pay. Interim’s don’t.
  • National insurance – employer’s national insurance, at around 13.8% of salary, is another significant cost to add on a permanent hire.
  • Adding it up – just allowing for these additions, an executive on £100,000 actually costs more like £175,000
  • Relocation costs – when a permanent executive joins a firm, if they have to move, their package may include covering relocation costs.  An interim, in contrast, is used to living out of a suitcase and going wherever the next assignment takes them.
  • Bonus – senior employees often have some element of performance-related pay in their package. This may take the form of share options or a bonus. Normally, this will amount to around 20-25% of salary. In the interim management market bonuses are not normally expected. What’s expected is that the interim will deliver brilliantly for the day rate you’ve agreed; that’s what they’re there for.
  • Exit costs – if a senior permanent employee isn’t delivering or your business circumstances change it will take some time to exit them from your organisation. They may have a three months’ or more notice period.  During which time you will be incurring the cost of their salary but most likely they will be doing very little. In contrast, interims are typically on just a month’s notice. 

Looking for an interim manager?  Send us your brief now.

"We worked closely with Rex at NJR on a new and key, senior management position. He did a great job of turning round a strong short list in a tight time-frame, as well as quickly adapting to changing requirements. Rex was easy to contact and responsive throughout the process and I would definitely recommend working with NJR based on this experience. "

Maria Woodhams, HR Manager Toyota Financial Services (UK) plc

"NJR has supported IMI Critical Engineering with a number of senior interim roles spanning various locations across Europe and the UK."

NJR, Interim Management Experts
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"Rex at NJR did a fantastic job of turning round a comprehensive short list in a very tight time-frame, quickly sourcing a range of highly relevant and suitable candidates. They were also extremely responsive, helping to manage a smooth and efficient process; I would definitely recommend working with them based on my experience."

Sarah Thompson, VP Finance, HR and Operations International LeapFrog Toys
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"NJR are an outstanding company to work with since they understand the need to deliver high quality people but also at speed and with unrivalled client service. What's more NJR have outstanding people who not only understand recruitment but who have fulfilled senior executive roles in all their key sectors on a global basis. So they can instantly understand a client's needs and its culture and use this to source top quality candidates who will be effective on a long term basis."

Rene Schuster, Former Group COO Veon and CEO Telefonica Germany

"Insurethebox is a market leader which needs to react with speed and agility to maintain its market position. To support this Insurethebox requires our business partners to be able to respond promptly with expertise, skill and well-rounded solutions. Rex at NJR has consistently met the brief set, and has delivered."

Andy Haynes, Joint Chief Executive InsureTheBox
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"Rex provided Diageo with a cost-effective, punctual and targeted approach which got the right result!"

Kevin Fairburn, Head of HR Western Europe Functions Diageo

"Rex comes highly recommended. Undertaking what proved challenging posts to fill, Rex got to grips with culture and fit very quickly. Very professional and an easy approach to work with. Most importantly Rex delivered on all of his assignments."

Justin Thomas, Managing Director Bon Bon Buddies Ltd

"Rex played a key role in running a successful talent pool campaign to identify, evaluate and appoint a number of senior finance roles at Legal & General. The assignment brief was challenging: timescales for delivery were tight and we had set a high quality bar for candidates' technical, as well as commercial skills standards. The brief was executed well and involved the delivery of rigorous assessment days. The days not only resulted in the selection of high quality recruits but also turned out to be a very effective and efficient use of the Legal & General senior management teams time."

Lee Dobson, Finance Director, Wealth Division (at time of project) Legal & General
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"Norrie’s firm always provides top quality candidates, often at short notice, in a very professional and client-focussed manner. He is a pleasure to work with."

Chris Rickard, Group Finance Director The Weir Group

"Rex is a hugely talented, proactive individual who takes time to understand his client's needs and provides a first class service."

Atul Sharma, Finance Director GSK Export

"Norrie is a consummate professional and a pleasure to do business with. He is affable, diligent and dependable. He operates well across sectors and brings a wealth of experience to any work situation. I recommend him without hesitation."

Alan McCarthy-Wyper, Director Balfour Beatty Rail

"Rex has assisted me as Group Head of Internal Audit at G4S Plc to place 3 senior roles during a 6 month period. Rex is a reliable Executive Recruiter who identified good quality candidates and made sure that they met the candidate profile before sending in their CVs."

Phil Summerton, Group Head of Internal Audit G4S Plc

"Rex assisted SEGA with recruitment campaigns. I found him to be honest, professional and helpful at all times. It was great dealing with him."

Ben Harrison, Head of HR SEGA Europe

"Norrie has always been very responsive and on two occasions has provided a very rapid and professional service to identify high-quality leaders for Westinghouse. He must have a huge network as he always manages to provide a short-list in a matter of days, of very high quality. I will continue to use Norrie for difficult positions when I need to move fast and guarantee quality."

Colin Brown, Engineering and Safety Director Invensys Rail

"Rex has worked on 2 commissions I have been involved with. On both occasions he has managed and conducted thorough searches with a particular diligence. This combined with highly developed levels of perception, an acute awareness and great people skills has led to being presented with proper runners for the top level posts involved. I wouldn't hesitate to recommend him and will use his services again."

James Sprint, Group CEO Alternative Flooring and Wilton Carpet Factory

"I just wanted to say thank you for your input, support and advice during our first interim appointment. The advice pre-Christmas was excellent, your first candidate was spot-on and of course, we are excited now at having our interim join our team. You've helped to make this process very straight-forward and uncomplicated and I will have no hesitation in recommending your services to others in the future. Thanks again."

Mark Wynn, Managing Director Avonline Plc

"We have used NJR on more than one occasion and have been impressed by their ability to find excellent candidates both quickly and cost-effectively. We particularly like the fact that throughout the process we have the personal attention of one of NJR's Directors who knows and understands our business and it's culture."

Mark Cockburn, Managing Director Cambridge Economic Policy Associates

"NJR's SME service took the brief quickly and provided the experience, calibre and personality of candidates we were looking for."

Catherine Senda, Managing Director Curtin&Co
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"NJR have been outstanding. They truly went the extra mile to assemble a shortlist at short notice, working weekends to interview candidates speedily and arrange meetings on a Sunday. The resultant shortlist was of exceptional quality, any one of the five would have been appointable into the role. I would use NJR again without hesitation."

Stuart Brocklehurst, Chief Executive Applegate Marketplace Ltd