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HSJ Article – Demand for off payroll interim trust executives

I was quoted in the HSJ this week (http://www.hsj.co.uk/topics/workforce/spike-in-demand-for-off-payroll-interim-trust-executives/7005064.article?blocktitle=Snews&contentID=20377) in a story that covered an increase in requests made to the TDA by trusts for permission to appoint off payroll interim executives. My contribution in the finished article was brief, and I thought I would use my blog to elaborate on my thoughts.

The article reported that there was an increase from 8 requests in 14/15 to 36 requests in 15/16 by trusts wanting to appoint off payroll interim executives. My initial reaction on hearing these figures was that it only told half the story – in two senses. There are approximately 250 provider trusts in the UK, and over the period in question, the split has been approximately 150 FTs vs 100 trusts, a 60:40 split. The increase in requests is in that 40%, i.e. with NHS trusts. I suspect that proportionately speaking the FTs have used a greater concentration of off payroll executives over the same two year period, and there are two obvious reasons for this – firstly FTs by definition are semi autonomous organisations and should have greater license to make decisions about executive resource without seeking the permission of the regulator, but I think Monitor culturally has had a more liberal, free market approach to how FTs have sourced and deployed interim executives. But even considering the 36 requests in 15/16 only applied to trusts, the number still seems low. I would estimate there are c. 200 executive level interims who routinely operate on off payroll contracts, and at any given point in time, perhaps 80-90% are deployed in roles, which suggests that as stated above the FT sector uses more exec level interims on a ratio basis than trusts, or frankly that many FTs or trusts appointed off payroll executives without seeking the permission of TDA / Monitor.

Whatever the true picture, undoubtedly one of the strongest drivers of the interim executive market is a lack of next generation leadership, and national recruitment difficulties for senior posts. Fail to recruit substantively to a post, particularly if you’ve gone out to a second advert and you’re likely to need interim cover. A contact told me this week average tenure for an NHS CEO is down to 19 months, which sounds potentially on the low side (a Kings Fund article in September 2015 suggested it is 2.5 years) but it is undoubtedly shortening. Greater pressure in the system leads to higher executive turnover, either because post holders are removed or because they leave of their own volition.

Consider national performance over the last few years: the NHS provider sector recorded a 722M surplus in 13/14, and then a 843M deficit in 14/15, and a 2.45B deficit in 15/16. National type 1 A&E performance was 93.5% in 13/14, and then declined to 90.4% in 14/15 and then to 87.9% in 15/16. It’s no wonder NHS executive roles are getting tougher, and from my vantage point as an interim recruiter that’s evident to me on a daily basis, I will frequently speak to contacts who frankly have waning ambitions to reach the top, because they have worked under 5 Chief Executives in 4 years, or because they recognise the churn rate above them. Sad though it is for the system, individuals in such a position can explore international opportunities, switch sectors, or come into interim or management consulting. The HSJ article quotes John Restell, Managers in Partnership CEO, who said: ”with financial pressures and performance issues, and the regulatory pressures, for a lot of people it’s just not worth it to stay in post or apply for jobs”. “Better money for less stress” is the comment I often hear from aspirant execs turned interims, and whether you’re running an interim recruitment business or the NHS Leadership Academy, its not hard to see their point.