Executive Leasing : Till Retirement Us Do Part. or Not - the Rising Popularity of Contractors; Experienced Executives Are Increasingly Shunning the Security of Permanent Positions in Favour of Short-Term Contract Positions. Why Is This Happening - and Is It Good for Management?

New Zealand Management, September 2007 | Go to article overview

Executive Leasing : Till Retirement Us Do Part. or Not - the Rising Popularity of Contractors; Experienced Executives Are Increasingly Shunning the Security of Permanent Positions in Favour of Short-Term Contract Positions. Why Is This Happening - and Is It Good for Management?


Byline: Vikki Bland

Suzanne Kendrick is an experienced HR and talent management executive with two young children and no interest in a full-time position. Instead, she has accepted a four-month contract with technology firm Fronde - it's her job to develop a talent management centre for the company, and then move on.

"The lifestyle benefit of contracting appeals, as does the ability to work in a short burst then stop. I suit full-on project type work where I can work really hard, focus, and get results for organisations," says Kendrick.

According to recruitment specialists, Kendrick is in good company. Marc Burrage, executive general manager for Hudson New Zealand, says Hudson's business is presently a 50/50 mix of permanent and contract placements, and executive contracting (also called executive leasing) accounts for around a third of all business.

"Accounting executive contracting is up; so are sales and marketing, supply chain, and procurement positions. There is steady demand in the ICT sector for executive contracting and a thriving public sector demand for it," says Burrage.

Executive leasing can be an affordable option, particularly for small and medium sized businesses that can 'project block' work and budget the cost of the executive into a customer contract. Executive leasing also delivers the flexibility to respond to sudden customer demands when an employer may not have 100 percent security or confidence in where the business will go over the next six to 12 months, says Burrage.

Vicki Kelly, executive consultant for Drake Contracting, says executive leasing is also a growing area for Drake, currently generating around 30 percent of business. She says leased executives are a "fresh set of eyes" for employers who may be looking for a new perspective and a proactive response from an employer with a specific need, opposed to the reactive response of hiring a non-executive contractor to simply fill a gap.

"Executive contractors can take on roles with responsibility; for example they may be the sole company accountant for a time. It is a part of the market that is coming to its fore and that has a huge amount of potential for companies and customers," says Kelly.

Ian Taylor, executive director for Sheffield, says executive leasing appeals to employers because they can hire specific skills to address specific projects or challenges, which is often more cost effective than training up an internal placement to deliver the same outcomes.

"Executive leasing has grown enormously in other markets including the US and the UK and in countries where smaller businesses are on the rise and have a need to be nimble around business delivery and direction," he says.

However Taylor says a widespread talent shortage is also driving executive leasing in New Zealand with some organisations using executive leasing as a 'stop gap' measure until the right person for a permanent position is identified. He says the challenge is to achieve the right balance of permanent and leased staff to address the needs of a business at the right time and price.

Meagan Alexander, a division director for finance sector recruiter Robert Half, says about one fifth of Robert Half contractors are leased executives, commonly CFOs and project and change managers, and most want the variety and challenge of consecutive roles rather than the daily grind of permanent employment.

"[Executive] contracting is being accepted whereas before employers used to ask 'why are these people contracting; what's wrong with them?' Leased executives can seem expensive, but the value they add often has long-term effects; they set a pathway so that the business can then bring in a more junior permanent employee to take over," says Alexander.

Elizabeth Amery, general manager for executive leasing specialist Emergent, says Emergent and sister company QuickSearch source leased executives at the $100 per hour-plus end of the market, equating to salary levels of $200,000 or more. …

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Executive Leasing : Till Retirement Us Do Part. or Not - the Rising Popularity of Contractors; Experienced Executives Are Increasingly Shunning the Security of Permanent Positions in Favour of Short-Term Contract Positions. Why Is This Happening - and Is It Good for Management?
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