EXECUTIVE LEASING Leased to Fly: The quick-fix executive solution

They’re great for plugging skills gaps, come in wide range of capabilities, can be applied quickly and need very little priming. As skill shortages continue to tighten the talent market, leased executives are becoming the Gorilla Glue of organisational structure.
Once limited largely to the world of IT or finance, they now work across the functional spectrum from human resource management to technical, operational or sales and marketing. They are no longer just stop-gap option but valued external resource that can be mobilised rapidly to meet additional needs or new challenges, to spearhead organisational change or explore new market opportunities.
Organisations must be more flexible in today’s fast-paced marketplace and one effect of that is blurring of the distinction between contract and permanent employee.
“The line between the two has become more variable – and it’s just matter of putting the right person in the right job at the right time. The methodology is irrelevant,” says Emergent consultant director Carmen Bailey.
And general skills shortages are forcing companies to become more pragmatic about how they meet resource needs, says Executive Taskforce managing director Kevin Chappell. “They know they need one of ‘those’ and it doesn’t really matter how they get it. It is harder to define what is pure executive leasing and what is permanent because [the focus] is more around resourcing. Some executives are coming in on contracts and becoming permanent or they are going onto fixed-term arrangements. It’s different from when the line between the two [options] was more defined.”
Companies are responding to more flexible markets by becoming more flexible themselves and that, according to Hudson’s national practice manager Peter Harbidge, is one of two main factors driving growth in the executing leasing market. “More things in business are change oriented or project oriented. Companies, therefore, bring on specialist teams or extra resources to help them cope with the added workload or changes that new projects generate.”
Most senior executives are already stretched. Consequently, there’s very little capacity left to cope with added work. On the other hand, they can’t afford to let growth or useful diversification opportunities slip by. Leasing becomes an option by which to bring necessary capacity and capability on board without committing too much of the organisation’s core resources or front-loading new investment too heavily.
But the shortage of skilled individuals is putting the most pressure on the market – particularly at the mid-senior management level. “It’s probably the tightest market I’ve seen in 16 years of recruiting,” says Momentum managing director Bede Ashby. “Normally if the executive leasing market is buoyant, the permanent one is down and vice versa. At the moment there are two very buoyant markets so it’s getting hard to find people with appropriate skill sets for permanent placements and the pool of people available for contracting has also shrunk. History suggests one will outshine the other sooner or later but I can’t see that happening in the foreseeable future,” Ashby adds.
One effect of this imbalance of supply and demand is to broaden the range of companies choosing the leasing or contract option. “Clients who have never traditionally considered contractor are now doing so. It may be their only option but they are also discovering that it is good solution. It is becoming first choice solution rather than fall back option,” says Bailey.
This trend is also commentary on the high-quality of lease candidates available. They may cost more but they hit the ground running, are used to achieving more in short or fixed timeframe, and often deliver the strategic grunt and operational know-how needed at set-up stage though not necessarily for ongoing maintenance.
Contractors are often three to four levels more capable or experienced than permanent option. “It means you can bring in all sorts of experience and intellectual capacity that you probably couldn’t afford on permanent basis. It allows you to nut out particular problem and make real difference,” says Harbidge.

Who’s doing it?
As the demand for leased executives grows, so does the range of individuals choosing to work that way. Life as leased exec is more viable career option. And it’s good way to sample wide range of job flavours or corporate cultures before making permanent employment commitment.
It’s becoming harder to figure out who the real career contractors are, says Mike Matthews, executive leasing team leader at OCG. “Our rule of thumb used to be that third [of leased candidates] could be described as career contractors – they entered the market for different reasons but chose to keep working that way. Then there are the opportunistic contractors – just back from overseas or whatever and exploring options.
“There’s probably another third doing it less from choice than necessity. They can’t find the role they really want and work, somewhat reluctantly, as contractors as stopgap.”
According to Bailey, contractors tend to fall into two main groups. “There’s the young, energetic, confident individual who is still on an upward career path but has reached plateau and opted for contracting because it provides more diversity. They manage their own career which makes it more interesting.
“Then there are older executives, who perhaps choose not to take an offshore role with corporate, or make lifestyle choice to remain in New Zealand. And then there are those who have been affected by redundancies and aren’t prepared to put themselves there anymore. These days it’s commonplace to have redundancy or two on CV.”
While candidates range in age from mid-20s to mid-50s, most of Emergent’s pool of talent is probably in the 30-45 age group, says Bailey.
There’s inevitably greater range of professional contractors in functional areas. “In these areas we have more demand for contractors than we have people available to fill the roles,” says Harbidge.
But with the dearth of talent generally, recruiters are working harder to discover and partner with high-calibre candidates. “Building candidate loyalty has become very important,” says Clayton Ford executive leasing specialist Anita Dahya. It’s not simply question of placing candidate and walking away. We need to retain regular contact throughout placements, to discuss the contractor’s long-term career development needs and look at ways to add value to the relationship.
Some contractors are inevitably lost to permanent roles when they find niche they want to stay in. The transition can, however, require mind shift for those who’ve been long-term contractors. Depending on the employer the loss of independence and flexibility can become an issue.
An increasing number of talented individuals are making work-style decisions based on how they want to live their lives, says Chappell. “They may want more time with family or perhaps to pursue another business interest. Technology too, allows more choice. Instead of going blindly into permanent employment, they consider what gives them more flexibility in life.”
Flexibility is the key word for employers looking for options to explore or expand market opportunities without getting caught in the regulatory tangles of employment legislation. If the leased employment relationship doesn’t work out, the separation process is appealingly simple and much less likely to shoot disputatious holes in HR budgets.

Maintaining momentum
New Zealand Dairy Foods makes frequent calls on the executive leasing skills bank. And very successfully, according to Human Resources director Treacy Bell.
“Leasing means that you can get individuals in quickly and they hit the ground running. Executives who take on contracting roles are usually both flexible and resourceful. You get good-calibre individual with flexible attitude.”
And that’s important to company that moves at health

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