Industry leaders predict recovery as political stability returns and transformation demands surge, despite ongoing IR35 headwinds

The interim management sector is emerging from one of its most challenging periods in recent memory, with industry veterans reporting the first signs of recovery after a year marked by political uncertainty, legislative changes, and fierce competition for scarce opportunities.

According to a comprehensive market assessment by the Institute of Interim Management (IIM), the sector has endured a prolonged downturn characterised by extended gaps between assignments and heightened selectivity from employers. However, emerging trends in artificial intelligence implementation, supply chain restructuring, and fractional leadership models are creating new avenues for growth.

Market Reality Check

"The interim market has been quite tough over the past 12 months," acknowledges Matthew Whipp, Senior Director of Technology Leadership Practice at BIE Executive, an IIM affiliate. "There are opportunities out there, but there is a lot of competition for these roles and interims are often waiting much longer between assignments than they may have had to a few years ago."

The challenges have been compounded by multiple factors including the UK's 2024 election cycle, ongoing complications from IR35 off-payroll working legislation, and the increasing use of AI-powered recruitment systems that have commoditised the application process.

Phey Rasulian, an IIM member, described a fundamental shift in market dynamics: "I've noticed a significant shift in the gap between interim engagements. It used to be back-to-back or you were able to choose how often you'd like to work. Nowadays they seem to be few and far between."

IIM Board Member Diane Ward painted an even starker picture, comparing current conditions to pre-pandemic levels: "If I look at what the interim market looked like in early 2020 compared to now, I would say it's a completely different landscape. Business confidence has not fully bounced back since COVID."

Corporate Caution Drives Consultant Preference

The market turbulence has led many organisations to favour established consulting firms over individual interim managers, according to industry observers. However, this trend may be creating its own opportunities.

"We have seen a lot of faith being placed in the larger consulting firms, however, we are hearing time and time again that this approach is failing, and it is an expensive failure," Whipp noted. "Businesses are increasingly pushing towards using highly skilled interim managers to co-ordinate, execute and deliver transformation."

The shift reflects broader corporate risk aversion in an uncertain economic environment, with many organisations postponing major transformation programmes due to budgetary constraints and regulatory uncertainty.

AI and Trade Wars Signal Recovery

Despite current headwinds, industry leaders are identifying several catalysts for market recovery in 2025. Chief among these is the accelerating adoption of artificial intelligence across sectors, which is expected to drive demand for transformation specialists.

"AI provides an opportunity for projects and with it brings interim opportunities," predicted Rasulian. "Once organisations know exactly what they need to achieve and how to achieve it and the maturity of AI improves I think this will lead to a lot of projects."

Separately, potential trade policy changes in the United States could trigger a wave of supply chain restructuring projects. Tony O'Donnell, an IIM Board Member, suggested that organisations facing new tariff regimes "may have to look at their manufacturing or supply chains and start to bring things back into their home country. This could create a big opportunity for interim leaders with experience in this space."

Fractional Leadership Gains Traction

The market is also witnessing growing interest in fractional leadership models, where senior executives provide part-time expertise rather than full-time interim roles. This trend reflects both corporate cost consciousness and the evolving preferences of experienced professionals.

"There's a noticeable rise in interest around fractional leadership – where organisations tap into senior expertise on a part-time or project basis," Whipp observed.

Kevin Briggs, another IIM Board Member, highlighted additional opportunities in distressed situations: "With a flatlining economy, some businesses may find it harder to survive. Interims are a fantastic source of support for businesses finding themselves in that position."

Sector-Specific Opportunities Emerge

The public sector is expected to provide particular opportunities in 2025, driven by mandated local government restructuring in England. Andrew Grant, an IIM member, noted: "A big change in 2025 in the public sector is that local government in England is changing because counties and districts are being mandated to merge. This might bring opportunities like happens with mergers and acquisitions in the private sector."

Private equity activity is also expected to sustain demand for interim expertise, with Briggs noting that "private equity investors remain an important part of the economy and whilst they acquire to restructure to build value, interims are always going to be an important resource."

Survival Guide for New Entrants

Industry veterans stress that entering the interim market requires significant preparation and financial resilience. Ian Watkins, an IIM member, outlined four critical factors for success: comfort with uncertainty, preparation for unbilled periods, financial resilience of at least 12 months' reserves, and strong professional credentials.

"My advice to people is to take it as a profession as opposed to a filler," emphasised O'Donnell. "Have it as part of your career plan and take the steps in your career to prepare yourself for interim work."

Networking remains paramount to success, with multiple experts emphasising the importance of maintaining visibility and professional relationships. "The work I've got has all been through my personal network," confirmed Debra Hesse, an IIM member.

Political Stability as Market Driver

Looking ahead, industry leaders are counting on political stability to restore business confidence. Dr Stephen McCormac, an IIM member, expressed hope for "more political stability in the UK. With no election for the next four years and hopefully no more increased taxation on businesses within this parliament, which will hopefully give businesses more certainty so they can start to invest more."

The assessment suggests that while the interim management market faces continued near-term challenges, structural changes in technology adoption, supply chain management, and organisational design are creating new opportunities for experienced professionals willing to adapt their approach and maintain financial resilience during the transition period.

Source: "What the future holds for the interim market," Institute of Interim Management, 2025. Primary research conducted by Matthew Whipp, BIE Executive, with contributions from IIM Board Members and members.