Should Interims charge for overtime?
August 24th 2023 | Posted by Phil Scott
One of the hot topics among interim managers is often around rates. Lately, online forums and blogs have raised the question on whether interims should charge overtime. The usual approach, of course, is to charge a day rate. But critics argue that this doesn’t sufficiently compensate interims for extra work taken on.
So what do you need to consider when positioning yourself and your rates as an interim manager?
Setting your rate
There’s a lot of advice around setting your interim rates in the first place. Anyone starting out in this field should spend time researching the market as a priority. Rates should be based on experience, skillset, and they need to be in line with your chosen target market.
You also need to take into account the benefits permanent employees receive, like pensions, private health insurance or company cars. This all needs to be balanced with your business expenses and a realistic figure of what you need to live.
Now all this is well and good, but as the discussions in recent online forums will tell you, it’s not a fool-proof way of setting your rate. The fact is, you may take up an assignment with a transparent rate in place and despite best intentions, a change of circumstances could mean that you’re working longer days to get the project completed on time.
Why you should stick to a day rate
There’s a very good reason why the industry uses day rates. It’s a clear and comparable way of negotiating costs. We’ve discussed the idea of creating bonuses for interims in previous posts and an hourly rate poses similar problems.
Not only does it make employers feel uncertain of what the end cost for your services will be, it also increases admin and it can put interims on edge as they concentrate on counting up the hours rather than focusing on the task in hand.
Communication is key
There’s a very simple solution to most of these issues. Make sure you and the hiring company know exactly what’s expected before you start the assignment. This requires a bit of legwork and an honest conversation about the objectives. If you feel that expectations are unrealistic, flag it from the beginning.
As we’ve said, occasionally there is no avoiding situations that could derail your plans. But for the most part, a close look at the KPIs outlined and clear communication throughout, will ensure that you and the hiring company have realistic expectations on the amount of work involved and the length of time needed to complete it.