Robust Investment Niche Emerges As Interim Recruiting Gains Traction

Companies are turning to interim leadership more frequently as they struggle to fill widening gaps in their senior-level ranks. That is creating an opportunistic investment niche within the human capital sector. Cody Crook, managing director of Hunt Scanlon Ventures, takes a closer look at how the current talent landscape has shifted and what that means for savvy investors.

For at least a decade, organizations have increasingly recognized the value of integrating highly skilled on-demand talent – independent consultants, executives, project managers, and subject matter experts – into their workforce. 

“With some 72 million American workers (43% of the American labor force) and countless other professionals worldwide choosing to work independently on a project-by-project basis or in interim leadership engagements, businesses have been slowly shifting their hiring models to accommodate these workers,” said Cody Crook, managing director of Hunt Scanlon Ventures.

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Demand for interim financial leadership, in particular, skyrocketed last year, he said. According to the 2024 High End Independent Talent Report by Business Talent Group (BTG), a Heidrick & Struggles company, requests for interim CFOs have jumped by 46 percent. That makes Heidrick’s acquisition of the company three years ago a prescient move. 

Accelerating Scale

“BTG pioneered the high-end independent talent marketplace,” said Mr. Crook. “The acquisition established Heidrick & Struggles as a market leader in on-demand executive and project-based talent hiring,” he noted. Mr. Crook said the acquisition was also consistent with Heidrick’s long-term growth initiative to expand its leadership solutions and capabilities to address new and ongoing client imperatives.

Related: Answering the Growing Call for Interim Executive Talent

“Seismic workplace changes and shifting demographics collided after the pandemic struck in 2020,” said Mr. Crook. “Those dynamics have accelerated discussions around the future of work and underscored the importance of agile leaders and leaner workforces,” he noted. 

A year after Heidrick’s plunge into the space, Korn Ferry acquired Patina Solutions Group in April 2022, bringing it substantial interim executive solutions expertise across multiple industry verticals spanning functional areas of expertise including finance, operations, legal, human resources, and IT, among others. “The move greatly accelerated the scale and capabilities of Korn Ferry’s then-current interim executive solutions business,” said Mr. Crook.

“Seismic workplace changes and shifting demographics collided after the pandemic struck in 2020. Those dynamics have accelerated discussions around the future of work and underscored the importance of agile leaders and leaner workforces.”

That same month, ZRG Partners acquired RoseRyan, a Silicon Valley-based provider of finance and accounting consulting solutions. The move expanded ZRG’s tailored advisory, interim, and on-demand offerings. 

Big Uptick in Activity

As that integration was competed, ZRG acquired The Registry 16 months later, significantly expanding ZRG’s business in the interim space. Hunt Scanlon Ventures served as a strategic advisor to both companies during that transaction. 

Related: Interim Leaders: Proven Experts at a Time of Crisis

“We have seen a big uptick in buy-side requests from strategics and investors seeking a toehold in the on-demand and interim solutions recruiting space,” said Mr. Crook. 

“The current talent landscape has fundamentally shifted now and we believe that growing tailwinds demographically and otherwise will only make the space more desirable from an investment perspective,” he said.

“On-demand talent is being embraced more and more as a core workforce strategy and that makes it a new and opportunistic investment niche within the human capital management sector to watch,” he noted.

Related: Inside The Rapidly Growing High-End Independent Talent Economy

Article By

Cody Crook

Cody Crook

Managing Director, Hunt Scanlon Ventures

Cody Crook is managing director and head of investment strategy at Hunt Scanlon Ventures - an M&A advisory firm that specializes in the human capital space. Cody is responsible for co-managing the firm's investment portfolio, which includes executive search, talent acquisition, private equity, and investment firms. Leading the investment team, he spearheads all fund transactions and maintains portfolio developments. He is also responsible for sourcing, managing and monitoring investments and working with external portfolio managers, analysts and investors on active and prospective transactions. Connect with Cody.

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