Executive Space

Is your small business at risk due to rising costs?

According to recent data published by CEPYME, small companies (between 10 and 49 employees) are facing a challenging situation: labor costs increased by 4% in 2024, exceeding the general price increase (CPI of 2.8%). This limits their ability to compete, grow, and attract talent.

Why do small businesses have more difficulties than large ones?

This context highlights two distinct business realities. While large companies grew by 6.5% in employment last year, small ones barely reached 3.2%. This is because:

• They have less capacity to absorb costs and negotiate conditions with suppliers.
• They struggle to access specialized talent.
• Adapting to regulatory or market changes is slower.
  
  

The interim management market in Spain continues to grow, although it is still far from the consolidation seen in countries such as the United Kingdom, France, Germany, or the Netherlands. A relevant fact is that only 20% of interim management assignments are intermediated by specialized companies, known as service providers, while the majority are managed directly with freelance professionals within trusted contact networks.

While directly hiring an interim manager may seem faster or cheaper in the short term, the reality is that turning to a specialized interim management provider offers strategic advantages that optimize investment and minimize risks. We explain why.

 

The mergers and acquisitions (M&A) market in Spain continues to rise, recording a 40% growth in 2024. Factors such as lower interest rates, increased private equity investment, and digitalization have fueled this trend. With a favorable financing environment, companies have greater opportunities to expand through strategic acquisitions, while sectors such as technology, energy, retail, and healthcare lead the volume of transactions.

However, success in M&A is not just about the acquisition itself but also about effective integration. This is where interim management becomes a key lever for business transition and consolidation, ensuring that operations deliver the expected value.

In Spain, the aging workforce is no longer a projection—it’s a reality. Recent studies reveal that by 2030, over 40% of the working-age population will be over 50 years old. This demographic shift presents unique challenges for the labor market: while accumulated experience becomes increasingly valuable, adapting to a fast-evolving technological landscape is now essential.

As 2024 comes to a close, businesses are looking ahead to 2025 with new challenges on the horizon. Interim management is emerging as a key solution to tackle these challenges effectively. Why should your company consider hiring temporary executives or interim managers next year? Here are 10 essential reasons:

Rapid growth is a critical stage in the life of any SME, bringing with it new challenges, particularly in talent management. Securing major contracts, entering new markets, or developing strategic projects require an internal structure aligned with expansion needs. In this context, the HR department becomes a fundamental pillar, but how can you manage it without incurring high costs while maintaining the flexibility that today’s environment demands?

The recent report from the Regional Observatory of BBVA Research has shed light on the economic outlook that Spain's autonomous communities will face in 2025. With an upward revision of the GDP, Spain is on track for solid growth, although not without challenges. In this context, companies must be prepared to seize growth opportunities and adapt to the new economic realities of each region.

Spain has seen a significant increase in the number of insolvency proceedings and dissolutions during the first half of 2024, particularly among small companies. Factors such as rising interest rates, difficulties in repaying ICO loans taken out during the pandemic, and reduced profit margins have pushed many businesses into complex financial situations. In this context, companies facing insolvency proceedings or restructuring needs are finding Interim Management to be an effective and strategic solution for tackling these challenges.

Imagine this: your CFO has just announced his early retirement to go grow grapes in France. Or perhaps your company has just acquired another company and is navigating the turbulent waters of integration. In situations like these, where uncertainty feels thicker than a double espresso, interim management is not only useful, it's your corporate lifeline.