Tactics, methodology, psychology and negotiation skills are in demand, sound knowledge of labor law is indispensable – a task for true specialists! Our Interim Project Manager Human Resources is the right person for this!
The Situation
The company develops, produces and sells welding machines with 220 employees. A wide range of customers is covered. In terms of product range, the company is well positioned in the market and has pronounced strengths such as flexibility and technological quality. However, recent years have been characterized by unsatisfactory results. The management expected weak sales and a loss of several million euros for the current year. Our sister company HANSE Consulting conducted a SWOT analysis and found as one of the results too high personnel costs. For this reason and due to further deficits in commercial management, HANSE Consulting initiated a restructuring. However, in order to achieve a positive continuation prognosis, 45 jobs had to be cut. HANSE Interim, as a sister company of HANSE Consulting, assigned the interim expert Rüdiger Viebrans as external interim project manager Human Resources with the planning and implementation of the potentials found during the restructuring in the area of human resources.
The task for our Interim Manager Human Resources
He reports: The reduction of 45 jobs with a workforce of only 220 employees and the reduction of the severance budget of 1.0 million euros, which had already been mentioned to the works council, required many individual measures as well as pronounced tact.
First, it was enormously important to convince the workforce of the need for staff reductions in order to save the company and restore its competitiveness. This was a difficult task, given the discrepancy that outsiders perceived between the employee view (“Who is going to do the work?”) and the employer view (“Necessary restoration of competitiveness as an alternative to site closure”).
Discussion rounds were held with managers, employees and works council members. Managers had to be motivated to develop personnel-reducing processes and organizational changes. One of the greatest challenges was to convince the members of the works council and the IG Metall negotiator of the need for the above-mentioned personnel reductions. The argument of capacity adjustment before site closure was decisive.
The task was quickly clear: to work out planning scenarios to avoid compulsory redundancies and, at the same time, to reduce the workforce. Of course, this had to be done without causing dissatisfaction among the workforce, an exodus of skilled workers and top performers, or labor court proceedings.
The Solution by our Interim Project Manager Human Resources
The first step in implementing the staff reduction was a so-called volunteer program originating from the IG-Metall world. Even though IG-Metall initially rejected the program, it was later agreed that employee resignation requests would first be assessed and that active employee approaches would only be carried out by the employer if the number of resignations was insufficient. Knowing full well that IG-Metall’s acceptance meant that the biggest negotiating hurdle had been overcome, the employees’ and employers’ wishes still had to be reconciled.
After many nerve-racking days of negotiations, the agreement included the following points:
- collective solution without “blackmail
- no transfer agency
- no sprinter bonusses
- extension of the collective agreement on pay rises by one year
- no cancellation of vacation and Christmas bonuses for remaining employees
- different severance factors
- everything subject to approval by IG Metall members
- prompt drafting of the agreements by the IG-Metall lawyer
The next step was the formal drafting of the necessary contract documents and the rapid organizational implementation. This included, among other things, the following building blocks:
- a social plan
- a reconciliation of interests
- a social collective agreement and
- a discussion guideline as a framework for the volunteer program.
- The whole process was carried out under enormous time pressure – the period from the start of the project to the delivery of the termination letters was only three months.
The result – achieved by the Interim Project Manager Human Resources. The project mandate – reduction of jobs – was achieved and even the calculated restructuring costs were significantly undercut. The departmental structures and processes were revised in parallel and the reduction of staff was implemented as far as possible. The company is fully competitive again.
Conclusion
Even in the most difficult process in the area of reorganization or restructuring – staff reductions – an agreement is reached with the necessary tact. Particularly pleasing and a great success for the interim manager: At a general meeting, the workforce, works council and union accepted the necessity of the measures!
