In some cases, dismissals cannot be avoided. To save time and avoid stress, an external specialist can be hired to do the job.
The situation
A large wholesaler that comprehensively marketed textiles and non-food products to retailers found itself struggling with a decrease in revenue and income due to a sales structure which was not meeting market requirements. Two years later, the company was experiencing a sales drop of 22 per cent. At the same time, administrative costs as well as structural and logistical costs remained constant and clearly disproportionate, the company having six logistics facilities and 400 full-time employees. The company’s equity, which had once been comfortably high, was now decreasing due to substantial losses. This was becoming an existential threat. A restructuring concept was established in cooperation with HANSE Consulting. It provided a wide range of measures to improve performance in sales, marketing, advertising, procurement, incoming goods, warehousing, order picking, shipping, adminstration and headquarters. With dismissals amounting to more than 35 per cent, a seasoned Interim CPO with an extensive knowledge of social and labor law had to be hired.
HANSE Interim found a suitable candidate who had previously gained experience in critical situations like the one at hand.
The challenge for the Interim CPO
The interim manager was able to evaluate the overall situation of the company objectively and took on the unpopular task of carrying out the dismissals.
He quickly made important decisions. The uncertainty of the situation of employment over a months-long period had led to the employees being demotivated and being absent from work more often and, eventually, it had also led to a decrease in productivity.
The interim manager made sure that decisions were not postponed. This made the severity of the crisis clear to all parties involved and it showed them that it had to be overcome as quickly as possible.
Another important milestone was to foster trust-based relationships with employees. The company clearly and openly communicated with its employees and conducted individual meetings. From these, the external manager was able to gain important information concerning internal aspects.
The manager had planned the dismissals precisely and applied a project-based approach. He was thus able to avoid potentially high costs.
His responsibilities included:
- providing a well-founded justification for the dismissals
- reviewing the contractual situation of all employees
- creating a set of selection criteria and conducting the selection based on social aspects
- respecting the co-determination of the works council, informing the works council and facilitating a consultation of it as well as negotiating a reconciliation of interests and a social plan with the works council
The interim manager continued to be responsible for:
- the negotiation of a collective agreement for the period of the restructuring process
- notifying the Bundesagentur für Arbeit (Federal Employment Agency) of any mass dismissal
- contacting welfare offices and offices of labour protection
- issuing dismissals with the option of altered conditions of employment and dismissals
- concluding termination agreements
- transfer short-time work
The result achieved by the Interim CPO
The interim manager achieved decreasing the number of employees by about 40 per cent and lowering overall costs on balance by two million euros.
The success of the dismissal process was highly dependent on the interim manager. He helped in avoiding mistakes and speeding up the process.
Conclusion
An experienced Interim CPO can employ a structurally sound approach when it comes to dismissals and thus save a valuable amount of time and money. The interim manager is responsible for the unpopular and highly demanding task of handling dismissals. This enables internal management to remain active within the company.
