Turnover at a medium-sized company in the electrical industry had slumped by more than 60 percent. As Head of Human Resources, the HR interim manager was tasked with reducing the workforce of the company (350 employees), which had already been weakened by several waves of redundancies, by a further 170 full-time equivalents. In doing so, the company wanted to create the conditions for a strategic turnaround - towards becoming a provider in higher-value product areas.
The management attached great importance to retaining top performers. In addition, external costs for restructuring concepts or redundancy costs were to be avoided. It was also important to overcome the resistance of managers and the works council to the staff cuts. All of this was to be worked out in a process of appreciation in order to avoid further straining the working atmosphere. In particular, the management of the Human Resources team with four employees was of great importance.
Staff reduction through reconciliation of interests with a list of names
The appropriate means under employment law quickly became clear: reconciliation of interests with a list of names. As the list of names could not be "bought" by the works council with high severance payments, it was necessary to find another way to convince the employees. The interim manager's overall concept was based on the fundamental idea of organizational development and maximum participation of all those involved. It comprised the following core elements:
- Activation of internal know-how about the organization
- Transfer of co-responsibility in the process to managers and the works council
- Continuous high density of communication as an expression of transparency and appreciation for the cooperation and co-design of the new direction.
The implementation of the overall concept included the following main packages of measures:
- Participation analysis and development and management of a project plan for implementation, including the development of all work packages and the implementation of the new direction. the development of all work packages and process planning (development and legal review of the reconciliation of interests and social plan, presentation and ongoing revision together with experts provided by the works council, conducting negotiations, drafting documents, etc.).
- Process reviews and development of the restructuring concept by the interim manager, together with the management team and management in discussions and meetings.
Integration management developed and absenteeism reduced
In the accompanying analyses of absenteeism, the salary structure and the works agreements, the interim manager identified further need for action. She developed a company integration management system as the basis for discussions with managers and employees. As a result, absenteeism in the production area fell to less than 3 percent for the first time.
Analysis of the salary structure and employment law conditions revealed that a collective solution was not possible within the necessary timeframe. The interim manager therefore developed a system based on an across-the-board salary reduction of up to 25 percent and voluntary, individual agreements. Around 40 percent of the existing works agreements were terminated by the end of the project.
Founding a transfer company and communicative support
On the recommendation of the interim manager, the company also decided to found a transfer company. The state funding for the redundant employees made it possible to cushion the shortfall of the lack of severance pay. At the same time, the foundation protected the company from cost-intensive dismissal protection lawsuits.
In order to ensure that as many of the employees affected by the staff reduction as possible signed the termination agreement to transfer to the transfer company, the interim manager designed a communication mix. This mix included targeted information at a works meeting and departmental meetings. In addition, the managers and HR employees in particular held many personal discussions. The works council, the operators of the transfer company and an external pension consultant were also on hand to support the employees. In this way, it was possible to satisfy individual information needs on the one hand and express appreciation for the employees on the other.
Transfer company and salary reduction save the company
After months of intensive cooperation, with the introduction of short-time working, the planned insolvency, integration of an external insolvency consultancy and due diligence for potential investors, a reconciliation of interests with a list of names, social plan and works agreement on the establishment of a transfer company was concluded with the works council. Within one week of the kick-off works meeting, 96% of all affected employees had voluntarily signed the offer to transfer to a transfer company. 94 percent of the remaining employees signed the agreement on individual salary reductions.
After 12 months, the company was saved at its core: it was bought by a new investor, a competitor in the market.
