![[Translate to English:]Production Environment at a Mechanical Engineering Company – Interim HR Management for Sustainable Personnel Cost Reduction](/fileadmin/_processed_/f/e/csm_interim-HR_Manager_Interim_Aid_69e021fb99.jpg "[Translate to English:] Personnel Cost Optimization in Mechanical Engineering Through Interim HR Management")
How can companies achieve sustainable personnel cost reductions while maintaining full production capacity? This was the challenge facing a mid-sized mechanical engineering company with approximately 400 employees. With the support of an Interim HR Manager Thomas Seidel, the company successfully realigned its collective bargaining and organizational structures within six months, reduced personnel costs by more than 20%, and strengthened the site's long-term competitiveness.
20
%
Personnel Costs Reduced
6
Month
Transformation
400
~
Employees
The mechanical engineering company, a subsidiary of an international corporation, had been under significant personnel cost pressure for several years. Although the company had already withdrawn from the employers’ association, high labor costs persisted due to its continued obligations under existing collective bargaining agreements.
At the same time, a sister company not bound by collective bargaining agreements had been established at the same location, through which all new employees were hired.
This created an increasingly challenging situation within the jointly operated business:
A two-tier workforce had emerged, negatively affecting both employee morale and collaboration.
The Challenge: Personnel costs needed to be reduced significantly without jeopardizing essential production capacity or initiating large-scale workforce reductions.
![[Translate to English:] Mechanical Engineering Company as the Operational Setting for an Interim HR Manager Focused on Personnel Cost Optimization](/fileadmin/_processed_/6/1/csm_AdobeStock_806596231_1c85471166.jpeg "[Translate to English:] Interim HR Manager: Restructuring in the Mechanical Engineering Industry")
The Interim HR Manager, who also served as Project Manager, assumed responsibility for realigning the company’s HR and workforce structures.
The objectives set by the company’s executive management and its Scandinavian parent company were clear:
A traditional restructuring approach involving extensive workforce reductions was not an option. Instead, the Interim HR Manager developed a three-phase approach designed to balance economic requirements with employee interests.
As a first step, the Interim HR Manager initiated a targeted voluntary separation program, offering severance packages to a limited group of employees.
The program was designed to provide employees who were unwilling to support the upcoming transformation with an opportunity to leave the company voluntarily. At the same time, it allowed the company to better assess employees’ actual willingness to leave.
The key finding: Although there was initial interest, only a small number of employees accepted the offer. In this economically disadvantaged region, job security was significantly more important to employees than a one-time severance payment.
This insight became an important foundation for subsequent negotiations: Preserving jobs and securing the future of the production site were shared priorities for both the company and its workforce.
In the next phase, employees covered by collective bargaining agreements were offered the opportunity to voluntarily transfer to the existing sister company, which was not bound by collective bargaining agreements.
The initial proposal included increasing the standard workweek to 40 hours and eliminating certain collectively agreed compensation components. Some of these were to be offset by performance-based compensation.
As expected, initial acceptance among employees was low.
Nevertheless, this step served an important purpose: It provided transparency regarding the company’s economic requirements and established a concrete starting point for subsequent negotiations with the works council.
The decisive breakthrough came during negotiations concerning the planned operational restructuring and the medium-term closure of the existing legal entity.
Working closely with executive management, HR leadership, and the works council, the Interim HR Manager developed a comprehensive reconciliation of interests agreement and social plan.
The focus was on a socially responsible employee transfer model:
The negotiations were complex and extended over several months. The key to success was the Interim HR Manager’s ability to consistently pursue the company’s financial objectives while developing a sustainable solution in collaboration with employee representatives.
This approach helped avoid time-consuming and costly formal conciliation proceedings.
![[Translate to English:] Interim HR Management in Mechanical Engineering: Sustainable Personnel Cost Reduction and Job Preservation](/fileadmin/_processed_/6/6/csm_AdobeStock_289057123_Kostiantyn_ecde3253b4.jpeg "[Translate to English:]Interim HR Manager: Business Value Through Restructuring")
The successful restructuring demonstrates that sustainable personnel cost optimization does not necessarily require extensive workforce reductions.
By realigning employment terms and conditions, the company significantly improved its cost structure while maintaining the production capacity needed to meet existing order volumes.
A key success factor was the combination of financial discipline, a coordinated approach aligned with labor law requirements, and constructive collaboration with the works council.
The Value of Interim Management: The Interim HR Manager brought essential negotiation experience and an independent perspective to a structural challenge that had persisted for years. As an external project leader, the Interim HR Manager was able to align different stakeholder interests, drive decision-making, and implement the agreed measures within a clearly defined timeframe.
Within six months, the company successfully transferred the vast majority of employees to the sister company not bound by collective bargaining agreements.
The structural realignment led to a sustainable improvement in the company’s cost base without compromising operational performance.
Key Project Results:
An additional financial benefit is expected in the medium term due to the workforce’s age structure: Future replacements hired under standard market conditions will further improve the company’s cost structure.
This case study demonstrates how Interim HR Management can deliver measurable financial results, even in companies with complex collective bargaining agreements and employment structures.
Rather than relying on extensive workforce reductions, the company restructured existing employment arrangements, harmonized different working time models, and established a sustainable long-term cost base.
The Result: More than 20% lower personnel costs, preservation of the vast majority of jobs, and a more competitive production site.
![[Translate to English:] Interim HR Management in Mechanical Engineering: Successful Restructuring and Sustainable Personnel Cost Reduction](/fileadmin/_processed_/f/e/csm_interim-HR_Manager_Interim_Aid_cda2d34511.jpg "[Translate to English:] Interim HR Manager: Successful Restructuring Without Significant Workforce Reductions")
Whether your company is dealing with high personnel costs, complex collective bargaining structures, or challenging negotiations with employee representatives, experienced Interim HR Managers take ownership and guide organizational change from strategy development through implementation.
How Can Companies Reduce Personnel Costs Without Cutting Jobs?
In addition to workforce reductions, companies can improve their cost structure by adjusting working time models, optimizing workforce planning, restructuring compensation systems, and reducing reliance on external staffing resources. The measures available depend on the company’s operational requirements and applicable legal framework.
When Does It Make Sense to Bring in an Interim HR Manager for a Restructuring Project?
Especially when companies need experienced leadership and negotiation expertise at short notice to implement complex organizational changes. Interim HR Managers support businesses with reorganizations, collective bargaining matters, personnel cost optimization, and negotiations with works councils.
What Role Does the Works Council Play in Corporate Restructuring?
For restructuring measures subject to employee co-determination requirements, involving the works council at an early stage is essential. A reconciliation of interests agreement and a social plan can help balance business restructuring objectives with employee interests within a legally regulated framework.
How Long Does a Personnel Cost Restructuring Process Take?
The duration depends on the company’s size, collective bargaining obligations, the complexity of negotiations, and the scope of the planned changes. In the mechanical engineering case study presented, the company successfully completed most of its organizational restructuring within six months.
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