Interim management: Internationalisation of companies drives demand for company relocations

The demand for interim managers to oversee projects involving relocating operations abroad is growing rapidly.

Interim managers are typically brought in for restructuring and innovation projects, or to fill temporary leadership gaps until permanent managers are hired.

"Helping companies move out of Germany is currently the fastest-growing segment in interim management," says Dr. Harald Schönfeld, Managing Director of Butterflymanager, a personnel consulting firm.

He points to two main reasons for this trend: high energy costs in Germany and the need to strengthen supply chain resilience. "Electricity in Germany is about three times more expensive than in some other EU countries. Moving operations a few hundred kilometers east can bring significant economic benefits," explains Schönfeld, referring to calculations companies consider when hiring interim managers.

Unpredictable Energy Policies, Wage Levels, and EU Regulations

He adds, "Besides costs, the unpredictability of German energy policies is prompting business leaders to reconsider Germany as a production base. Many interim management mandates aim to compare Germany with other EU countries, as well as in Asia, South and North America, to guide future location decisions. This includes not just energy costs, but also wage levels and increasingly strict EU regulations."

Fragility of Global Supply Chains

According to the interim management expert, another critical factor is the vulnerability of international supply chains. The CEO of Butterflymanager explains, "Given the ongoing challenges in global logistics chains post-COVID-19, more companies are prioritizing production closer to their major consumer bases, across continents and countries."

The diversification of supply chains and localizing production are becoming key strategies for many companies seeking interim managers. Schönfeld elaborates, "In addition to costs, manufacturing firms are increasingly focused on ensuring supply chain resilience. While international just-in-time production processes cut costs, recent crises—from the Suez Canal blockage to the Middle East conflict and uncertainties over Taiwan's future—have raised concerns about disruptions in raw material supplies."

De-Risking Strategies Are in Demand

Schönfeld, CEO of Butterflymanager, points out that about one-third of all imports from China to Germany consist of intermediate goods essential to the German industry, including electronics, machinery, chemicals, textiles, and metals. "The EU Commission's longstanding de-risking strategy towards China hasn't resonated in Germany," analyzes the intermediary for interim managers. Accordingly, there is high demand for temporary executives who can assist companies with tailored de-risking strategies.

The relocation of operations abroad is increasing steadily.