HR-Glossar
Interim Management (management on a temporary mandate)
When interim management makes sense, how it differs from consultancy and agency work, and what the status question requires.
1. What is Interim Management (management on a temporary mandate)?
Interim management is the temporary assumption of a management or specialist function by an external person. They do not act in an advisory capacity but responsibly: with authority to decide, accountability for results and, where the role provides for it, leadership.
The typical occasions are narrowly drawn:
- Bridging a vacancy – a key position is unfilled and replacing it takes time. - Absence – illness, parental leave, a sudden departure. - A project or special situation – introducing a system, restructuring, building a site, integration after an acquisition. - A temporary capability gap – a task requires experience the business does not have and does not permanently need.
In law the status question is the decisive one. Interim managers mostly work on a self-employed basis under a service or works contract. But where the person is integrated into the organisation and directed like the business's own staff, classification as dependent employment within the meaning of Section 7(1) SGB IV threatens – with claims for contributions. That can be settled in advance through the status determination procedure under Section 7a SGB IV. How the engagement is arranged is therefore no formality – and in a matrix organisation, integrating an external person into reporting lines is the default rather than the exception.
2. Origin and development
Interim management arose in the Netherlands and the United Kingdom and came to Germany in the 1990s. It answered a problem that grew with flatter hierarchies: an unfilled key post can no longer simply be absorbed.
In HR it carries particular weight because HR functions are often thinly staffed. If the head of HR or the payroll function is absent, duties with fixed deadlines come to a halt – notifications, payroll runs, certificates. That does not tolerate a recruitment process lasting months.
3. Core principles and how it works
Responsibility, not recommendation
The interim manager decides and implements. That is what distinguishes them from consultancy.
A fixed term from the outset
The objective, the scope and the end belong settled when the mandate is given. Without an end date a permanent solution arises at the cost of a temporary one.
Take the status question seriously
Being subject to instructions and integrated into the organisation point towards dependent employment. How the engagement is arranged decides, not the title of the contract.
Plan the transfer of knowledge
What the person builds up has to remain. Handover belongs in the mandate, not at its end.
Settle the mandate
Authority to decide, budget, access to management. Without a mandate even an experienced interim manager can achieve nothing.
4. Who is Interim Management (management on a temporary mandate) relevant for?
- Businesses with unfilled key positions – particularly in HR, finance and IT.
- Mid-sized businesses – for them temporary access to experience is often the only route.
- Businesses in special situations – restructuring, system introduction, succession.
- Management – they award the mandate and carry the status question.
5. How it differs from related terms
- Interim management and consultancy – consultancy recommends, interim management decides and implements. - Interim management and hiring-out of employees – on a hiring-out, external staff work in the business under its instructions; that requires a licence. The line is the most delicate point in practice. - Interim management and outsourcing – on outsourcing a process goes out permanently; in interim management a person comes in for a period. - Interim management and a fixed-term appointment – a fixed-term appointment is an employment relationship with all that follows; an interim mandate regularly is not.
6. Variants and adaptations
- HR interim management – head of HR, payroll, recruiting for a period.
- Bridging a vacancy – keeping the business running until the post is refilled.
- Project interim – for a defined task with a clear end.
- A restructuring mandate – with particular strain and high demands on the mandate.
- Part-time interim – individual days per week; widespread in smaller businesses.
7. Advantages and challenges
Advantages
- Immediately available experience, with no recruitment process
- Duties with fixed deadlines keep running
- An external view without entanglement in the business
- The cost is time-limited and predictable
- In special situations, experience rarely available internally
Challenges
- A high daily rate compared with a permanent appointment
- Induction costs time, even with experienced people
- Knowledge leaves at the end where the transfer is not organised
- Status risk where the engagement is arranged wrongly
- Acceptance in the team cannot be taken for granted
8. Best practices for implementation
Set the mandate down in writing and narrowly
Objective, scope, duration, mandate, reporting line. An unclear mandate is particularly expensive at high daily rates.
Check the status question in advance
Freedom from instructions, the person's own equipment, no integration into the organisational structure – and in case of doubt a status determination procedure.
Plan the handover from the start
Who takes over what at the end? That question belongs in the mandate, not in the last month.
Make the mandate visible
An introduction by management with a clear brief saves weeks of feeling the way.
Put a date on the end
Decide extensions deliberately rather than letting them run.
9. Tips for employers and employees
For employers
- **Do not underestimate the status question** – how it is arranged decides, not the contract title
- **Settle and communicate the mandate** – without authority, experience achieves nothing
- **Commission the transfer of knowledge** – otherwise what was built leaves with the person
- **Act quickly for HR functions** – notification and payroll deadlines do not wait
For employees
- **Interim managers are not permanent superiors** – their mandate is fixed in time and scope
- **Sharing knowledge pays** – the transfer runs in both directions
10. Conclusion
Interim management is the answer to an unfilled responsibility, not to a need for advice. It pays where experience is needed immediately and not permanently – and particularly in HR, because there duties with fixed deadlines hang on individual roles.
Two points decide success and risk: a clearly drawn mandate, without which even experienced people achieve nothing, and a clean arrangement of the status – because whether dependent employment exists is decided by lived practice and not by the heading on the contract. For a group that runs matrix reporting as standard, that second point deserves attention before the engagement starts: integrating an external person into those reporting lines is exactly what the status test looks at, and Section 7a SGB IV exists to settle it in advance.
Sources
- Section 7 SGB IV – Employment (German original; no official English version) (opens in a new tab)
- Section 7a SGB IV – Determination of employment status (German original; no official English version) (opens in a new tab)
- Section 611a BGB – Contract of employment (official English version) (opens in a new tab)
- Status determination (English pages) (opens in a new tab)
- Interim management in Germany (opens in a new tab)
Related terms
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