Downsizing is a challenge – but how can affected employees be supported in the best possible way? Two tried-and-tested models are the transfer company and the transfer agency. Both help employees to restart their careers, but they differ in important ways, and we have put together a compact comparison of the most important similarities and differences for you.
- Transfer company (TG) and transfer agency (TA) are used as part of corporate downsizing measures
- The target group are employees who are affected by downsizing and whose employability is to be increased through targeted training measures.
- In both models, employees are financially protected during the transition phase. Funding is provided by a combination of employer benefits and state subsidies from the Federal Employment Agency (BfA).
- The aim of both models is to find sustainable follow-up employment for employees as quickly as possible and thus avoid unemployment.
| When to use a transfer agency? | When a transfer company? |
| Supporting employees in their search for a new job | Catch-up solution with qualification & placement in new jobs |
| Short-term measure until the end of the notice period (usually 3-6 months) | Employees receive financial security for up to 12 months (term of the TG) |
| Employer pays regular salary until the end of the notice period then unemployment benefit I | Payment of transfer short-time allowance by BfA (67% of last net income) + possible employer’s allowance |
| Funding of up to 50% of consulting and placement costs by BfA possible (max. 2,500 euros) | Funding of up to 50% of the qualification measures by BfA possible (max. 2,500 euros) |
| Employees are still available to their employer during the consultation period | Employees are no longer available to the company after joining the TG |
| For minor adjustments or quick placement with a flexible start | For larger restructurings with more people affected |
The decision between a TA and a TG therefore depends on various factors, such as
- the size of the company
- the number of employees affected
- the financial situation of the company
- the nature of the employees’ work
In practice, both models are often combined. For example, a transfer agency can be used to prepare for the transition to a transfer company.
