Your employees are part of the deal – take good care of them
When selling a business, owners automatically think first about their own wants and needs. Then, they consider what the sale means for their families. But when the business is sold, it can be a life-altering event for your employees and their families, too.
When the transfer of ownership is announced, employees immediately wonder what it will mean for them. For example, they may ask:
- Will my job be eliminated or given to someone else?
- Will my job be restructured?
- Who will I report to?
- Will I have more or less autonomy?
- Will new policies affect how I feel about working for the company?
The post-sale integration team should be prepared to address the most frequently asked questions as soon as possible. It can help dispel false rumors that may slow the integration of work cultures.
While you might not be able to immediately answer every employee’s questions, here are a few actions that can help employees cope.
Encourage employees to keep an open mind. They should not obsess over circumstances beyond their control. Ideally, they give the new owners from 6 to 12 months before deciding whether or not they want to seek opportunities elsewhere.
Recognize each employee’s specific needs and goals. Some employees will want to remain with the merged organization for a while to see how it goes. Others may want to make a clean break and start looking for other career options immediately. You can never assume how an individual employee will react during a post-sale integration without knowing more about their family situations and long-term aspirations.
Encourage employees to help the transition team succeed. Employees who demonstrate collaboration skills during the post-sale transition may get opportunities to shape new and better jobs for themselves in the merged organization.
Remind employees that change always presents new opportunities to grow. Ideally employees will find new ways to contribute their talents in the restructured organization. But realistically, some employees in redundant positions may be let go. If you know that some employees will be terminated, do what you can to help them transition to a better job elsewhere or start working independently.
Handle The Element of Surprise
Most employees of middle-market privately held companies won’t learn about the sale of the business until the deal is closed. Many will be caught off guard, and react emotionally instead of rationally. This is normal.
Remind employees that mergers and acquisitions are a normal part of business operations. At some point in their careers, almost everyone will work for a company that undergoes an ownership change.
I experienced the emotional wallop of an ownership change myself when my father sold a 60% stake in Vomela Specialty Company in 1990 to Tom Auth. Because I was only able to buy the remaining 40% stake, Tom had the freedom to make major changes in how the business was run, such as bringing in an outside executive to serve as president. As Vomela evolved from a family-like workplace into a more corporate culture, Tom asked to buy me out. As I explain in my new family-business memoir “They Named You Right,” I sold my shares of the company to him in 1993.
At first, the change in Vomela’s workplace culture saddened me. But now I realize it was necesssary for for Vomela to grow into one of the largest wide-format graphics producers in the U.S.
For the past 40 years, I have helped business buyers and sellers consider some of the challenges to expect during the post-sale transition.
For employees, the transition to a new ownership group doesn’t have to be bad. Over the long run, the new owner may be able to provide a more stable work environment with better pay and benefits, access to more resources, and greater opportunities for professional and personal growth.
So now, I advise my children and other young people to be patient and avoid knee-jerk reactions. Research the incoming leadership personnel and give them a few months before you make any career-changing decisions.
But be wary of verbal promises from new managers. Take copious notes during meetings or get every promise in writing.
I also encourage them to update their resumes, improve their skillsets, and network, network, network. Ultimately, life is short and each of us makes our own future. Find a sense of purpose, work hard, help others, and love what you do.
RESOURCES
Rock’s Career Stage 4: Selling Our Family Business to Tom Auth
Family Business Memoir: They Named You Right by Rock LaManna