Employee RetentionEmployee Retention is often a problem when business ownership changes. This is especially important if the business you are buying relies heavily on some particularly talented employees. Much of this issue is out of your control, because it is the seller who has the daily contact with the employees. The first question that comes to mind regarding employee retention is when should the seller tell their employees that they are selling the business? If the seller has not told their employees about selling; the moment you take your first tour of the facility, the rumors will start flying and then grow until the seller finally does announce that they are selling the business (thus confirming the rumors). Obviously, it is up to the seller to decide when to do this, but I suggest you encourage the seller to tell everyone before you make your site visitation. 
Typically, the larger the company—the lesser the problem with employee retention. There are always multiple layers of managers, and employees normally do not come in much contact with "ownership." Consequently, the changing of ownership really does not matter all that much to them…unless they are concerned about sweeping organizational changes and the possible loss of their jobs. This is something that buyers need to be highly sensitive to.Steps The Buyer Can Take First, long before the deal closes, you need to determine (with the help of the seller) whom you want to make sure stays with the business. You need to do the same sort of planning when buying a business as you would if you were starting a new business. You need to know who the key employees are, and try to determine how satisfied they are in their jobs.If the seller is willing and things are rolling along smoothly toward the closing, you and the seller may want to hold an all-employee meeting where the sale is announced and you have an opportunity to share some of your planning with the employees and assure them that things are only going to get better and that you want them all to not fear a transition in ownership. Make sure you are being both confident and truthful in what you are saying at this time, because if things do change dramatically once you take over, you may have damaged your trust with the employees. Even then this action is a little dicey when done before the deal closes. But, normally it is worth the gamble, especially if there are any indications of employee unrest before you take over. If there are some really key employees that could make a huge impact on your plans should they leave, it might be wise to sit down with them even before you take over to explain a little of your plans and how you see them fitting into those plans. After The Sale Closes This is a very important time in the transition of ownership. You need to assure your new employees that they are all key to the success of your plans. That's why you can't wait until the deal closes before you complete your operating plans for your new business. If you can start out the first day by sharing your plans with your employees, and reassuring them, you will go a long way toward employee retention.In smaller businesses employees are always apprehensive about a new owner, so the quicker you can eliminate their apprehension, the more successful you will be with the transition of ownership. Employee retention is more an art than a science, and every business sale is different, so use these suggestions as guidelines and plan out your strategy accordingly. There is one type of business that has an additional special consideration for a buyer—a manufacturing company. Not only are there employee retention issues to deal with, and inventory considerations to work out, but in manufacturing companies, there is the additional issue of equipment—usually high-value equipment—to work out. To help guide a buyer through the maze of issues in buying a manufacturing company, I have created a special report titled, Buying a Manufacturing Business. You can also access it below. Return to Top of Page Proceed to Buying a Manufacturing Business Return from "Employee Retention" to Buying a Small Business to view the "List of Reports" for this section Return to Home Page.
|
