Have you been thinking about selling your business? Is there a good time to tell employees? Whenever you are selling a business, you must consider the employees. Yes, ownership changes hand, but circumstances will change for more people than yourself. Employees may be affected, be paid less, or even be out of a job. You should do what’s best for the people that have helped you and your business; you owe it to them.
It’s never easy telling the staff you’re selling the business. Often, the owner will avoid divulging any information about the sale and delegate that job to the HR team or people in a managerial role. You should be the one telling the staff. You want to be honest at the right time, and that will require a little bit of planning and forward thinking.
Make sure it’s set in stone
If the sale of the business is up in the air, there is no need to start telling people. You should only tell people if the deal is final. The best way to sell the business is with the help of an expert, like Digital Exits. This way you can focus on your employees.
There is no need to create unnecessary stress for employees. In some cases, employees have been told too early, they have left their job, then the sale has not occurred. You don’t want employees to go prematurely.
If you find yourself in a situation where you need to sell the business, regardless of the price, inform your employees early. You should give them an accurate timeline as soon as it’s available. Give your employees adequate time to figure out what they want to do. Leading us to the next point.
Let them know specifics when it’s time
Employees will be affected when you sell the business. When ownership changes hands, typically the employee contracts will do the same. However, you can make negotiations in the contract of sale that will help employees. You can try to include a clause which states a certain number of employees can stay in the business. Why would the potential buyer go for this? You need to give the buyer some incentive to agree. The easiest way to do this, get an evaluation of your business, then offer to take less money than the assessment to maintain the contracts of employees. Before you go ahead with this, understand that it may not work. Additionally, make sure those employees want to stay!
When negations fail, do your best to find out what the new owner intends to do with employee contracts. The earlier they have the information, the better.
Let’s assume that existing employees can no longer stay in business. Do your best to provide support. Offer letters of recommendation and be a reference where necessary. Termination clauses must be fulfilled.
Employees have rights and you will need to meet them after termination. Any accumulated vacation time and sick days can be used until the official end date of their employment. Employees might be entitled to compensation; you need to work out who will pay that.
The process of selling a business isn’t meant to be easy. You don’t need to complicate it further by keeping your employees in the dark. Always keep a line of communication open. Furthermore, maintain and understanding attitude. Good luck!