When managing difficult staff, remember that when a company is sold, its employees are transferred to the buyer, and their rights are protected under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).
Their terms and conditions of employment will remain the same, including salaries and benefits, and their original start date of employment.
Once the employees have transferred, you may find you’ve a surplus of staff and wish to make cuts to save money. You must consider your own employees for redundancy alongside the new employees if this is the case.
Beware of making hasty decisions when managing difficult staff. After all, you bought this business because it’s worth something to you.
Unless you purchased the business purely for the name, or to eliminate a competitor and nab some of their clients, much of its value resides in its people – who got it to where it is today.
You could defer the redundancy decision to give your staff – old and new – a chance to prove themselves in the newly merged organisation.
Of course, it is one thing to keep on employees, but quite another to keep on the business’s previous owner and/or managerial team.
The advantages of keeping on the previous owner
The immediate advantages of keeping on a previous owner or manager are probably quite clear: they know everything there is to know about your newly acquired business and they can teach you.
Keeping on the people in charge is a great way to get a clear picture of the business as it operated until your arrival. It can therefore help you integrate the two businesses more smoothly.
But be mindful of a key difference between the previous proprietor and existing managerial staff. The former may have had very hands-off approach, taking a salary for years without ever really understanding the inner workings of the business any more than you do. It is therefore worth finding out their reason for selling up to ascertain their usefulness to you.
The disadvantages of keeping on the previous owner
While a hands-off owner may be of little use to you, that doesn’t mean it’s plain sailing with a hands-on owner either.
Transitioning from running the show to taking orders from you is going to be a bit of a culture shock. How will they adapt to someone else calling the shots?
There could be some strong emotions at play that generate friction in the workplace.
It may also be worth considering whether there is any love lost between the previous owner and transitioning employees. If the business sale has eroded trust in the former among the latter, it may cause ill feeling.
A clear chain of command must be established, and everyone needs to know exactly what they are responsible for and who they report to.
To win the trust and respect of the previous owner or management, one thing is vital: respect the time and effort they put into the business, and be sensitive to the emotional impact of selling up and surrendering control.
Entrepreneurs are infamously unwilling to delegate – their business is their baby and a strong emotional connection is usually at play. Listen respectfully to the previous owner’s advice and make them feel heard.
But don’t feel pressured into heeding that advice if you feel it’s the wrong move – you’re the boss now and it’s your investment at risk.
If you acquired the new business with the intention of fully integrating your two businesses, this problem is more complex, as two hierarchies need to merge.
However, if you’re diversifying your offering and expect the businesses to operate fairly independently, keeping on previous management may be more straightforward as they will enjoy more autonomy.
Before you purchase a business, have a clear view in mind of what the result will look like. Will it effectively be two partner companies, running side by side and pooling resources? Or will it become a new, merged entity, with a new chain of command?
Have this set in your mind first and the rest will follow. Once you know what you expect of your employees, you will be better placed to lead them.
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