Guiding your business through a transition period after sale
If you decide to sell your business, there’s going to be a lot of planning and administration involved. One thing that might not spring to mind instantly is how the move will affect your employees, so here’s some guidance on how to manage the transition period after sale seamlessly.
When a business is in a transition period, those in charge barely have a minute to spare, and when there? a lot of work to do it can be easy to let one of the most important elements slide the people.
Regardless of the size of the business, the employees are what make it and morale is crucial at any stage of the company lifecycle.
When a company decides to sell, for any reason, it can make the employees feel unsettled. Put yourselves in their shoes they’re likely to have a lot of questions.
Why was the company sold? Will my job be safe? How will I work with the new boss?
Employee morale, or how a person feels about their job and workplace environment, is proven to have a huge impact on productivity. Keeping them in the loop at the point of sale and clearly communicating the changes that will be made at the company may pay off in the long run.
The dangers of low morale
A workforce with low morale might sound like a soft issue at first, but it very quickly makes its presence felt in more tangible ways.
A less engaged employee will not be trying their best, and lower concentration can lead to mistakes, delays on deadlines and shoddy work. In addition, it is likely to increase staff turnover as employees get bored and seek pastures new and, in some cases, it can increase instances of absenteeism.
With less work being done and mistakes made that could potentially be costly to the company, low morale really starts to add up.
Then of course, when employees leave for whatever reason, there’s the cost of replacement. The new owners might have to pay an agency to do it for them, or take time out of their schedule to source the right person for the job. Once theyve been found, there’s also the cost of training. Could all of that be avoided by making your employees feel more valued in the first place?
If you decide to sell your business, this can have a negative effect on morale if not handled correctly. You will need to keep staff in the loop as much as is appropriate and make sure that new managers are brought on seamlessly.
Huge upheavals in the work place will make employees feel uneasy and unsettled, so where possible ensure there is a comprehensive handover process to make things smoother for everyone.
If a buyer believes morale will be affected when purchasing a business, this will likely lead to a lower offer, or terms may even be written into the contract of sale that allow them to claw recruitment costs back from you, even after you’ve sold the business.
Letitia Booty is a special projects journalist for Business Advice. She has a BA in English Literature from the University of East Anglia, and since graduating she has written for a variety of trade titles. Most recently, she was a reporter at SME magazine.