Here’s how to approach the situation.
Main Priorities
These are your biggest overarching priorities when selling a business and managing your existing employees:
- Preserve the integrity of the deal. First, you have to preserve the integrity of the deal you signed. In many cases, buyers will only proceed with the deal if they’re able to retain the team you’ve already assembled. If your employees all quit, the deal may no longer be relevant. It’s up to you to make sure this unfolds as you intend.
- Smooth the transition. Next, you’ll want to try and smooth the transition as much as possible. A smoother transition means your buyer will be happier, you’ll have fewer headaches as you close the deal, and your employees will be able to continue doing their jobs effectively.
- Keep employees happy. Finally, you’ll want to do your best to keep your employees happy. While this isn’t a strict requirement for the deal to go through, it will make you and your employees feel better about the sale of the business, and will ensure the survival and health of the business for years to come.
So how can you achieve these goals?
Key Strategies for Managing Employees
These strategies can help you achieve all three major priorities simultaneously:
- Negotiate for employees’ benefit. First, when you’re negotiating the sale of the business, try to keep your employees’ interests in mind. This isn’t always possible, but it could help protect employees who might otherwise be vulnerable. For example, is your buyer interested in cutting costs and downsizing? Can you convince them to preserve your current workforce in some way?
- Keep things quiet at first. You might be tempted to tell your employees all about your plans as early as possible; after all, transparent businesses have a lot of advantages. However, it’s usually in your best interest to keep things quiet at first. There’s no use making employees worry about a deal that isn’t even close to being finalized—and if employees panic before all the details arrive, it could mean trouble for your business, both now and after the deal closes. Instead, keep control of all information related to the deal.
- Bring employees into the loop individually. Next, work to bring employees into the loop about the deal on an individual basis. Start with your most trustworthy and loyal employees, as well as employees who are deemed essential to retain as part of the deal. Gauge their response to the situation, and get their feedback. They’ll appreciate the individual discussion, and will help you determine how to move forward with the rest of your employees.
- Explain your reasoning. Take the time to explain why you’re selling the business. This is especially important if the company has a bright future ahead of it; otherwise, some employees might panic, believing the business is in trouble or that you’re worried about the future of the business. Be honest.
- Ask for commitment. When speaking with your most valuable employees, end the conversation by asking them for a commitment to stay. A verbal pledge isn’t going to be legally binding, but an employee who agrees to stay on can give you the confidence you need to close the deal.
- Incentivize retention. If you’re having trouble convincing employees to stay with the business, consider incentivizing their retention. This may be something you can offer, or something you can work into the deal; a cash bonus or the promise of a future raise can work wonders for morale.
- Consider staying on temporarily. If you care about your employees and you want them to succeed in their new environment, consider staying on temporarily. You can work in a more limited capacity, or serve as a kind of supervisor for the transition; either way, you’ll get to smooth the transition both for your buyer and for your employees.
- Show appreciation. Finally, take the time to show your employees how much you appreciate them. Even small, simple gestures, like a handwritten thank-you note, can have a massive positive impact.
As the deal begins to form, you’ll likely face a great deal of stress—especially if your employees take the news less well than you’d hoped. Do what you can to keep the peace, take things one step at a time, and try not to worry too much about worst-case scenarios. Keep looking for new paths forward, and find alternative solutions to your problems when necessary.
