The process of selling a business is incredibly time consuming. Business owners and management teams will be stressed to their very limits. The last thing you want to think about once a transaction is done, or nearly done, is communicating effectively with employees, but doing this well will make the ownership transition much easier and lead to fewer headaches. Here are some things to keep in mind:
1) Keep It Quiet Until It's Done.
Except for the key employees that you need in order to complete a transaction, the news of the pending deal should stay quiet until the transaction is complete. You may want to tell people, but news like this never, ever stays quiet and when it reaches employees as a rumor, you cannot control the message. Sale rumors can create a tremendous amount of employee anxiety.
The rule of thumb here is to tell employees when you have enough information about their futures to answer their questions. Usually, this is after a transaction is complete and the administrative details have been discussed with the new owner.
2) When the Transaction is Complete - Now Communicate - A Lot.
Once you are ready to communicate with employees it is best to have your act together. Employees are going to be nervous and they are going to have a lot of questions. After you answer those questions, they will go home and talk to their spouse and come back with more questions.
At the very least be prepared to talk about:
Insurance Benefits - This is the number one issue that employees want to know about once they learn their company is being sold. Be as prepared as you can. Bring in a representative from your new insurance company if you can. Make sure you communicate if there will be changes in doctors, premiums, or plan types.
Seniority - If we are being sold to a new company, will I still be an employee with ___ years of seniority? This is especially important if it factors into people's vacation days.
Vacation - If the vacation policies are changing, make sure you communicate this. Carry over days? Use it or lose it policies? Seniority-based vacation differences? Make sure all these items are covered.
Other Company Benefits - It is important to think about all the other things the company currently offers its employees and to communicate if these will continue. Examples of things I've seen employees ask about include the Christmas turkey, the annual management BBQ, or company provided parade tickets. No matter how small, employees will want to know what is going to continue.
This is only a fraction of the questions employees will have about the transaction. Set aside some time in the days after the transaction announcement to talk with employees about the transition. Remember, they won't have all their questions formulated as you make the announcement. They will develop over the next couple of days.
3) It Seems Obvious, But Let Them Know They Still Have Jobs
Because everyone will just assume they are being fired. Take this time to meet with employees and tell them how important they have been to the company. Tell them that they will continue to be important to the buyer. Have them, if possible, meet with their new managers and demonstrate what they do. Have them own their positions and take pride in their work.
If it's possible, let employees know what the buyer has planned for the company. If they are planning on expanding or moving production capabilities to your facility, let employees know. Most buyers acquire companies because they have growth plans for the business, but most employees have the "made for TV" scenario in their head where everyone gets fired and the plant is closed down.
4) Let the Buyer Talk to Employees
If the buyer has a CEO or President that can talk with your employees, that is an ideal way to communicate the plan for the future. This will do a couple of things. First, it will be an introduction to their new company and the culture into which the employees will be absorbed. Secondly, it is a message coming right from the acquiring organization and that tends to carry more weight with employees who might be tempted to think that you, as the seller, might just be telling them things to make them feel good.
5) Assure Them That The Company is OK Without You
This is especially true of family-and-founder-held companies. When a company has been a part of a family for generations, it may be difficult for employees to think of the business as separate from the owners and the owners separate from the business. They might be worried about the viability of the new leadership and doing things differently than they have in the past.
Reassure employees that new management, new capital, and new ideas can be wonderful things for a business and often lead to better opportunities for employees. Let them know that you have created a business with a strong foundation and that it can continue without you as the owner.
The day a transaction closes can be momentous for a business owner. It can be terrifying for employees. Remember that employees are an important asset for the continuation of the business and that clear, complete, and frequent communication can be the key to a successful transition.