Let employees go. Follow these tips to help you tell employees that your company is closing, and to do it with as little stress as possible: Let employees know the business is closing before they read about it. Sometimes even the employee can't pinpoint why they're discouraged, which makes communication all that much more critical. You sit back and let it play out. How to Tell Your Employees That Change Is Coming: 13 Tips If you do it right, a candid conversation about change can inspire and motivate your team. Moving to a new space can impact your staff’s morale, so you have to handle the process with care. As a business owner you’ll want to maximise value in your business when you sell it. Roughly 30% of employees are deemed redundant when firms in the same industry merge. As an HR pro, you are in a unique position to help your company be successful. Secondly, make sure you let your current employer know what your thoughts are. The acquiring company has a real interest in keeping productive employees. In some cases, the employer may also be responsible for giving the employee severance pay. Never tell your employees that you're unhappy with them as a group. If your company is taken over, merged or sold to another employer – or your job is transferred out of a local authority to a private contractor for example – your contractual terms and conditions of employment go with you to the new business. You may wish to talk to your employees directly and explain the situation. Should that occur, you have two choices. Dear _____(Name of the employer) I would like to thank you for taking your valuable time out from your busy schedule to discuss the insurance matters of the company with me. If the CEO has narcissistic personality disorder, the company will be in trouble at some point, even if it's not at the moment. If your employer is acquired, it’s important to think through any major decisions or changes to your job or finances. It's natural for employees to panic slightly at the news; they might think the worst and that their jobs are likely to go up in smoke. You may be willing to move anywhere, or you may be tied to your current community by family obligations. Know Your Company's Worth. In the current environment of organizations acquiring technology development companies, generally speaking employees are fairly safe. Prepare to sell by determing the value of your business. Until your company tells you directly, or you hear about it in the media, you likely will not know for sure that your company is up for sale. If your company is undergoing a merger or acquisition, you’re apt to feel anxious. Make sure your company profile is current, and that your resume is up to date. Four Things Every Employee Should Consider, the most difficult decision you need to make is whether to exercise your options in advance of the offering. On the other hand, if you go too formal with the salutation it will seem impersonal. These employees should be people you trust not to spread the word of the sale just yet. Deciding how to tell your employees you’re selling is a personal decision. Very often employees are afraid to tell their boss, so you'll need to be persistent or innovative in your approach. Decide on the outcome you want. To stay competitive in a constantly evolving world, businesses need to focus on innovation, quality, and growth. What happens to employees of an acquired company really depends on the type of acquisition it is. This includes express and implied terms. However, there are several signs of a company being sold that you should know, such as changes in leadership, hiring practices, company performance, secretive meetings, reorganization and rumors of a sale. Whether you close your business or you sell your business and the new owner doesn’t need them, it is difficult to let employees go. I started and grew a technology company in the late 1990s, and sold it after being approached by a larger, public company. This article explains your legal rights in a layoff, including what your former employer is required to do for you. Notify key accounts first. I was not able to handle the important investment deals as well as economic issues of the company due to lack of knowledge. Once you’ve found a serious buyer and have outlined the terms of the sale, you can begin telling your biggest clients. From letter of intent to closing it took about six months and during that time I let the employees know what was happening. Take our advice into account, but trust your gut. 2. If you decide not to tell your employees that the business is being sold, you don't have to tell them anything – unless someone finds out on their own. If you have a contract with your employer, depending on the specifics of it, you may be able to avoid a lay-off if your contract specifically states that you must retain your position, even in the event of a merger or buy-out. It is much better to wait until you have a transaction near completion. Tell your employees why you're selling the company. This is true regardless of whether you are a unionized or non-unionized employee. If you don't, it can create fear and chaos. John Warrillow Relocating to a new office can be a cause for excitement, as it is often a positive step for your company. When to Tell Employees You are Selling Your Business. Some might fear the worst and begin looking for another job. I have been involved in billion dollar mergers that take up to a year to settle out. SHARE THIS ARTICLE. Even if your company is sold tomorrow it could take some time for them to complete the merger depending on how large the company or division. The initial announcement will be responsible for letting your investors and employees know that you are currently working on closing, or have closed, a merger or acquisition. Sub: Thank you Letter to Employer. You can either deny everything (probably not a good idea) or tell them the truth, but explain your reasons for keeping the knowledge of the sale confidential. If you're unsure about timing and confidentiality issues, consult with your broker and other trusted advisers who have successfully sold businesses in your industry. 8. In a share purchase, the key fact is that your employer does not actually change - just who owns the employer. Surprises are OK if it’s your birthday, but finding out through the grapevine that you no longer have a job isn’t ideal, and reading about it in the morning paper stinks. Those fears, however, are probably unfounded and are therefore unnecessary. Maintaining confidentiality surrounding the sale typically takes precedence over other concerns, yet it may be impractical — or even impossible — to keep employees in the dark. Your role is to give people what they need to perform, not what you need to release. One way of enhancing value is to manage your employees carefully during the process. By telling your employees too early that you are considering selling, you may stir up fears they may have about the future. Telling your staff you are thinking of selling may feel like the right thing to do, but in the end, keeping them in the dark may be the best thing for you and your employees. Good communication is key to ensure that this period of change is easier for both yourself and your employees. Motivating Employees For employees, my rule of thumb is to set aside 10-20 percent of the company’s equity for the key members of the team. In the end, every company ever sold has lost some employees. Small Company The best method is to look at the CEO and upper management. Your employment is continuous – your service is not broken by the transfer. If you work for a business that changes ownership through a sales of shares, you seamlessly become an employee of the new owner. Even if you feel like your company is rock solid, it might not be over the long haul. The issue of what you tell your employees when you’re trying to sell your business is a tricky one that requires careful thought. Facebook 0 Tweet 0 LinkedIn 0 Print 0. But your former employer has legal obligations as well. Don’t let your preoccupation with the sale blind you to what the troops are saying. They also can help get your business in order for the due diligence process, and may even become potential buyers. If that goes against your brand, you should avoid using “Dear Mr. John Henry Smith” or “Dear Sir”. After all, it presents a change in their routine. If you've lost your job in a layoff, you are no doubt concerned about your finances, benefits, and finding new work. Here are helpful tips for employees. Right now, the new regime views you as … How much you tell other employees and customers depends very much on the nature of your culture and your business. Informal get-togethers are also great places to listen for rumors and to squash the scuttlebutt that can infect employee morale. Here are some steps to take to ensure your team … However, moving is a big step not only for you, but for your employees as well. Every organization is unique, and every business owner is unique. 4) Make Friends: What’s the biggest mistake you can make after your company has been sold? You can spread that as far as you … Be careful to only tell key employees in your company first. In this case it’s fairly straightforward: improved performance. If your company’s brand is very serious, it probably doesn’t make sense to open the letter up with “Hey dude…”. Only you know what’s truly right for you and your company. If you work for a business that is sold, and you lose your job without proper notice or pay, or if you lose any rights or pay, it may be considered wrongful dismissal, and you may be able to sue both the former and the new employer. By hiring and promoting the right people, you have the ability to infuse your company with top talent. If the sale involves selling shares, employment may remain largely unchanged. We hope you can more intelligently weigh the plusses and minuses of exercising your options early now that you have been armed with a better understanding of what goes on behind the scenes of an IPO. 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