Reasons for buying a business vary enormously, but in many cases the skills, contacts and team spirit of the staff are among them.
Much of the business’s profitability is down to its employees – and this is particularly true for service industries such as estate agents, hairdressers or financial brokers. Often client relationships are with the individual rather than with the brand or the firm.
Change management is a skill that most leaders and managers will have to employ at some point in their careers – and business buyers will have to learn the basics almost immediately
Even in other sectors, it is important to remember that the business would probably not be worth the money you paid for it if the staff were not part of the package.
A business changing hands can be an enormous jolt to its employees. Many will, quite naturally, worry about their future with the firm, whether the company changes direction or not.
In the most extreme cases, this can lead to mass resignations.
Skill
Change management is a skill that most leaders and managers will have to employ at some point in their careers – and business buyers will have to learn the basics almost immediately.
The law
- Employee rights are usually protected when all or part of a business is sold
- Under the Transfer of Undertakings (TUPE) Regulations 1981, employees transfer to the new business under the same terms and conditions
- New regulations introduced last year mean that employees in businesses of over 150 people have a statutory right to be consulted on employment developments and other big changes to their employer – including a change of ownership
- This will include businesses of over 50 people from April 2008
- If you do not consult, you could be ordered to compensate them by an employment tribunal. Regulations are less strict if there is an economic, technical or organisational reason for changes in the workplace
- Changes to employment contracts can actually be viewed as constructive dismissal under the law
People react very differently to change; some thrive on it, while some prefer stability. The key during a transition is to ensure that everyone feels included in the new regime. As with most strategies in business, the key is managing expectations.
According to theory, most employees will be shocked or angry if they discover that a business they have worked hard for is being sold. Most will expect the worst, causing an immediate drop in morale.
An immediate goal will be to convince your team that, not only is the takeover not a disaster, it could actually lead to a brighter future.
Three needs
Occupational Psychologist Will Shutz believes that people have three needs during a period of change – the need for control, the need for inclusion, and the need for openness.
Individual interviews and strategies for each of your employees can be an ideal way to satisfy all three needs. It will also help you recognise that not all your team will react to change in quite the same way.
A key to employee happiness is for them to feel that they have a number of options that they could pursue, be it in the short term or long term. You will be able to identify these after an interview.
