How to Transition Employees When Buying a New Business

Edmund Lazarus
2 min readMar 19, 2021

A change of control is almost always a cause of anxiety to staff. Instead of this becoming a hindrance to transferability and integration if two business operations are being combined, a buyer can do several things to ensure a smooth changeover.

Give careful consideration to the content and timing of staff discussions.

Buyers should to have discussions with staff until a detailed joint approach has been agreed with the seller. Where possible details around staff contractual terms and where relevant integration processes should be considered in detail in advance so answers to questions are available.

Ask the Seller for Assistance

One shouldn’t hesitate to ask the seller for help with the staff transition. Some sellers to offer, and others hesitate because they might see it as interference. When they’re ready, the seller can introduce the buyer to management and staff to build relationships from a context of co-operation and openness from both parties to the transaction.

Talk to Staff about Their Goals

An excellent way to garner staff support is to talk with them about their professional goals. Employee input can inform the allocation of tasks or how best to match employees with jobs based on their skills and preferences.

Establish Clear Expectations

Most employees react to a transition with feelings of uncertainty , which turns into anxiety if left unresolved. New owners can reduce uncertainty by anticipating employees are likely to have and responding to them clearly.

Ask for Documentation

Staff and owners can provide job descriptions and workflows in writing if that information isn’t already available. The buyer must get all this information together as soon as possible to fill or replace positions quickly.

Give Them a Reason to Stick Around

Buyers can show their commitment to well-performing staff by paying them an to stay. New owners can present this as a bonus or thank-you gesture.

Strive for Staff Commitments through the Transition

A staff person who’s willing to stick around during the transition might not want to stay after a few months. In turn, the owner might not want them to stay. Nevertheless, new owners can provide bonuses to encourage as many employees as possible to stay, at least through the initial period so the business does not suffer from a lack of continuity.

Originally published at http://edmundlazarus.net.

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Edmund Lazarus

Edmund Lazarus, Managing Partner at EMK Capital, an expert in private equity. To learn more, visit http://edmundlazarus.com/.