11/ 21/ 2005
by Judy Artunian
How to calm employees’ fears when your business is for sale
When Mindbridge Software was up for sale last year, employees began wondering why strangers wearing suits were showing up at the company’s Norristown, Pa., offices where casual dress was the norm. Mindbridge co-founder Scott Testa decided to calm employees’ fears by revealing his plans in a company meeting. Shortly thereafter, two employees quit.
Your employees are among your business’ most vital assets. If you don’t want those assets to walk out the door while your business is up for sale, stay mum about your plans until you have officially passed the baton to a new owner.
Despite your best intentions, though, word can still leak out. Experts say that when word of a potential sale gets out too early, you risk losing employees who fear that their jobs are in jeopardy. Meanwhile, employees who stay are burdened with a sense of uncertainty while you search for a buyer.
Dan Smith, managing partner of Skillman, N.J.-based Princeton Search Group, recommends cementing loyalty well before employees learn about the sale by reinforcing the strong points of your business’ culture.
“Remind employees that honesty is part of the culture, and if something is going on that will affect them, you will tell them because you have their best interests at heart,” Smith says.
While you can’t guarantee that every employee will have a job under the new ownership, you can be reassuring when you announce the sale. According to business broker George Lanza of Brea, Calif.-based Plethora Business, “They need to know that the new company isn’t coming in to fire everybody. A business isn’t an empty building. A business is the people.”
