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BUYING A SMALL BUSINESS

Retaining Employees Following an Acquisition

Steps you can take to retain as many existing employees as possible when you acquire a company.
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Human Resources mentor Rudy Karsan responds to the following question from an inc.com user:
I am in the process of acquiring another call center. This is my first acquisition. I want to retain as many of the purchased company's employees as possible. Many of the employees have given five or more years of service to date. How should I handle their hire dates when calculating vacation time?

Rudy Karsan responds:
Congratulations on your acquisition! I was delighted to receive your question because in my experience most acquirers do not spend enough time focusing on how to retain individuals after the acquisition. I would take the following steps to retain the employees of the company you have acquired:

  1. Discuss with the existing management team of the acquired company the value of the various individuals currently working for the company you have bought. Keep in mind that the selling company is usually trying to protect its existing employees. I would also recommend a full human resource audit of the HR files of all employees of the company you're acquiring.
  2. The leadership group of the acquiring company should spend some time, either individually or in small groups, with all employees of the acquired company. In a larger acquisition, this step is time-consuming yet crucial.
  3. Outline your HR policies, especially the changes you expect to make in either compensation or benefits, for the acquired staff. Announce any planned changes as soon as possible.
  4. Because you want to retain employees, I would recommend that, when calculating employee tenure and hire dates, you should use the individual's original start date, rather than from the date of your acquisition. If, for example, you give more vacation to employees with five years or more of service, you should include employees who had five years of service with the company you are acquiring.
  5. Explain to the newly acquired employees as clearly as possible the culture, values, and benefits of your company.

My experience has taught me that there is a direct correlation between the retention of the existing staff and the amount of time and effort the leadership group of the acquiring company invests in the acquired employees. I cannot stress this enough -- You can never overcommunicate at the time of an acquisition.

Copyright © 2000 inc.com LLC

Last updated: Sep 12, 2000




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