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Management Buyouts: Are you Overlooking Your Employees?

Management Buyouts: Are you Overlooking Your Employees?

Company acquisitions by a management team or parent group, more commonly referred to as Management Buyouts, have become more commonplace since the 1980s.

Because they are still a relatively new phenomenon and as management buyouts (MBO) are different, it is easy for factors to be overlooked that aren’t connected with the financial, operational and strategic aspects.

“Human resources can help facilitate another essential part of the process by ensuring employees are involved and kept on board, says Charlotte Gallagher, Managing Director of P3 People Management, “and productivity isn’t affected by the change of ownership”.

Charlotte commented: “It is a common occurrence for staff to fear change, so it’s easy to understand how rumours about job losses, a possible relocation and uncertainty over alterations to contracts will affect discipline, profits and efficiency during a takeover”.

Possible repercussions when employees aren’t included in both short-term plans and long-term goals range from apathy, increased absence levels, perceived lack of respect and even compensation claims if contract clauses aren’t adhered to.

Charlotte added: “The human resources department is vital to aid the transition by instigating employment communication packages, scheduling open forums and meetings for members of staff to ask questions both as a group and individually”. “Providing regular updates which are consistent and timely is essential to keep employees up to date during an often fast-moving process”.

Human resources can also assess areas such as employee benefits to check for any potential problems, such as ensuring pension plans have adequate funds or health insurance packages are viable for the business to continue to offer.

Business Aspects Magazine would like to thank Charlotte Gallagher for her contribution to this article.

P3 People Management provides information and support for businesses and management teams who are considering a management buyout. You can visit their website here or call 0161 941 2426 for more information.