Issue link: http://psai.uberflip.com/i/1299190
ASSOCIATIONINSIGHT Portable Sanitation Association International News BIWEEKLY EDITION OCTOBER 14, 2020 Page 11 When a Portable Sanitation Company Sells…continued from page 10 • Will salaries remain the same for the employees of the purchased company? In one of the above scenarios, one merging company paid route service drivers on a "per-unit-serviced" method and the other company paid hourly. Buyers and sellers—or those engaged in a merger—should determine how they will resolve questions like these and communicate the results carefully to employees of both preexisting firms. • Look at the employee benefits package and whether it will change under new ownership. How does it differ from what the employees have been receiving? Plan to communicate about this and, if the benefits will be reduced, have a good explanation for this. Employees may perceive the change as a pay cut or worse. Recognize that owners will have to actively manage this perception to avoid unwanted turnover. • If seniority matters for pay and promotions, owners should be sure they can explain how the existing team's years will be recognized by the new owner or in a merged firm. • Vacation and other paid time off are another concern. Again, the policy from the new company on seniority for employees from the purchased company could have an impact. • Employee performance plans are another major consideration. Are there any changes in job responsibilities and performance measurements? Will pay incentives and bonuses change? If so, it will be critical to explain this clearly and to transition any changes in a manner that gives employees a chance to prepare both mentally and financially. In addition to considerations that affect employees directly, other decisions made between buyer and seller will have an impact on employees' future work and job satisfaction. System choices such as computer platforms, billing and accounting software, routing systems, and GPS are just a few of the issues that must be resolved so the new company can move forward successfully. Take the time to ask questions and avoid costly mistakes. In one of the sales scenarios described in this article, Company A bought Company B and all the administrative personnel from Company B were released immediately after the sale. Only then did the buyer realize that with different systems, no one was knowledgeable enough to convert the billing and invoicing system of the old company to compatibility with the one used by the new company. This resulted in lost revenue, delinquent invoices, unpaid bills, and upset customers. It also did nothing to build trust or morale after the sale. Final Recommendations In any company, employees are the heart of the organization. During the sales process, consider their value and their contributions to the success of the existing company as well as the success that they can bring to the new owner. In the end, new owners are really buying more than tangible assets. They are buying a brand and a set of customers, neither of which has much value without the employees. Negotiate your deal—and plan your transition activities—accordingly. v