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HR Issues in an acquisition

I am working with a client who has purchased (acquired) an existing small business and we need to decide should we terminate existing employees and then rehire them into the new business or is it better just to keep everything status quo for them. The business is using the same name ...but I think the FEIN number will be different. Also any advice on general HR transition would be helpful.

Answers

Topic Expert
Malak Kazan
Title: VP, Special Projects
Company: ERI Economic Research Institute
(VP, Special Projects, ERI Economic Research Institute) |

You can hire them into the new entity perhaps issuing offer letter packages. From transition perspective two key messages to convey is job security (try to avoid the work termination;) and what's in it form them to stay. Concerns typical will be around benefits, who their new performance manager will be, if they need to have new performance standards, and is the culture going to be different. Hope this helps.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

If I understand this, you not letting anyone go, just want to move them from Company A to Company B.

As Malak stated, if you basically spell out what is and is not changing, then you will eliminate a lot of worry and lost productivity.

If on the other hand you will be releasing some employees, then do it sooner than later, because the uncertainty will have very negative effects on the company.

Anonymous
(CFO) |

I'd think you'd be better off directing this to legal first.

If I understand you correctly, you're firm has acquired another. Most likely, the old firm ceases to exist as a legal entity and thus, can have no employees. The employees will be former employees of that entity and become current employees of the acquiring firm. No two ways about it.

Now, how you ease that transition to a new employer, new compensation packages and new employment rules is a separate and distinctly different question usually handled by HR.

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