Ignoring the elephant in the room won’t make it go away, but it might be what pushes your top talent to leave.
It’s no secret that ownership transition is a hot topic in our industry. If you’ve attended any AEC conference in the past few years, you’ve undoubtedly seen plenty of content centered on ownership transition and succession planning. It’s a complex issue that is inextricably tied to workforce shortages, and one that has an even more significant impact on small to mid-size firms. As company leaders are approaching retirement age, many employees are left with the question of who takes the wheel once they’re gone.
The good news is that there are a variety of options available to firm owners. The less-than-ideal news is that there’s no one-size-fits-all approach that guarantees success. Not to mention it’s a sensitive topic that can breed uncertainty and fear amongst your employees if not handled well. Which begs the question – what can we do to address ownership transition to our people in a productive way?
- Make no mistake – no news is not necessarily good news. If you or the leaders in your company are in a position where you are starting to think about about ownership transition, it is undoubtedly going to be top of mind for your employees – whether they’re telling you directly or not. Engagement surveys such as Zweig Group’s Best Firms To Work For survey are great tools for collecting anonymous feedback on topics employees otherwise may not feel comfortable discussing. Keeping a pulse on the concerns of your people is critical in creating strong, consistent communication to staff about where you are in the process. In the absence of clear communication, people begin to invent their own narratives, which can lead to incongruous or detrimental messaging about the subject.
- Transparency without context doesn’t create understanding. As stated before, there are a variety of options available for ownership transition. Whether you’re considering private equity, internal ownership transition, an ESOP, or mergers and acquisitions – all of those options will create significant change and unknowns, which will heighten anxiety for your employees. While there will be plenty of things you can’t share under NDA, you can (and should!) educate your staff about the pros and cons each of these options offer. Are there any you’ve ruled out for certain, and why? Do your employees understand the significant investment needed to start an ESOP, rather than joining one that’s fully matured? Providing context helps to demystify ownership transition. It also empowers your employees to ask the tough questions and give you an opportunity to provide answers on your terms.
- Evaluate your options through a values-based lens. Along with your team that is focused on ownership transition, outline the factors that are of the highest importance when determining which route to take. How do they align with your core values? With the wants and needs of your employees? Is it important to you to have geographic expansion, or service expansion? What option will be most effective at helping your employees build their personal wealth? Once you’ve identified what is most important to you and your employees, create a framework with which to assess the options available to you. Being open about the things you value most with your employees will go a long way in building trust and help them understand what they can expect from an ownership transition outcome regardless of which route you take.
We will never be able to anticipate every worry or concern that employees will have around ownership transition – but we can be proactive in our communication, intentional with our transparency, and genuine in our reassurance that all options will be vetted through a lens of shared values.
Shelby Harvey is director of talent development and HR at BHC, Contact her at shelby.harvey@ibhc.com.