How to Manage Employees During An Acquisition
As the collision repair industry continues to consolidate, shop owners looking to sell, and businesses looking to acquire, will both need to manage how existing employees react to the move.
Matt Ebert, CEO Crash Champions, has tried to be careful and considerate as his company has expanded from just one shop in Illinois to more than 70 across seven states. Some employees choose to work for mom and pop shops to avoid big corporations, so when a company like Crash Champions comes in, Ebert says one of his top priorities is making sure the existing employees feel comfortable.
Ebert, who will be featured in an upcoming FenderBender Interview Series, offered some of his best employee-relations practices for shop owners who are selling and for businesses that are looking to acquire.
Messaging and timing need to be in line.
Through the many acquisitions that Ebert has made over the past five years, one problem that has popped up, which he says he's worked to avoid, is waiting to tell employees of a pending sale.
“Sellers would be nervous to let their people know what was happening, it would be a last-minute process of bringing them in and letting them know what was happening. That was never good,” he says.
So, whether you’re the shop selling or the shop buying, letting those employees know early in the process is pivotal. Otherwise, they will feel betrayed they weren’t told earlier, Ebert says. The worst thing that can happen is that employees learn it from a third source, diminishing trust in both the new and old owners.
Notifying employees earlier also gives them a buffer period to learn about the new company, talk with the existing shop owner, and gives them time to prepare for change, he says. From there, the first conversation between employees and the new company should be about pay.
“Usually that’s Question One for people. They’re concerned about how they’re compensated and making sure they’re not going backwards. The key is you have to have time to have [those conversations]," Ebert says.
Crash Champions sends an HR representative to newly acquired shops to go through any questions employees might have and to calm concerns about pay.
Make yourself visible.
Crash Champions has expanded quickly, but it still isn’t a nationwide brand. The company has a heavy presence in California and Illinois, but the surrounding states are just starting to become targets for the company.
For that reason, Ebert says he wants to make sure new employees understand what the company stands for. In his words, the company is not “a bunch of corporate guys.” Letting employees know he’s worked on cars since he was 16 and that he understands their day-to-day responsibilities, both for good and bad, he says, is important to him.
“It’s a small detail but it matters in the eyes of a tech or somebody who is fixing cars everyday," Ebert says.
Be transparent about change.
When a new company comes in, systems and procedures are bound to change. Be transparent about that, Ebert says.
“Change from their perspective is different. It might seem small to us, but it’s a big deal to them,” he says, noting something tiny like moving where a stapler is located is a change and needs to be considered.
There are very few changes that Ebert requires shops to make right away. Other than matching up their management systems, everything will happen gradually, and not everything has to perfectly match the other locations, he says.
“There are 'must do’s' and then there are things that aren’t as important. For those, we can give boundaries and let them do it how they are comfortable.”