Not Every Part of a Business Has to Stay — But Your Values Should
Sometimes running a business means accepting something you do not particularly want to accept.
Not every part of the company should stay.
A division may no longer fit.
A service may need different investment.
A part of the business may be stronger under somebody else’s ownership.
You may need to simplify the organisation to protect the core business.
That is business.
But there is another side to that decision.
There are people underneath it.
Employees who have mortgages.
Families.
Careers.
Years of service.
Knowledge.
Relationships with customers.
And expectations about what happens next.
That is where selling part of a business stops being purely a financial decision and becomes a leadership decision.
Knowing What to Keep Matters Just as Much as Knowing What to Sell
One of the hardest things for an owner is separating emotion from reality.
You built it.
You invested in it.
You probably fought to make it work.
So the instinct is often to hold onto everything.
That is not always good leadership.
Sometimes a business becomes too complicated.
Perhaps one part no longer fits strategically.
Perhaps it absorbs management time without delivering enough value.
Perhaps somebody else could invest in it properly.
Perhaps selling it gives the remaining company the focus and capital it needs to grow.
There is nothing inherently wrong with that.
In fact, keeping hold of something simply because you cannot bear to let it go can ultimately damage everyone.
The question is not:
“Can I keep it?”
The better question is:
“Should I?”
Do Not Sell Your Soul With the Business
There is a phrase I keep coming back to.
Do not sell your company for your soul.
By that I mean do not allow the pressure of a deal to make you forget how you said you would treat people.
Price matters.
Terms matter.
Commercial security matters.
Of course they do.
I am a businessman. I understand that.
But there are things that should matter alongside them.
Who is buying?
What do they intend to do with the business?
Do they understand the people?
Do they value the knowledge sitting inside the organisation?
What happens to the employees after completion?
What changes are being proposed?
What will working there actually feel like six months later?
You cannot control everything that happens after a sale.
But you can ask better questions before one.
Employees Are Not an Entry on a Spreadsheet
During transactions it becomes very easy to start talking in numbers.
Headcount.
Payroll.
Liabilities.
Cost centres.
FTEs.
Those numbers are necessary.
But behind every line is a person.
That does not mean making an emotional decision instead of a commercial one.
It means making a commercial decision while remembering its human consequences.
Good businesses need both.
There may be occasions when jobs change.
There may be restructuring.
There may be difficult conversations.
There may even be redundancies.
Leadership does not mean pretending those possibilities do not exist.
It means dealing with them properly.
Fairly.
Honestly.
And as early as circumstances allow.
If Part of the Business Transfers, Understand the People Obligations
When a business or part of a business moves from one employer to another, TUPE — the Transfer of Undertakings (Protection of Employment) Regulations — may apply.
Where TUPE applies, employment contracts can transfer to the new employer together with continuity of employment and existing contractual rights.
That means the people element cannot simply be bolted onto the transaction at the end.
It needs thinking about from the beginning.
Good planning means understanding:
- Which employees may be affected
- Which employees may transfer
- What contractual rights need considering
- What information needs to be provided
- Whether consultation obligations arise
- What changes or “measures” are proposed
- What happens to employees who remain
- What knowledge and skills need to be retained
- What the structure looks like after the deal
GOV.UK provides guidance on how employment contracts are treated under TUPE, including continuity of employment and existing terms and conditions.
GOV.UK states that under TUPE the new employer takes over transferring employees’ employment contracts, including continuity of employment and existing terms and conditions.
Talk to People Before Rumours Do the Job for You
One of the worst things leaders can do during change is create an information vacuum.
People notice things.
Closed-door meetings.
Visitors they have never seen before.
Requests for information.
Unusual questions.
Management behaving differently.
Then the rumours begin.
By the time the employer eventually communicates, employees may already have invented ten versions of what is happening.
Some confidentiality around a transaction is unavoidable.
That is commercial reality.
But confidentiality should not become an excuse for poor communication once you are able or required to engage.
Where TUPE applies, affected employees need to be properly informed and, where relevant changes are proposed, consultation obligations may arise.
Acas recommends thinking carefully about how employees will be kept informed before, during and after a transfer.
That is not simply about legal compliance.
It is about trust.
People can deal with difficult news.
What they struggle with is being treated as though they do not matter.
Acas says both old and new employers have duties to inform affected employees or their representatives before a TUPE transfer, and consultation is required where expected measures will affect employees.
Do Not Forget the Employees Who Are Staying
This part often gets missed.
Everyone focuses on the people transferring.
What about those who remain?
If a division disappears, somebody may inherit additional work.
Teams may become smaller.
Managers may lose experienced people.
Responsibilities can move.
Relationships change.
The remaining workforce may start thinking:
“Are we next?”
That matters.
A sale can make perfect financial sense and still damage the remaining company if nobody plans what happens on Monday morning after completion.
Think about:
- Who picks up the remaining workload?
- Is there enough capacity?
- What knowledge is leaving?
- Which customer relationships need protecting?
- Who takes ownership of compliance responsibilities?
- Are reporting lines changing?
- What support do managers need?
- How will remaining employees be reassured?
Acas specifically recommends considering whether enough employees will remain, how workloads will be managed and how important knowledge and skills will be retained.
Acas advises outgoing employers to consider the impact on employees who stay behind, including workload, staffing levels, skills and knowledge retention
Keep the Knowledge You Still Need
People carry enormous amounts of organisational knowledge.
Not everything is written down.
Who knows the customer history?
Who understands that old system?
Who knows why a process works the way it does?
Who has the supplier relationship?
Who understands the compliance history?
Who knows what happened three years ago when something similar was tried?
If people are transferring out of the organisation, leaders need to think carefully about what knowledge the remaining business legitimately needs to retain.
A business should never be completely dependent on what one person happens to remember.
That is one of the reasons good HR systems matter.
Employee records.
Responsibilities.
Training.
Actions.
One-to-ones.
Documents.
Policies.
Employee relations activity.
Important business knowledge should not disappear because one person walks out of the door.
Do Your Due Diligence on the Buyer Too
Sellers quite rightly expect buyers to perform due diligence.
I think sellers should do some of their own.
Not simply:
“Can they afford it?”
Ask:
- What sort of business are they?
- How do they treat employees?
- What is their leadership culture?
- What experience do they have?
- What is their plan for the business?
- Are they investing for growth or simply acquiring revenue?
- What changes are they considering?
- How will they communicate with the transferring team?
- What will the employee experience look like after completion?
You might not control every future decision.
But knowing what you are handing people into matters.
Where TUPE applies, proposed measures affecting employees form part of the information and consultation process.
Those measures can include changes to working patterns, work location, pay dates, pension arrangements or possible redundancies.
Sometimes Selling Is How You Protect Jobs
There is another side to this.
Selling part of a company is not necessarily abandoning employees.
Sometimes it is the exact opposite.
Perhaps the new owner has more resources.
Better infrastructure.
More specialist knowledge.
A larger customer base.
Investment you cannot currently provide.
A clearer strategic home for that part of the operation.
Keeping something under your ownership when you cannot give it what it needs is not automatically loyalty.
Sometimes letting it go gives the employees underneath it a better opportunity.
That can be difficult for a founder or owner to admit.
But leadership cannot always be about us.
Do Not Confuse Loyalty With Refusing to Change
I believe strongly in loyalty.
To people.
To standards.
To commitments.
But loyalty does not mean freezing a business in time.
Markets change.
Companies evolve.
Some things grow.
Other things need restructuring.
The responsibility of leadership is not to preserve every structure forever.
It is to make the best decision you reasonably can for the future of the business and the people who depend on it.
Sometimes that means investing.
Sometimes restructuring.
Sometimes closing something.
And sometimes selling part of the company to somebody better placed to take it forward.
The important thing is how you behave while doing it.
This Is Where HR Belongs at the Table
HR should not find out about a transaction once the commercial agreement is virtually finished.
If employees are affected, good people advice belongs in the conversation early.
Ask:
- Who is affected?
- Could TUPE apply?
- Who needs to be informed?
- Who needs consulting?
- What employee information is required?
- What happens to contractual benefits?
- What happens to holiday?
- What about absence cases?
- What about ongoing disciplinary or grievance matters?
- What happens to training records?
- Who remains?
- How will the remaining structure work?
- What are managers going to say?
Those questions can become complicated quickly.
That is why HR should be part of business decisions, not simply the function asked to clean things up afterwards.
CIPD guidance reinforces the same wider point: employee relations and TUPE need to be managed deliberately when all or part of a business changes hands.
CIPD’s TUPE guidance covers planning before the transfer, deciding who transfers, communications, contractual issues and post-transfer arrangements..
Good Employee Relations Matter Most When Things Are Difficult
It is easy to talk about culture when everything is going well.
The real test comes when people are worried.
Business sales.
Restructures.
Redundancies.
Changes in leadership.
Changes in roles.
That is when employees judge whether the words written on the company values page actually mean anything.
Were people spoken to properly?
Were questions answered?
Was consultation genuine?
Were managers available?
Were decisions explained?
Was everybody treated consistently?
CIPD describes employee relations as the relationship between employers and employees, and good employee relations become particularly important during periods of organisational change.
CIPD’s current employee-relations guidance includes TUPE among the key legal areas affecting the employment relationship.
The Test Is What Happens to People When the Deal Is Done
A successful sale is not simply one where money reaches the bank account.
That is obviously important.
But I would ask another question.
What condition did you leave people in?
Did they understand what was happening?
Were they treated with respect?
Were employment obligations taken seriously?
Were promises realistic?
Was knowledge properly transferred?
Did the employees staying behind understand their future?
Did the transferring employees know who they were going to work for and what was changing?
Did managers behave properly under pressure?
Those things tell you a great deal about the leadership of a business.
You Can Sell an Asset Without Selling Your Values
Businesses change.
Ownership changes.
Structures change.
People move.
There is no point pretending otherwise.
Sometimes the right strategic decision is to sell part of what you have built.
Sometimes the right decision is to keep it.
Sometimes the hardest part is knowing the difference.
But whatever the commercial answer, there is one thing I would not negotiate away.
How you treat people.
Get professional advice.
Understand the employment implications.
Communicate properly.
Plan for the people transferring.
Plan for those who remain.
Do the due diligence.
Make the difficult decisions where they genuinely need making.
But do not allow a transaction to become an excuse for forgetting the standards you built the company around.
At Employee Passport Limited, we believe good HR should be practical, commercially aware and rooted in fairness.
HR should protect the business.
But it should also remind the business that there are people underneath every organisational chart.
You may decide that part of your company needs to go.
Your values don’t have to go with it.
Good HR Needs Clear Records, Ownership and Evidence
Business change becomes much harder when employment information is spread across spreadsheets, inboxes, paper files and individual managers.
Contracts.
Employee records.
Absence.
Training.
Performance.
Employee relations cases.
Actions.
Documents.
If part of a business is being transferred or restructured, having accurate information in one place becomes even more important.
Employee Passport is built to help SMEs keep that information organised, visible and accountable.
Your current Services page includes employee relations, investigations, formal processes, HR documentation and ongoing practical HR support.
Going Through Change in Your Business?
If you are restructuring, selling part of a business, changing responsibilities or dealing with a complex employee situation, getting the people side right early can prevent much bigger problems later.
Employee Passport combines practical HR support with employee management software, helping businesses keep contracts, employee records, actions, documents and compliance information in one place.
Our HR support includes areas such as employee relations, disciplinary and grievance support, performance management, redundancy and restructuring guidance, employment documentation and practical support for managers.
Do not wait until the deal is nearly complete before thinking about the people underneath it.
The current Employee Passport pricing page includes HR support covering employee relations, disciplinary and grievance support, redundancy and restructuring guidance, employment documentation and ongoing HR compliance.
