Signs Your Company is for Sale and What That Means for You

News that the company you work for is being sold can come off as quite a shock. And what’s paralyzing about the experience is usually the timing. Companies don’t traditionally inform employees who will not play a leading role during the transition until closer to the end of the process. This gives its leaders an opportunity to manage the process in a way that protects the company from the repercussions of fear, resentment or lack of productivity that can sometimes develop among employees.

Consider the leadership teams, investor’s or owner’s perspective and you may be able to empathize with this logic. Regardless, it probably doesn’t make you feel any better. Working for a company that could be facing a merger or acquisition can understandably cause some anxiety about your future. If you want to be proactive and transform this potential threat into a catalyst for your career, being able to identify a few signs that your company is for sale is the first step.

Signs Your Company is for Sale

1. The company is private-equity owned or venture-capital-backed, and the investment was made 4+ years ago.

Most institutional investors in the U.S. invest on a 5-8 year horizon, 5 year-median for acquisitions and 8.2 years for IPOs.  It’s the nature of the game. You can almost always expect a company of this nature to be sold at some point. The investors invest with the sole purpose of transforming the company into an entity that provides them with a major return in the shortest period of time possible. They create a dynamic environment subject to a constant state of change. And while it’s common for employees to feel as though they never know what to expect, one this is always certain: an exit.

2. The company is a subsidiary of a larger company, and the parent is beginning the process of separating duties.

Perhaps the parent company processes payroll for all of its subs but is now expecting your company to process its own. If dispersing duties that used to be done for you becomes a pattern, it could be a sign that the parent is preparing your company to stand on its own. Independence makes a sub much more marketable to potential investors.

3. There’s a hiring freeze and replacements of departing co-workers are not approved.

Have you noticed that the last two managers who resigned were never replaced, only to have their workload absorbed by existing employees? Once a company is sold, there’s usually a huge shift in management and restructuring is prevalent. So choosing not to fill open positions makes sense to owners as they don’t want to put effort into hiring a candidate whose time with the company could very well be short-lived and the open positions make the bottom line more attractive.

      4. Realized economies of scale are reversed.

When a company begins to reverse some of the strategies it implemented to increase profitability and growth, it’s a red flag. There’s clearly a new strategy at work. Your best bet is to find out why. There could be numerous reasons, and a possible sale is one. Stay updated on the current happenings within the company and industry as a whole. This makes it easier to put the puzzle pieces together.

5. Money is taken out of the sales compensation plans across the board.

Any major budget cuts are cause for concern but especially those that affect personnel who drive revenue. When a company begins to focus on its bottom line at the risk of increasing tension among employees, there is definitely a reason. You may notice a freeze on pay increase, annual reviews, training, etc., as cost control a top priority.

6. There are more closed door, top-secret “C” level meetings and trips.

You may begin to see unusual faces in the office. Executives who usually visit once a year may stop by four times in one month. New faces may surface as potential investors scan the office. And your boss may be travelling a bit more than usual, no longer being as open about his whereabouts.

Be mindful of any change in tone and/or attitude among executives. In the event of a looming sale, their demeanor very well could be different.

Position Yourself Before The Sale

When you come to terms with the idea that your company is being sold or will be in the near future, it can be daunting. However, it doesn’t have to be. Accept the fact that you have no control of the sale, and it will become easier to decide what you need to do next.

Much of that depends on your career goals. Although acquisitions have their challenges, they can also bring forth tremendous opportunities for growth. If you are willing to embrace the new changes, you can be at the forefront of them, which can help you evolve into a star candidate.

Take on more duties and learn as much as you can to be of value to the new owners. Position yourself to be a top resource who is well-rounded and ready to help the company transition successfully. And last but not least, show genuine interest in the new owners’ vision. Having a good attitude and a willingness to learn will give you a much greater chance of receiving an important role during the transition and after.