When should I tell my employees I am selling?

There is no fixed rule for timing, but telling employees too early is a much more common mistake than telling them too late, and it is hard to undo once word gets out.

Why most owners wait

Uncertainty is what unsettles employees, not the fact of a sale itself. If you announce a sale that then falls through, which happens often, you can lose key staff who start job hunting, and you can unsettle customers and suppliers who hear about it secondhand. Most owners hold off until there is a signed agreement and a real closing date.

Key employees may need to know sooner

If the buyers financing or due diligence depends on a key manager staying on, or if that person needs to be part of due diligence meetings, you may need to loop them in earlier and ask them to keep it confidential. Weigh the risk of an early leak against the risk of a deal falling apart because a critical person was not consulted.

How the sale structure affects employees

In a share sale, employees generally continue with the same employer and their service and entitlements carry on without a break. In an asset sale, employees are usually terminated by the seller and offered new employment by the buyer, which raises questions about whether their service is treated as continuous. This affects entitlements like vacation pay and notice periods, so it is worth understanding before you talk to staff about what is changing for them.

Plan the announcement

Once you are ready to tell employees, plan what you will say about job security, pay, and benefits, and try to have the buyer available to answer questions if possible. A short, honest announcement, followed by a period where people can ask questions, generally goes better than a vague one that leaves people guessing.