Is falling unemployment a risk to your business, are you willing to let your talent go?
The latest figures show that UK unemployment is at a seven year low which has got to be good news hasn’t it? Well, it is becoming increasing clear that business owners in the UK are concerned around the availability of good people, and with less people out of work and available for selection businesses will look to head hunt or advertise to people already working, which could be your staff? News this week confirms that Employment in Chesterfield continues to rise month on month.
How are you ensuring that the high quality staff you have are motivated and committed to staying within your company rather than being attracted away? Replacing the best talent in your business is going to be more expensive than keeping what you have.
Coupled with the fact that general market rules would suggest that the lower the supply of labour will lead to greater the costs of wages, we are also seeing a lot of our clients looking to expand and as a result need more staff to cope. This amplifies the problem as the right people are not available and if they are they now cost more, all at a time when competitors may be looking at your best staff to recruit.
One method of retaining your key staff would be some form of share options which we have previously explored in our blogs, if however as an owner you are looking to take a bigger step back, key staff may be your ideal route to exit.
At Shorts we are seeing a rise in the ability to successfully fund and complete an MBO. If you are you looking to remain involved but take a step back a partial or staged vendor initiated MBO may be the answer. The key to successfully being able to complete this is by ensuring the second tier management team are sufficiently strong for an external investor to be willing to fund.
If the best people in your business are not motivated or tied in to your business, then offers at other companies could seem more attractive and you may find the MBO option is quickly lost. On top of this to make a trade sale attractive a strong second tier management team is crucial. Therefore losing the key people will not only impact operationally on the business it may also leave your route to exit looking precarious.
We have a vast experience at helping owners incentivise key staff as well a supporting vendor initiated MBOs, so if you would like to have a chat about the options and processes, please give us a call.
Tags: Corporate Finance
