Many owners highlight that their business is a great place to work by pointing to their employee retention. With pride they mention the number of employees who have been with them for more than twenty years and even the occasional thirty-year pin they awarded. If the workforce is large and this long-term retention applies to a small percentage of employees while there is a strong mix of ages among the rest of the team, this is truly a feather in the owner’s cap, a strong testament to the company as a great place to work. Think like the buyer; if the team is predominately older, especially in the management ranks, the buyer sees three potential problems:
First, a predominately older staff may indicate a lack of new blood or innovation. It may suggest the business is conducting business today the same way they did in the 1990’s without modern programs, apps or systems to reduce costs, speed production or increase sales.
Secondly, the buyers will wonder what these folks are thinking about their personal retirement plans? Are they going to retire shortly after the sale and leave the buyer in a lurch or will they commit to staying for five years?
Third, what happens if they stay, and given their age do not want to adapt, change or grow as fast as the new leadership needs them to? While letting them go is a possibility, letting go several managers who are over 55 years old is at least probable cause for an age discrimination inquiry.
None of these issues are in a buyer’s best interest and once again, the buyer may either walk away or want to make adjustments to their price for what they perceive as a potential problem. Ideally, the staff will be a nice bell curve of employees between 25 and 65 years old with some experienced talent in place backed up by younger members who are both ready to step in and suggest innovations to keep things fresh.