“Private Equity Buying Your Employer? Resist These 11 Employment Negotiation Tactics”

Published on September 16th, 2014 by Alan L Sklover

“Some people, when they learn that two wrongs don’t make a right,
try three. ”

- Author Unknown

ACTUAL “CASE HISTORIES”: For many years I have counseled and negotiated on behalf of employees when their employers (a) are being purchased by Private Equity investors, (b) are owned by Private Equity investors, and (c) are being sold by Private Equity investors. I’ve also represented employees being recruited to work for Private Equity-owned employers, commonly referred to as Private Equity “Portfolio Companies.”

In the course of those efforts I believe I have learned a thing or two about the nature of Private Equity-owned employers, and the tactics they commonly use in employment negotiations. And, though I am a few years younger than he was, as Michelangelo said at age 87, “I am still learning.”

Sure, every Private Equity investor and every Private Equity Portfolio Company is unique. And, too, you can’t paint tens of thousands of people with one broad brush. That said, there are certain commonalities and cultural norms to be found in certain industries, and certain lessons to be learned in reflecting on one’s experience over decades.

On the basis of those decades of experience, I’ve assembled this list of “Eleven Employment Tactics of Private Equity-Owned Employers.” I present them to you in the hopes that, for you, “forewarned is forearmed” (although I have never seen a person with four arms – just kidding!)

I present these thoughts to you so that you are better able to see what is likely coming your way, and more capable and confident in navigating and negotiating your way to success and security at work – the foundational purpose of SkloverWorkingWisdom.™

LESSON TO LEARN: Is it any wonder that Private Equity investors – whose job it is to (a) locate a company to purchase, (b) purchase that company, (c) reduce its costs and increase its sales, and then (d) sell that company, (e) all with one purpose in mind – to make as much money as possible for themselves and their investors – tend to conduct themselves in similar ways? It should not be surprising at all.

Likewise, it should not be surprising at all that those with a short-term perspective, who engage in the buying, exploiting (in all senses of that word), and selling companies tend to act with short-term objectives in mind, not concerned with the long-term consequences of their actions on employees, communities and other stakeholders. Why worry about the long-term effects of your actions on employees, communities and customers, when you won’t be around more than three to five years? After all, “no one changes the oil in a rental car,” now, do they?

As employers of their “Portfolio Companies,” Private Equity managers do all they can to (a) lower overhead, and (b) maximize the company’s eventual sales price – for themselves and their investors. They don’t work for, get paid by, or care much for, others. With one goal in mind – “R.O.I., or Return On Investment” – why would anyone expect anything different?

Know who you are dealing with, and keep a sharp eye out for the “sharpie” Private Equity investors who are quite convinced that their access to large amounts of investment capital is a sure sign that God has anointed them as a segment of the human race above all others.

These 11 employment tactics that Private Equity investors use when purchasing part or all of employers are to be watched out for and to stood up to, as best you can. While there is no guarantee that you will be successful in negotiating with a Private Equity manager, or in resisting the changes they will inevitably insist upon, the more you know the better you will do. That is guaranteed.

Below we present 11 employment tactics of most Private Equity-owned employers, and the best steps we have found to resist their impact. As noted below, one thing you might do, right away, is to consider changing employers, or at least testing the waters, because that is your ultimate response to these tactics: seeking employment elsewhere.

WHAT YOU CAN DO: Keep a sharp eye out for these 11 Employment Tactics of Private Equity Investors: Continue Reading. . .

Sklover’s Thought for the Work Week

Published on September 15th, 2014 by Alan L Sklover

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“The sweetest sleep is during those extra morning minutes.”

– Anonymous Blog Reader

At work, at home, and elsewhere, enjoy what you have, no matter how “ordinary” it may seem. So much of life – indeed, life itself – is fleeting, fragile and extraordinary. Don’t wait until the last few minutes to appreciate how sweet it is. Just like the sweetness of those “extra morning minutes.”

© 2014 Alan L. Sklover. All Rights Reserved

[This wonderful quote was contributed by a blog reader who prefers to remain anonymous. If you would like to contribute a favored quote, saying or proverb, please submit it to us at info@SkloverWorkingWisdom.com].

On this Anniversary of 9/11 . . .

Published on September 11th, 2014 by Alan L Sklover

World Trade Rebuild

“When will those who seek only to destroy finally learn the eternal truth that people of good will, faith and tenacity just can’t be kept down?”

- Al Sklover

On this anniversary of 9/11, it’s a good time to pause and reflect. There is something eternal and inescapable that people of ill will just do not understand: you can’t keep good people down. Not if they have faith in their hearts, not if they have faith in their friends and family, and not if they have faith in their purpose. It is just not going to happen. Perhaps that is the truth that the evil-doers just don’t want to understand. But I have faith that, sooner or later, they will have no choice but to accept this truth, for the betterment of all.

© 2014 Alan L. Sklover. All Rights Reserved

Did You HEAR That . . . ?

Published on September 9th, 2014 by Alan L Sklover

There sometimes IS a free lunch, but there NEVER is an untaxed lunch.

Many employers, especially those in the high-tech, digital, social media and other “young industries,” have begun providing their employees with free lunches. They include Apple, Google, Facebook and Twitter.

It is said that the impetus behind this growing practice is the hope that it will (a) foster collegiality, (b) make it less likely employees will discuss “business secrets” in public places, and (c) by catering in-house, make the 20-minute lunch more common.

But hold on a minute . . . the Internal Revenue Code provides that employer-provided meals are taxable fringe benefit, just as are the free use of a company car and life insurance over a certain threshold. But so far, no one has been footing the necessary tax bill. Not yet.

Just last week the IRS and the U.S. Treasury Department announced that the taxation of employer-provided meals is a top priority for its auditing staff for this year.

Since employers are responsible for withholding taxes from employees’ paychecks, and few if any have done so for meals they have provided, it is expected that employers, not employees, will be asked to pay up for the unpaid taxes, applicable interest and imposed tax penalties. However, it is expected that employers will in coming years add meals into their calculations of employee income in coming years.

Seems ironic, at the least, that the IRS Is focusing its efforts on employee lunches, and raising no voice of concern about the fact that those very same companies are avoiding billions of dollars in taxes by incorporating themselves overseas, and by leaving their overseas profits overseas and not sending them to the U.S., and taking advantage of other tax loopholes.

Ironic, at the least. Perhaps it is that employee lunches have no high-paid lobbyists, don’t throw money at Congressional campaigns, and simply take care of basic human needs.

© 2014 Alan L. Sklover. All Rights Reserved.

Sklover’s Thought for the Work Week

Published on September 8th, 2014 by Alan L Sklover

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“If you understand everything, you must be misinformed.”

– Japanese Proverb

Oh, boy! There’s at least one of these people in every workplace, isn’t there? An expert on everything from A to Z, and back to A again. Don’t engage, don’t fret, don’t correct, don’t argue and don’t debate. You just can’t be right, now can you? At work and elsewhere, bear that in mind, and you’ll surely have a better day.

© 2014 Alan L. Sklover. All Rights Reserved

[If you would like to contribute a favored quote, saying or proverb, please submit it to us at info@SkloverWorkingWisdom.com].

Alan L. Sklover

Alan L. Sklover

Employment Attorney
and Career Strategist
for over 30 years

Job Security and Career Success now depend on knowing how to navigate and negotiate to gain the most for your skills, time and efforts. Learn the trade secrets and 'uncommon common sense' of Attorney Alan L. Sklover, the leading authority on "Negotiating for Yourself at Work™".

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