Exploring How Mergers Impact Employees, and Tips to Help Them Navigate

Mergers and acquisitions can strike fear in the heart of employees.

If you’re a fan of the show Mad Men, you’ll remember the sense of anxiety that hit the fictional Sterling Cooper Agency when word spread a London-based advertising firm was buying them. That feeling of panic once again hit the employees when yet another acquisition was announced, driving the show’s lead characters to take off on their own and create a new agency.

 

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It may be a fictitious show, but it really does speak to what happens when employees find out they’re going to be part of a merger or acquisition.

Ultimately what happens is companies come together, and if redundancies exist, they’re eliminated. This often means layoffs happen, and even if that’s not the case, job roles may change.

There can also be a significant impact on company culture. If employees are used to a culture that operates one way and suddenly they’re faced with something entirely different, it’s quite literally a culture shock. This can be difficult to avoid because every company is unique and has its own way of doing things.

Let’s take a closer look at how these events can impact employees:

  • Employees can feel helpless or as if their job and their entire career is being spiraled out of control when a big event like this happens. Employees are usually not part of the decision-making process, and they can quickly start to feel resentful or angry that they’re being swept up in a wave of action that they had no say in.
  • These feelings of resentment can also lead to general irritation or even depression, which can have a massive impact on morale and productivity. It can be difficult to go about business as usual when employees are feeling helpless or angry.
  • There can be a sense of mistrust among employees and company leaders. If employees feel like they’ve been kept in the dark there’s more of that resentment that bubbles up, deterring people from performing at their best level.
  • You may lose top talent. If employees feel like there’s a fear they could be fired, it might lead to the “dump them first” attitude. Even if employees aren’t fearful of being fired, they might leave simply because they’re unhappy with the changes taking place. Perhaps they don’t like the infusion of the new company culture.

When you’re dealing with these kinds of problems, it can be hard to keep business moving as usual, and you may end up not only losing employees but also clients. Research shows anywhere from 50 to 70 percent of mergers fail, or, at least, demonstrate poor results. The reason? Because the two companies didn’t have a smooth, successful integration. If a merger goes bad in terms of integration, it can take down even the largest of corporations.

So how do you manage your employees and guide them through a merger or acquisition in a way that’s productive, beneficial for all parties and is going to keep up their sense of morale?

Trust, Transparency and Communication

These are the three words that should be the foundation of your M&A strategy. They’re not negotiable if you want to avoid the risk of a failed merger.

Let employees know as quickly as you can everything you can. If they have questions you can’t answer at that particular time, say that. Don’t lie or give them the runaround. If people are going to have to be laid off to eliminate redundancies, be honest about that as well.

It’s going to be difficult to share some of the information with some employees, but ultimately if your employees feel like you’ve been consistently transparent, you’re going to have a better result and a smoother integration.

Leadership also needs to make its presence very known during this time. Leaders should be out and about, sharing information, sharing plans, and providing opportunities for employees to interact with them on a personal level and have questions they may have answered.

As part of being transparent, you may also consider creating a communication plan. This can streamline the process of getting information out there, and it can help your leadership avoid miscommunication or misunderstandings that can lead to a feeling of mistrust on the part of employees.

Face-to-face interactions should be a big part of that communication plan.

Give Employees a Say Wherever Possible

The last thing you want is for your top talent to feel like they’re somehow out of control in the workplace. Give them the feeling they have some say over some things, even if they don’t necessarily have any input into the decision to merge with another company.

Perhaps if there are areas of the business or projects that are going to significantly impact them, let them have some say there.

Wherever you can offer opportunities for input is going to be felt and appreciated by your employees.

Create Training Programs and Workshops

You want to avoid culture shock as much as possible, and one way to do this is through training. After all, you likely trained these employees in your own culture when they came into the business, so why not do it now?

Highlight key things like company values, mission, structure and vision. You want your employees to feel like they’re part of this culture and this mission, not just a bystander watching it from outside.

As part of the training you can also incorporate exercises that involve team building and interpersonal interaction.

Make Engagement Your Personal Mission

If you’re guiding employees through an M&A situation, act like a leader. Make it your responsibility and mission to keep employees engaged. Recognize them, communicate with them and provide them with a sense of stability in what can be a troubling time.

This is one of the most important times to let your leadership skills show, particularly if you want not only a strong, engaged workforce but also a successful merger.

March 18, 2016   Updated :November 16, 2016   mergers   

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