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Four Ways You Can Soften the Impact of an M&A for Your Employees

April 24th, 2019 | 3 min. read

By Mike Shaeffer

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When we read headlines about mergers and acquisitions (M&As), the focus is typically on dollars and cents (billions of dollars, potentially), the impact on the consumer, and projections about the potential success of this new powerhouse in the marketplace.

What is missing from the stories is the impact of these alliances on the day-to-day lives of employees. Behind-the-scenes the impact is highly personal, and can be unnerving.

Despite their best intentions, even the C-suite may not fully appreciate the ripple effect of an M&A on employees at every level of an organization. While the executives are busy popping champagne, employees may be left wondering if they’ll have a job or feeling anxious about reporting to a new manager. Employees may be commiserating at the water cooler over frustrations about leaving the pediatrician their children have been seeing since birth, or having to find a new orthodontist because of a change in benefits.

Organizational Change and Workplace Stress

How HR handles the impact of a merger or acquisition on frontline employees has a significant effect on whether or not it’s a successful partnership.

According to the American Psychological Association’s 2017 Work and Well-Being Survey, “workers experiencing recent or current change were more than twice as likely to report chronic work stress compared with employees who reported no recent, current, or anticipated change (55 percent vs. 22 percent), and more than four times as likely to report experiencing physical health symptoms at work (34 percent vs. 8 percent).” Stress leads to illness, illness can mean lost days of work, which all impacts organizational productivity levels.

If you manage HR, chances are these changes are creating some anxiety for you too. Not only is your day-to-day potentially changing, but you’re now burdened with ensuring employees feel optimistic during this transition. The good news is you have the power to crush the chaos and become the Commander of Calm in this time of transition.

Recently we talked about how M&As will impact your payroll function; this week we’ll tackle how to prepare for the core HR changes they bring.

Calming the Chaos During an M&A

Thoughtful planning and messaging is vital to a successful transition in any merger. Here are four ways you can turn apprehension into optimism:

  1. Realign your resources. You may have identified staffing redundancies that require lay-offs or reassigning staff to new responsibilities. The sooner you can communicate these changes in a respectful manner, the better. You may need to create a development plan for staff who have changing roles, including preparing managers to spend extra time training affected employees.
  2. Ponder your perks. If you’re with the purchasing company, assess the benefits of the acquired company to see if their pension plan is sufficiently funded and determine any costs associated with continuing to offer both health insurance plans, or the cost to switch acquired employees to a new health plan. This is also a good time to review your current health plan and determine whether it fits the needs of the employees joining your company, especially if they are aging or have chronic health conditions.
  3. Ease into it. Consider phasing in benefits changes that will impact employees. Allowing employees to keep their current health insurance plans, previous PTO policies, and retirement plans for a predetermined period of time (maybe until open enrollment) makes the transition less jarring.
  4. Get ahead of the story. Most mergers are discussed behind closed doors for months before employees are in-the-know. Once you’ve made an announcement to your employees proactively communicate any HR-related changes—otherwise the rumor mill will have the first word. Schedule meetings and trainings to inform everyone about any staffing, benefits, and policy changes resulting from an M&A. Be prepared to answer tough questions. (If you don’t allow them to be asked they’ll be asked in whispers among people who likely don’t have the best information.)

In Your Corner

Having been through an acquisition we know that transitions can be hard. We like to come alongside our clients and give them the tools to make core HR, like managing benefits and PTO, easier. Whether you’re anticipating an M&A, or just looking to streamline your payroll and HCM, we’d love to offer you a free 30-minute assessment. Schedule it here.

Stay tuned for our next post on how to offset the “culture clashes” that can come with a merger.