You walk into the office with your workday all planned. Then you turn on your computer and read the e-mail titled “Greetings” from your CEO. It states that your company will merge with its competitor.
Suddenly, a big job now looms ahead of you—communicating to the organization’s employees what will happen to their benefits and compensation programs.
If you are a business communicator who is already familiar with this area, you are ahead of the game. If not, you may need to call in outside help. If that’s not possible, get ready for a steep learning curve.
What you can expect
To build your knowledge of the merger, you need to attend the many meetings that will be held by your company, as well as those held with your company and the company it will soon merge with, in order to determine what benefits and compensation programs the merged company will have. While some issues will quickly be settled in the meetings, others may not be decided for many months.
When people from the two companies disagree on issues, decisions will usually be made in favor of the acquiring company, or according to what the new CEO will approve.
The other company may not have professional communicators for this area, relying instead on lawyers and benefits experts. Their communication style may be legalistic, while yours may be more informal and understandable.
You may also have contact with:
- An outside communication firm retained by either company.
- A financial planning firm called in to help employees prepare for early retirement.
- The publishing house for the merged company’s stock prospectus.
- The brokerage firm chosen to handle employee purchase orders for the merged company’s stock.
Whether you are working alone or with other lawyers or benefits experts, there are certain guidelines you should follow when communicating benefits to employees.
Communicating to employees
Make clear to employees which benefits and compensation programs are changing and which aren’t, and what has been dropped or added.
Be up-front with employees; let them know which issues are still being decided. Outline the current state of each benefit, as well as any interim state and the future state. Explain the business case for a reduction in a benefit. Employees may not like it, but they can accept it if it makes business sense. Balance this with how other benefits are being improved.
Highlight new rules that can affect a person’s benefits, such as different eligibility requirements.
Provide a calendar to tell employees when and how they will be kept informed.
Explain in advance why a special mid-year benefits enrollment may be required in addition to the normal annual fall enrollment.
Provide a way for employees to ask questions, such as an e-mail address and a company intranet site for posting answers.
Make sure your legal department and the appropriate vendors approve all communications.
Which of the following will you need to communicate?
From country to country, companies vary in the benefits and compensation programs they offer. The following are more or less common in the U.S.:
- Life insurance/dependent life insurance
- Accidental death and dismemberment
- Health care spending account/dependent care spending account
- Employee assistance program
- Prescription drugs
- Savings plan or 401(k)
- Pension or cash balance plan
- Severance pay
- Legal services
- Vacation buying
- Adoption assistance
- Long-term care
- Financial planning
- Profit sharing
- Employee stock ownership plan
- Stock options
- Target achievement bonus programs
- Variable compensation
You may also need to explain new concepts. For example:
- Why the merged company will put a cap on how much it pays for rising benefit costs.
- How current funds in the savings plan will be exchanged for new funds during a temporary blackout period.
- Why employees will own “units” of company stock in the savings plan instead of shares.
There will also be specific audiences to address, including:
- Employees opting for early retirement
Their benefits may now be different if they retire after a certain date.
- Newly hired employees
After a certain date, some of their benefits may differ from those of other employees.
They may be the real decision makers within many families. E-mail may not reach them; letters or newsletters mailed to the home have the greatest chance of being read.
Reach them through newsletters, letters, meetings in major locations and your call center.
- Survivors of employees and retirees
Letters can inform them about medical, life insurance and pension benefits, as well as their accounts in the company savings plan.
How will you communicate?
The merger process could take up to a year, so plan on a series of ongoing communications. Depending on company culture and regulatory requirements, you may use one or more of the following:
- Letters, newsletters (printed or online), brochures
- E-mails, web sites, podcasts
- Material modification notices
- Updated summary plan descriptions
- Special half-day or full-day seminars
- Company and vendor call centers
- Personalized benefits and compensation statements
How do you keep track of all these variables?
Use several planning tables or one master table. Within the columns, date and log each meeting’s discussion about items such as:
- What is being proposed.
- What is “grandfathered” (a protected benefit for current employees).
- Who has the responsibility to get more information about an issue.
When firm decisions have been made about a benefit, use colors or bold face type to highlight that decision. And don’t forget about yourself. You should send out your résumé when you first hear of the merger. If you are later asked to stay with the merged company, consider:
- Is the communication staff being enlarged or reduced?
- Are they professional communicators? Do they have knowledge of benefits?
- Do you need to adapt your communication style to that of the other company?
Once you have these answers, they’ll help you decide if you want to stay or go when other job offers come your way.