It’s a fact of life that organizations go through cycles of growth, stagnation and reassessment. In order to improve its overall performance, an organization may decide to merge with another to achieve a competitive advantage within a given industry. As the business world becomes more global, chances are there will be an increase in the number of mergers, many of which will combine organizations in similar industries, but with employees who do not share a similar cultural background.
The term merge indicates that some type of blending takes place, that the organizations involved in the business transaction emerge as a stronger and more economically viable business. However, employees often feel a sense of loss of status, identity and control which can also lead to losses in productivity.
Before a merger takes place, due diligence is usually conducted to determine the assets and liabilities of the parties involved. Potential for post-merger growth is predicted, and if the results are favorable, the parties move forward. Unfortunately, the issues that concern employees seldom play a vital part in this assessment process.
While employees are the strongest resource of a newly merged company, they can also become a liability if ignored. Merging companies must identify the issues important to employees and develop appropriate communication plans to address key concerns. These plans should be part of the negotiating process during the merger.
A primary concern of employees is whether or not they will keep their jobs. Each employee’s job functions and technical skills should be thoroughly reviewed. While retaining duplicative job functions is not a viable alternative, moving or retraining capable employees can minimize the disruptive nature of some mergers. In the event that there may be layoffs, a specific plan of action should be developed for affected employees.
Another concern that must be addressed in this stage is a shift in employee benefits. One of the residual advantages of merging two organizations is that with an increase in the number of employees, there may be more favorable rates for various types of insurance that the organization offers to its employees. However, one of the groups is likely to lose its existing system and be required to adapt to new policies, which can be inconvenient at best. At other times, there is a reduction in the employees’ benefits as part of the merger, and this issue also needs to be addressed.
The organizational culture for all the parties involved in the merger should also be assessed. In the long term, this knowledge can be the key to moving through the transitional stage intact. By gaining familiarity with the organizational culture, communication processes and networks, management will be able to develop plans to communicate changes in the most effective manner.
While we often talk about the appeal of changing some things in our lives, research has shown that we resist change when it is thrust upon us. Typically, employees affected by a merger have not had a voice in the merger process and have had no control over the situation. However, they can still be kept informed.
Information is a powerful tool; without it, people tend to query their peers and often reach conclusions that may or may not be accurate. This activity takes up valuable time and can affect how well existing organizations adapt to the newly formed organization.
For some employees, there may be no impact at all on their day-to-day work lives. Others might be moved from one job to another, retrained in how to do a new or existing job, and will need to adapt to a new set of coworkers and regulations.
Communication needs to start as soon as the decision to merge has been reached, and it should continue through the integration stages. A unified message must be communicated across all layers of the newly formed organization. Information about what will happen, when it will happen and why it is happening can go a long way in alleviating the fears that typically arise when the rumor mill goes into high gear. Employees should have opportunities to ask questions and should be given truthful answers. Managers should follow up when they cannot answer a question right away, and provide the relevant information to the interested parties.
The key to a successful merger is to remember that the goal is to combine the best practices from both organizations, which requires effective communication with all the employees. Proactively identifying employee issues and concerns through a pre-merger assessment helps to identify the best communication channels and tools to address these issues, resulting in a stronger organization.