Maintaining Employee Morale and Retention During M&A Transitions
- This topic has 14 replies, 15 voices, and was last updated 1 week, 2 days ago by
.
-
Posts
-
What are the best practices for keeping employee morale high and minimizing turnover during the integration phase of a merger or acquisition? Discuss techniques and share success stories related to employee engagement and retention.
Hi Dana,
Many years ago, the company I was working for was acquired. Initially, this was a scary, confusing, and tense environment. However, after some time, management discussed with us what the plan was and set expectations. For the group, I was in (FP&A), some of us were needed for the post-merger integration, and others were not. Fortunately, as a group, we discussed what each of us preferred. Some wanted to leave right away. Some wanted to stay for a medium term. Some, including myself, wanted to stay through the integration (for the experience and the nice bonus). Unfortunately, this is not a typical scenario. The key is that employees want clarity and guidance early on. Management needs to communicate early and often to keep employees up to date and set expectations. Management must also listen to feedback so that employees feel heard. The communication should be in both a group setting and in 1:1’s.Peter
We have found that having open communication and visits are key. Coming from a large organization, it can be very scary to be acquired and most employees of an acquiring company really just want reassurance that they will still have a job. Ways that we make employees feel part of the team and that they are needed are that we go to the site early and give swag bags (this puts a mental note that we are spending money on the employees, why would we do that if we were going to fire them), we immediately start discussing comp and ben plans and how we will bring them in as soon as possible. If their comp and ben is better, they get to keep it. Another way that we retain employees is by doing a two step approach to integration, we leave the company “stand alone” for a couple years as part of our huge organization before we move them into our more complex systems like our ERP and physical plant moves.
open and honest, a great starting point. Employees need to be brought along for the journey and a clear “what’s in it for me” should be articulated based on team/role. key synergies need to be advertised and articulated how each member can contribute. The key employees need to be identified and incentivized to stay, they should be designated the change champions and be a key part of the PMI strategy.
• Transparent communication – Success story is the Cadbury matter and the Cisco acquisition.
• Involve employees in the process.
• Form cross-functional integration teams
• Regularly solicit feedback from employees and incorporate their suggestions into the integration plan
• Conduct cultural assessments to understand the differences and similarities between the merging companies’ cultures
• Organize workshops and team-building activities
• Offer retention bonuses to key employees to encourage them to stay through the integration period.-Open and transparent communication at all stages of the integration process,
-Communicate strategy, goals and vision for the acquired company: People want to identify with the company and their vision
-Seek personal communication with the employees, listen to their questions, concerns and even suggestions
-Identify the key personnel and opinion leaders in each department
-Start the post merger integration right after closing, don’t waste time. The longer employees are left in uncertainty, the earlier they will decide to leave.I have seen success when the clear future direction, as well as the expectation, are communicated by the leadership following the closing when the anxiety is high, and then followed up soon after with set of actions, whether it be a retention plan or severance plan or marketing plan or otherwise. Lacking either of the two will undermine the attention and loyalty of the employees. Naturally, once the deal is announced, all employees are targeted for recruiting by the competitors, so involving key members into the process to make them feel part of the new era would also help in my view.
I’ve observed plans that include assigning executive peer partnering to help build and maintain relationships at the senior leadership level. They also include effective coaching, mentoring, and team-building activities to engage merged employees so they quickly build new relationships and feel a part of the team. The acquiring company’s teams should be engaged so they have awareness of the change and consider how the acquired employees should be made to feel a part of the team as quickly as possible.
I’ve not covered the PMI modules yet, but from my corporate experience and the acquired startups I’ve been involved in, one of the biggest issues will be overcoming the cultural differences between the two entities involved. Depending on their size and the overwhelming need to not mess up both, I can imagine one tends to dominate the other. A very well thought comms & change plan, with everyone ending up full of motivation and avoiding creating “fear” and “disengagement” has to be one of the most critical parts of the merger strategy, once the ownership games have been played out.
– Providing employees with visible career advancement paths in the newly merged organization can help alleviate concerns about redundancy and job insecurity.
– Establish a clear post-merger organizational structure that outlines new roles and career trajectories. Implement career development initiatives, leadership training, and mentoring programs to illustrate potential growth opportunities within the new entity.I think an often overlooked part of maintaining employee morale and retention during the M&A transition is the selection of appropriate integration leads. The integration leads not only lead the transition for are paramount to maintaining employee morale and retention during M&A transitions. These individuals play a crucial role in bridging the gap between the two merging organizations, fostering a sense of unity, and ensuring a smooth transition.
A robust communication plan is crucial from the closing date, including:
– Leadership monthly townhall meetings with a Q&A session at the end
– Initiate surveys for employees, and responses should be analyzed and actioned. Followed by feedback to make sure the employees feel they are heard.
– Cascading the leadership message about the transition plan in a consistent way to the employees
– Give options to employees to decide their career path through a structured carer planning program
– Clear roadmap of the transition phase with transparency to present the challenges and risks to employees.Hi Dana, great topic!
Maintaining employee morale and minimizing turnover during integration is challenging but crucial for a successful merger. Best practices I’ve observed include:
• Clear Communication: Consistent, transparent communication is key. Employees need to understand the goals of the merger and how it affects them. Regular updates, town halls, and Q&A sessions can help reduce uncertainty.
• Retention Plans: Offering incentives such as retention bonuses or career development opportunities can help retain key talent.
• Involving Employees Early: Employees should be engaged in the integration process. Involving them in decision-making or assigning them roles in integration teams can make them feel valued and more secure.We have found that open communication with all employees has held with employee morale and retention. We have often utilized retention bonuses and focused on demonstrating the career development opportunities to assist with retaining key talent.
- You must be logged in to reply to this topic.
