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The Impact Mergers & Acquisitions Have on Employees

Mergers and acquisitions can significantly affect employee morale and thus, performance. An impending merger can create a mood of uncertainty among employees and cause questions about their professional circumstances to arise. 

There may be a lack of trust in the company’s leadership and a breakdown in communication within the organization. Change can be scary in any circumstance, but taking proactive steps before the merger can shore up crumbling employee morale and ensure that productivity is minimally impacted. 

Management’s Role in Mergers and Acquisitions

Showing gratitude for quality work goes a long way — and not just during an acquisition. Managers should recognize their top-performing employees and acknowledge good work done.

Involving employees in decision-making processes as much as possible increases the individual ownership each takes in the project. Many of your employees have a great depth of knowledge and experience in their purview and may be able to help make decisions that can lead to a better result. 

The more employees are involved in each project, the more engaged they are.

Senior management should be held to a higher standard of getting employees involved and increasing engagement. Some companies may benefit from introducing penalties for senior managers who aren’t as proactive in increasing employee engagement. 

Sometimes, a stick can have better results than the vague carrot of “better employee morale and production.”

Communicate and Be Transparent

Your employees aren’t stupid — they can tell when the leadership team is being transparent about potential changes from a merger and when they are being opaque. 

Even if the management team is delivering bad news, doing so straightforwardly can go a long way toward increasing employee trust. If you are unable to give much information during the process, simply being upfront about that is essential.

Sometimes, team-building exercises or training sessions can help during the merger process. For disparate teams that will be blended with others, getting the new team members together for joint training sessions and allowing them to get to know one another is important.

Implementing change management strategies can ensure a more seamless transition, and your company may benefit from professional help in this area. 

The merging companies may have different company cultures, so it’s important to reiterate the values, purpose, and mission statement of the projected new entity to all team members. 

How communication, trust levels, and dealing with interpersonal conflict are handled can go a long way toward making the successful merging and integration of employees easier.

The Importance of Organizational Culture in a Merger Situation

The overall company culture greatly impacts the success of a merger or acquisition. If the two merging companies have a similar organizational culture and approach to management, then there’s a better chance of more successful integration. 

However, if daily business practices differ too much between the companies, then there’s a good chance that the division between employees will cause productivity in the new entity to drop.

Sometimes, merged companies may benefit from a complete overhaul of the company culture, restructuring of how projects are completed, and even changing company policies and best practices. 

When senior management is open and transparent about changes and how things will look moving forward, it can increase trust for all employees. The new organization may need to create a culture where reorganization and change are encouraged and, again, seek employee participation in the decision-making process. 

Company culture can either hinder reorganization or facilitate it, and it’s the duty of senior management to lead by example and initiative.

A Business Law Firm Can Help

If you’re planning to have significant company restructuring during and after a merger or acquisition, trust the legal team at Woods Lonergan to help ensure that your new policies are compliant with New York State employment laws. Contact us today to learn more.