Tips for making a merger or acquisition easier for employees

On Behalf of | Oct 6, 2023 | Business Law

Growing companies often look to acquire other businesses as a way to continue expanding. Mergers might allow two businesses to go from relatively small players in the local industry to a leader in their specific niche. Acquisitions allow one company to acquire the talents and intellectual property of another.

Mergers and acquisitions can facilitate rapid growth for a company, but they can also make a previously-successful company much less stable. Employees often respond with skepticism to news of an upcoming merger or acquisition. Employers may need to take special steps to smooth that transition for the talent at both organizations, as a result.

How can organizational leadership help employees to more easily navigate a merger or acquisition?

Renegotiate or reaffirm contracts

Many employees will worry about the possibility of a job loss during a merger or acquisition. They may know that companies are at risk of failure after a major transaction like a merger. They may also have heard stories about workers losing their jobs due to downsizing after a merger or acquisition. Successful organizations often make a point of renegotiating contracts with top workers in different departments and reaffirming contracts with existing staff members to reduce the number of employees who leave after the merger or acquisition.

Provide team-building opportunities

Combining two different companies will often mean disrupting the dynamics within different departments of each organization. Companies may have vastly different cultures and operating practices, which makes it important to provide those merging into a new department or combining departments with an opportunity to get to know their new co-workers. Additionally, the company may need to make a formal announcement about new cultural priorities at the resulting organization so that there is less conflict and confusion about what practices will change and what will remain the same.

Engage in proactive communication

The more informed workers are about the progress of the merger or acquisition and the anticipated outcome, the more engaged they may remain with the process and the company itself. Notifying workers about the pending business transaction once it is official and then providing them with updates to previously reported timelines as the situation unfolds can help them feel more comfortable about their position at the company and its future likelihood of success.

Ultimately, proactively focusing on the comfort and well-being of employees overall can take some of the risk out of an upcoming merger or acquisition.

FindLaw Network