Merger Not Going So Hot? Maybe It’s Time To Look at Your HR Policy

A friend of mine is going through a merger at work. Or, I guess it is an acquisition (since they are much smaller than the other company).

And I know this is going to surprise some of you who have done this before, but it isn’t going so great.

What’s surprising is that it isn’t surprising at all. Mergers and acquisitions are a stressful thing for an organization. And it is one of those areas in business operations where HR often has a high touch, especially staff is transferring over.

The problem for HR? There are no easy fixes.

Suck it up, buttercup

I could relate to my friend’s situation, but not completely. While I’ve been a part of an acquisition before, I was on the side of the acquiring company. I was on the front lines watching employees who had been with the company we acquired for many years get thrown into a brand new situation.

Management’s message was clear to transitioning employees: suck it up. Why so harsh? Because almost everything was much better in the new company than the old one:

  1. Almost everyone received raises.
  2. They got better benefits that cost less money.
  3. They received more vacation.
  4. They were joining a more stable business.

It was a good situation to get thrown into because I’ve heard horror stories of people getting reductions in nearly everything. Yet, people still didn’t like the changes. Some left, and they left at a much higher rate than our existing employees. Others stayed but complained about minor policy differences.

But the biggest issue was the transition from a small, informal company to a large, formal organization. People were used to an informal bureaucracy that comes with working in a small business. They navigated it with ease when they wanted something as big as major changes to come to management’s attention, or, to getting the days off they wanted.

Ease of choices not included

It eventually got settled but not before we went through a lot of grief. Let’s face it though: most mergers and acquisitions aren’t like this. What is often the case is that the acquiring company has some better benefits, some worse, and some about the same. We in HR are then stuck with some difficult choices.

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Do we bring everyone up to the best of both benefits package? It’s the easiest to sell to employees but hardest to sell to management.

How about treating the acquired employees with the same benefits as they had before? A pain to administer and shows no love to your current employees if they are treated worse. Bringing everyone over to your benefits and pay? Easy for you but crappy for acquired employees if they take a hit in pay, vacation, or the cost of benefits.

So what will it be?

Consequences? Yeah, there will be some

Merging or acquiring a company by itself is no easy matter. Adding in the acquisition of existing employees is no walk in the park either. While it is easy to figure out the finances, assets, and debts of a company you are acquiring, the human “capital” part of it isn’t an easy call.

What doesn’t work? Fuzzy communication, inflexibility, and treating acquired employees as disposable or temporary. What seems to work okay is being transparent about the rational and being smart about what you compromise on and what you don’t.

That doesn’t mean everyone will stay. Even the best executed acquisitions have turnover associated with them. But it can make the people who stay glad they are with your company rather than jealous that someone else made a break for it.

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1 Comment on “Merger Not Going So Hot? Maybe It’s Time To Look at Your HR Policy

  1. Great to read an article on post merger and acquisition difficulties and the need to address employee concerns in order to achieve successful post merger integration, Just read an excellent white paper on strategies for successful merger integration http://bit.ly/pGoP25

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