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Mergers and acquisitions: How to avoid employee hostility

by , 23 September 2013
Many companies find themselves in the position where they're offered business opportunities which involve the acquisition of another company or a merger with another company. All too often, this process destroys company value and results in real and sometimes fatal damage to the business structure. But you can avoid this. Here's how to avoid employee hostility after a merger.

The most difficult thing to manage about mergers or acquisitions is the negativity and hostility of employees who are being brought into the company.

If you want to realise the value of buying a going concern, it's important to understand the psychology of the process.

How do you prevent valuable, skilled staff from sabotaging the purchase?

Here's how to prevent employee hostility during mergers or acquisitions

#1: Make sure employees are informed of changes to the company ownership before they find out from other sources

The media, customers and suppliers often seem to know more about your company than the employees who work there. But rumour and uncertainty destroys morale.

So make sure employees are always kept informed of developments within the company that could affect their positions. Rather let them know of possibilities which don't materialise than have them find out that a deal has been concluded which everyone else knew about, says the Practical Guide to Human Resources Management.

#2: Manage your staff and their attitudes towards the merger or acquisition

If you're making the acquisition, explain the reason for the deal and the benefits to your employees.

Never let employees believe they were more successful and that the company being taken over has in some way failed.

It's human nature for winning company employees to want to change the losing company's way of doing business. In doing this, they often give a clear message to the new employees that their previous business failed. This isn't destined to build a new team or improve morale.

#3: Engage with the new employees early in the process

Make sure you meet with the key employees (particularly those whose skills are critical to the success of the merger) early in the process and sell the deal to them.

You must know what opportunities you can offer them and introduce them to the rest of the team as soon as you can.

#4: Get the paperwork right

Make sure the paperwork is done correctly and employees are aware of their job descriptions and performance targets as quickly as possible.

Remember that their original date of employment with the former employer must be reflected in their letter of appointment and that their employment with you is unbroken.

This means they'll still be entitled to the benefits in your company that correspond with their service.

#5: Offer them a future

Plan the careers of your new employees with the company, arrange training and make sure they understand how valuable you believe their contribution to the company will be.

This process is vital when the company that's been acquired is a service company and the people are critical for the company's success.

Without them, you would have bought an empty shell. You need to make absolutely sure they remain with you.

#6: Don't take your eye off the business

The Practical Guide to Human Resources Management explains that sometimes the turmoil caused by a merger can absorb all of management's time and attention. They become so inwardly focused, they forget they're in a business to make and sell a product.

As a result, they lose value and very soon find that they have forgotten to make a profit.

So make sure the process is concluded as swiftly as possible so management can concentrate on their jobs and achieve results.



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