The A/E industry is a people-based one. Accordingly, the long-term success of a merger or acquisition hinges largely on how well the combined entity retains its staff. Get it wrong and the firm’s value can evaporate by the day as key acquired employees run for the exits. However, get it right and employees will not only stick around...they will also ‘buy in’ to the transaction and be motivated to excel after the closing.
For this week’s article, we’ll assume that you have the basics of employment agreements and retention bonuses covered for key folks. Instead, we’re talking about some of the more anecdotal tips that can often get overlooked for the broader employee base. With that, here are seven tips how to prevent the upheavals that can arise with a transaction:
- Act fast. Don’t allow rumors to spread or leave employees worrying about the transition. Get out there as quickly as possible with ‘town hall’ meetings and open channels of communication.
- Make a plan. During the course of a merger, and before signing the deal, develop a clear plan for handling your people and aligning benefits. If stories don’t match among firm leaders or employees sense that you are stumbling through it, the outcome won’t be good.
- Define a new direction. Give all employees a role in figuring out certain elements of how the combined firm will evolve and grow. Get them involved in (and excited about) setting a vision for the new organization and developing a road map of what the new company can achieve.
- Find and promote winners. To help employees cope with the transition, choose managers who radiate confidence and credibility to be advocates for the transaction.
- Level with people. Don’t procrastinate giving employees bad news. You’ll risk losing trust and increasing anxiety.
- Share some history. Tell employees what has happened after past mergers and acquisitions to assuage their fears and anxieties.
- Develop a contingency plan. Despite your best efforts, you must be prepared to see some employees leave. Planning for this before the fact will help you fill vacancies more efficiently and with better qualified people.
As you can likely see, none of this is particularly complex and it really boils down to comprehensive planning and effective communication. But, that doesn’t mean it will all be easy. And, remember that, even in a sluggish economy, the best employees have options and quick-thinking competitors will see a transaction as an opportunity to lure them away!
