Cubester® Chat: The Impact of Mergers and Acquistions on Young Professionals

by | Mar 17, 2019 | Articles

Mergers and acquisitions have been on the rise in the past few years and are only expected to continue to increase due to the current state of the economy. These transactions are oftentimes considered opportunities to grow businesses and strengthen their profitability, though they may not always be successful. The focus of the transaction is oftentimes on the execution and the numbers themselves, but there are always underlying impacts on the employees of the companies involved that may not be openly discussed, or considered at all.

When employees are first presented with a merger or acquisition, there will undoubtedly be an onset of a series of questions and emotions that come to mind. Employees spend most of their waking hours at their place of work, and suddenly everything they’ve known is turned upside down and there is a high degree of uncertainty in the air.

Employees will wonder about the new workplace environment, if they run the risk of being laid off, or whether their benefits will change, among other things. Not only will this uncertainty and emotions affect their productivity, but the uncertainty will likely lead some employees to resign instead of waiting to see if they will secure a position in the new structure once established.

What can companies do to soften or address the concerns of their employees? In order to do right by employees, it is important to keep them in mind before the transaction is finalized. Without competent and content employees, businesses are less likely to thrive.

It is important for companies to have a clear and beneficial plan for their employees during the transaction finalization process. Doing this will show employees that they are valued and that their well-being was considered, rather than just being an afterthought to a beneficial transaction to stakeholders.

Communication is key. Companies should be proactive and present the transaction and the execution plan to employees before they hear it from a different source. Informative sessions where employees can obtain as much information as is available at the time, about the companies and their jobs, will be beneficial for employee well-being and morale.

Employees should feel supported and communicated with not only for their own sake, but also in an attempt to avoid lack of productivity and increased resignations, though a certain degree of this is unavoidable in these situations. It will also be helpful to provide emotional support in these information sessions to help individuals work through their emotions. The more employees feel valued, the better.

What can employees expect if their company recently underwent a merger or acquisition? Unfortunately, the possibility of layoffs may be on the table after one of these transactions. The decision for layoffs, including which employees to keep and which to let go, depends on the needs after the transaction and finding the right fit for these.

Through testimonials, in some instances employees may be in discussions with management that may even feel like going through the interview process all over again, though it may not be intended to feel this way. Management may attempt to get to know employees, the roles they played prior to the transaction, and how these will fit their current needs.  Once management has finalized their organizational plans and evaluated the best fit, the news of layoffs or secure positions will be released.

In the instance that employees are laid off, severance packages are oftentimes given to the affected employees. Although experiencing a layoff is in no case a joyful experience, receiving a severance package will provide a fraction of temporary security to aid the individual during the transition.

If there are secure positions for employees, these may find themselves reporting to different management and responsible for new and different tasks, and even hold different position titles. In some instances, the new work structure will be better than the old, but there is no guarantee. At that point, the decision for what comes next is in the hands of the employee.

In a constantly changing economy, the best thing that employees can do is keep an open mind and be receptive to change. It is often easy for one to become set in their ways which makes it a challenge when faced with situations like these. Security is a valuable thing and when it is threatened, it can be hard to cope.

No matter the effect of a merger or acquisition on a professional, there are always resources available to help manage and deal with the challenges at hand. Change is inevitable and not always fun, but oftentimes it leads to bigger and better things that may not have been explored otherwise.

This article was originally posted for the Leading Edge Digital Magazine – Winter 2019 Edition.

Stay Connected