Rebecca Clake examines the issues with a merger or acquisition and what HR can do to maintain engagement and keep key staff using recent research from CIPD.
CIPD’s new report on mergers and acquisitions defines the employer brand as a ‘two way deal between an organisation and its people – the reason they choose to join, and the reason they choose to stay’. For employees finding themselves in a merger or acquisition scenario (where free choice about the employer brand is removed) change shakes this deal. And -as demonstrated by recent publicity about BA’s planned merger with Iberian Airways and speculation about the future of Cadburys- this is a situation many employees find themselves in.
Fifty-two percent of people who have been through a merger or acquisition actively thought about leaving their jobs. This was a striking finding from survey research carried out as part of the study by Bernard Hodes on behalf of CIPD. Interviews in organisations with employees (ranging from front-line staff through to senior executives) revealed the primary reason for this to be an emotional one. Time and again researchers heard individuals saying: “I find myself in a job I did not pick, working for an organisation I did not choose to work for”.
The high risk of disillusioned, talented employees potentially leaving the business will be a concern to senior management – and makes a compelling case for HR to be involved in at an early stage as possible in the integration process. Failure to pay attention to the employer brand can clearly derail the process. It’s all the more important to ensure that this important element of a merger or acquisition is managed, when we bear in mind a high proportion of these business transformations fail to deliver the predicted returns.
So, what can HR do to ensure to maximise the likelihood of success during a merger or acquisition? It’s important to remember the HR role is about far more than due diligence and legal compliance. Thinking about the employer brand can help us with maintaining employees’ motivation, trust and loyalty at this time of upheaval. It provides an opportunity learn from the experience of case study organisations including easyJet, Bank of New York Mellon, Morrisons, London and Quadrant Group and William Hill.
The key implications from our research for HR professionals to understand and consider are summarised below.
Research implications for HR – an overview
Assessing and managing culture
Our research recommends a pre merger/acquisition cultural audit, to help companies better understand the cultural landscape in advance of change. With strategic management of culture, we believe organisations will gain earlier returns on the transformation process.
The influence of hygiene factors on engagement
When an employee is trying to re-establish their deal as a result of this kind of change, the harder aspects or ‘hygiene factors’ are top of their priority list. The most important factor is salary and the security of a regular income. Convenience of workplace location (which may be likely to change) is also very important. It’s useful to bear this in mind when thinking about the information you communicate with employees, and the messages you want line managers to be passing on.
It’s important to think beyond the immediate operational issues posed by the integration. Integration plans tend to be short-tern and tactical. A longer term perspective is needed, which takes into account the need to realign cultures and behaviour as well as harmonising processes and policies.
Even though you may be dealing with uncertainty and ambiguity, you can never over-communicate. In the absence of communication, employees will fall back on assumptions or rely on the ‘rumour mill’.
Openness, honesty, transparency and authenticity are needed. Anything less will be quickly picked up by employee networks – both virtual and real.
It’s vital communication is two-way – think about opportunities for people to feed their views upwards and take a regular pulse of employee engagement during the integration period.
Speed and openness minimises uncertainty
The employer brand suffers when choice is taken away – and as a result it’s important to minimise the period of uncertainty. Moving as quickly as possible through the period of change and communicating realistically with everyone affected is imperative.
Managing change is a shared responsibility
Getting the top team right is clearly important when it comes to leading the change process. But we need to recognise that managing change is a shared responsibility. Managers have an even bigger role in period of major change. Their willingness and ability to support their teams can make or break ‘the employer deal’. Leaders need to provide a framework for the change – and then make sure there are tools, training and knowledge in place to follow the process through. HR has a crucial role in making sure that both managers and leaders have the skills and capacity to make change happen.
Rebecca Clake is adviser at the Chartered Institute of Personnel and Development
The Impact of Mergers and Acquisitions on Employer Brands is available at www.cipd.co.uk