With Verizon announcing its intention to gobble up AOL, AT&T going after Directv, and rumors flying about Microsoft and others looking to acquire Salesforce, it’s clear that M&A activity is alive and well.
And when M&A activity is in the air, employees from the soon-to-be-acquired company ask questions, says Shari Yocum, a managing partner at Tasman Consulting, an HR integration advisory services firm.
Yocum, who served as an executive at Cisco Systems, where she led the tech giant’s HR Mergers & Acquisitions organization, explains that whether a company is a serial acquirer or going through its first acquisition, the potential to experience employee fallout can be disastrous without a thoughtful approach to managing employee questions throughout the process.
"The talent base that exists within the acquired company is usually a significant value driver in deciding whether to purchase a company, therefore it should be a top priority to retain that talent to get the best return on your investment," she says.
Once the deal is announced, the questions start. These potential employees immediately begin to assess their own worth in the current company and question whether they will have a role in the new company. Rumors will run rampant and they will begin to turn to their internal network to try to get more information, and most of the information they get will be inaccurate.
"It is extremely difficult for employees to stay focused when issues that directly affect them are unresolved," Yocum says. "Remember, these employees did not ask to be acquired. Everything they know is about to change, and let’s face it, not everyone thrives on change."
Addressing the questions plaguing potential employees can head off serious productivity issues that degrade the value of the company being acquired, so the sooner they are answered, the better.
Youcum offers the 10 most commonly asked employee questions:
Will there be a job for me in the new company or will my position be eliminated?
If my position is eliminated, will I receive a severance package?
Will my role and responsibilities change?
If my role changes and it’s not what I want to do, what other options are available to me?
Will my pay change (base compensation, bonus, commission, etc.)?
How will my benefits be impacted?
What will the new org structure look like?
Will I report to a new manager or department?
What is the culture of the new company and will it be a fit for me?
Will they keep my office open, or will they require me to commute farther or relocate?
Yocum says depending an acquiring company’s size and reputation, some may be excited to become a part of the new organization; others may "grieve the loss" of the company they have been working to build and may not know where to place their loyalty.
So how should you answer these questions? Yocum outlines several strategies. For example, it may take some time before you are able to fully answer all of these questions, so you need to make sure you have a detailed communication plan.
Also, be open and truthful; if you don’t have the answers yet, let them know when you will. And be clear and concise with communications; don’t leave things open to interpretation.
"Being timely helps in trying to stay ahead of the rumor mill," she says. "If you have a communication calendar, stick to it. And if details you planned to discuss are still unresolved, say so."
Other ways to answer include being empathetic and caring, because some people will weather the changes better than others—after all, you are affecting their livelihood.
Then, be flexible when it comes to communications. Holding company meetings, one-on-ones and Q & A’s and having a point person to field questions are some ways that this can be accomplished.
"By being forthright and open, you will help to build trust," she says. "The bottom line is you will need to answer what’s in it for them. Once they know, they will be able to move forward and get back to business, which is paramount to the success of the deal."