5 ways to keep top employees from quitting during a merger
At the mention of a merger many employees automatically go on high-alert. 20% percent of employees voluntarily leave the company soon after a merger announcement.
Merger rationale is built upon a financial analysis. However, early integration planning and post-merger integration requires a rapid rate of knowledge transfer between two legacy companies. When employees give their notice, their knowledge is transferred at a slower rate or lost altogether.
Keeping your best employees from walking out the door comes down to whether or not your employees feel trusted and safe. To achieve a successful merger while successfully retaining your talent, heed the following tips.
1. Spend more time on the human dimension
Although it may be counterintuitive to CFOs, more attention must be paid to the human side of the deal. During a merger, you're combining more than bottom lines. Leaders will see better results if they focus more on the complexities of combining two organizations - each with distinct cultures, operations, processes, talent structures, customer structures and IT infrastructures.
"Merger Syndrome " is the presence of uncertainty and anxiety-raising speculation around change, causing stress. Chronic stress can impede judgment, cognitive alertness, decision-making quality and even cause physical illness.
The American Medical Association estimates stress related headaches cost U.S. businesses approximately $8 billion annually.
Be prepared to respond to organizational culture differences, and communicate consistently and constantly throughout the process to minimize Merger Syndrome. To slow turnover, management teams must connect early and often with their employees. Sustaining psychological safety during pre-merger, merger and post-merger activities is critical for the formation of trust between the two organizational cultures.
2. Create a culture of voice
A culture of voice keeps lines of communication open and increases the flow of valuable knowledge between the two organizations. Lack of psychological preparedness can lead to an "us vs. them" mindset between the two firms.
This dynamic can shape what is known as a "culture of silence," which exists when employees willfully withhold valuable work-related information.
Cultures of silence represent a significant risk to merger deals because the knowledge transferred is slowed or stopped between the two combining organizations, when it should be moving at lightning speed. Ask employees to identify solutions to important problems that arise.
Also, limit the amount of time you "tell" others to 20 percent; ask questions to understand and learn from employees 80 percent of the time. Employees should feel their voice has merit, and believe their ideas, thoughts and opinions are valued.
3. Communicate often
Communicate often at the three levels (enterprise, group, individual) - even if you have nothing to report. Keeping in touch with a stressed employee population and letting them know there's nothing new to share is actually valuable information, and can go a long way toward easing tension. Employees feel trusted and safe when communication is open and management is transparent about decisions.
4. Do not hibernate
Flickr CC/Tambako The Jaguar
Associates need to know their leaders are present and available. Stay visible as much as possible. It's more than what you say; it's what you do. For example, if you say your door is "always open," but you require employees to schedule appointments through your assistant, you spend most lunches with other executives in a manager's lunchroom or you park in a special lot reserved for managers, employees may sense a "line drawn in the sand" and may feel the line of communication is closed between employee culture and management culture.
5. Know your audience
When you address the employee population, do NOT discuss "benefits to the shareholders" as a rationale for the merger (unless all of your employees are shareholders).
Employees are dissecting every word you speak and every move you make. It's best to acknowledge and legitimize the current state and concerns of your employees. Of course, senior leaders are exempt from the employee culture, which means you cannot discuss your personal anxieties because they are irrelevant to your employees.