Impact of merger and acquisition

One of the most threatening challenges for employee engagement can be a merger or acquisition perceived as unbalancing the ‘two-way deal’ of engagement. Employees may find themselves in new jobs they did not pick, in a company they did not choose, which affects turnover: CIPD found that 50% of survey respondents who had been through a merger or acquisition thought about leaving their jobs sooner than they might otherwise have done.

In contrast, 24% said change in the workplace was exciting and 46% felt job changes helped them to learn, complementing Randstad’s findings where 36% cited ‘career progression opportunities’ as one of their top five reasons to choose a new employer.

The announcement of a takeover, merger or acquisition effectively starts an emotional journey for employees, which may see shock, anger, grief, denial, resistance and uncertainty. Research shows organisations that communicate with staff regularly through the merger and acquisition process experience greater levels of acceptance and engagement about the change.

Experience also tells us that one of three things can or will happen:

• following a merger, staff consider leaving their job sooner than they might otherwise have done

• change creates a buzz and excitement

• change offers career progression opportunities.

Depending on how it is handled, a merger or acquisition can be a positive factor for engagement in an ‘environment of opportunity’ leading to new opportunities for progression.

Change of culture

One key consideration when one organisation joins another is cultural change, and many plans for merger and acquisition designed to end with business integration either overlook or mishandle the required cultural integration.

As a result, different parts of a merged organisation may continue to operate in subtly or overtly different ways; a third of people who go through a merger or acquisition report that culture had changed for the worse. From an employer brand perspective there will no longer be one overall brand or feeling that the organisation is united, with inevitable implications for employee engagement.