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Employee Communication in a Merger & Acquisition

by Sam Ashe-Edmunds, studioD

During your career, you might be responsible for informing your employees about a merger or acquisition. Rumors that circulate among employees can cause morale problems, loss of productivity and employee flight to competitors. Following common communications strategies to properly inform your employees during these types of business deals can help your company maintain its continuity.

Negotiation Process

During the negotiation process, word might get out that the two companies might merge or one may buy the other. This can cause a panic among employees, because companies that merge often have redundant employees, with one set being reassigned or terminated. If word leaks out that your business is in talks with another company, have a prepared statement ready for employees. Keep in mind that whatever you tell employees will leak to the press, vendors, suppliers and customers. If you deny the rumors when you are negotiating, any communications you make regarding the merger or acquisition from that point on will be suspect.

Preannouncement Communications

If you are close to closing a deal or have made an agreement, inform key employees first to ensure you stop any defection plans they might have. Some employees who leave might take company assets or secrets with them, so letting essential staff members know they are safe can reduce the likelihood of this happening. When you inform these employees of the coming change, ask them to help safeguard company property, including data. Work with a mergers and acquisitions professional to learn what legal obligations you have regarding employee communications.

The Announcement

Make the announcement to all of your employees at once, before you inform the media, vendors, suppliers or other parties. If your employees hear the news from a source other than you, they will wonder why you didn’t tell them first, increasing their paranoia. Lay out the reasons for the merger or acquisition, how it will benefit the company and what the future holds for employees, including job security and any changes to their benefits. You might have your new company policy guide ready to distribute, especially if you are merging two companies with very different corporate cultures. If appropriate, reveal the new organizational chart and introduce the new owners, executives and managers, complete with written biographies. If the transaction is an acquisition, let employees know if the two businesses will operate independently or whether they will share administrative functions. Consider creating an employee intranet with details about the deal.

Post-Announcement Communications

Once you’ve made your general announcement, start communicating with departments and individual employees. This includes department meetings to let staff members know how things will operate going forward. After a merger, employees will naturally be concerned about terminations, since the new company won’t need two accounting or human resources departments. If you will be laying off employees, have each termination planned in advance, including having your information technology department ready to terminate passwords and security personnel on site to handle any disruptions. Work with your accounting department to prepare final paychecks and instructions about benefits and filing for unemployment insurance. During the transition, keep employees updated at least weekly to let them know what changes they will be seeing in the immediate future.

About the Author

Sam Ashe-Edmunds has been writing and lecturing for decades. He has worked in the corporate and nonprofit arenas as a C-Suite executive, serving on several nonprofit boards. He is an internationally traveled sport science writer and lecturer. He has been published in print publications such as Entrepreneur, Tennis, SI for Kids, Chicago Tribune, Sacramento Bee, and on websites such Smart-Healthy-Living.net, SmartyCents and Youthletic. Edmunds has a bachelor's degree in journalism.

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