The Difference is in the Design

Merger Madness: How to Keep from Losing Survivors

The merger is final. The stockholders are happy. The new executives have reorganized the company, eliminating redundant positions and providing laid-off employees with outplacement services.

It’s business as usual

Or is it? After a merger, the organization and its culture are in chaos. The survivors aren't sure about their jobs and their workload. Employee morale and productivity quickly decline.

What went wrong? Why aren't employees grateful that they still have jobs? "There is a big difference between what employees want and what management thinks that they want, " says Benita Ugoline, Director of Consulting Services for a career transition services provider in Kansas City, MO. "Employers tend to ignore survivors during a merger. That’s a big mistake."

Common mistakes and how to correct them

Let's look at some common mistakes that employers frequently make during and after a merger.
Failing to plan how the company will operate after downsizing.
Failing to involve the human resource department in the planning stages.
Failing to keep employees informed about the merger and the impact it will have upon their jobs.
Promising employees that "This will never happen again."
Holding closed door sessions immediately after the layoff.

Ugoline says that employers should take action to re-motivate and retain survivors so they can quickly return to productivity. These actions include:
Involving the human resources department during and after the merger.
Training managers on how to deal with survivors as well as with employees whose jobs are being eliminated.
Training survivors on how to deal with cultural changes brought about by the merger and with feelings of guilt and grief over laid-off employees.
Providing survivors with clear direction on how their jobs have changed as a result of the layoffs and what work they should be doing.

Communication is the key. "Survivors are confused about the focus and mission of the company, " says Lynn S. Nemser, SPHR, who is with Partners in Performance, Inc., a human resource and management consulting firm in Pittsburgh, PA.

Nemser recommends communicating the short-term goals and the future of the organization frequently and in various ways, such as holding a town hall meeting, using e-mail and having face-to-face discussions. Managers should also recognize that survivors are dealing with grief and loss after layoffs. "Don't have a pep rally too soon after downsizing, " she advises. Be visible and leave your office door open.

Ways to retain survivors

After a merger, it's common for some of the top talent to leave the company, taking their experience and knowledge with them.  According to Robert J. Grossman in his article "Damaged, Downsized Souls: How to Revitalize the Workplace" (HR Magazine, May 1996), survivors leave because they don't have faith in the strategic direction of the company or they don't care for the new leaders.

Survivors have more options in a tight labor market and replacing them will be tough. Here are some things employers can do to retain them ("Help! I Shrunk the Company" HR Magazine, June 1999):
Boost morale by keep them challenged and satisfied.
Solicit their advice on how they can help achieve business goals.
Redesign the workflow in the department.
Reassess their skills to do the work and provide training if necessary.

Employers who hire former employees as contractors should be aware of the impact on the workplace. Resentment of former coworkers can cause class systems to form and lead to dissension between survivors and contractors. 

By paying attention to the needs and morale of survivors, employers can retain their best employees and ensure productivity after a merger.

(Want to be a survivor? Go to Merger Madness: Survival Skills for Training Professionals for some tips for increasing your chances of surviving a merger.)

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Timely Topics is written by Audrey Choden. Please send questions or comments to achoden@trainingbydesign.com.

 

 

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Last modified: July 01, 2005