How To Increase Employee Engagement During Mergers & Acquisitions
By Gena Cox, PhD - April 16, 2020
Although managing fallout from the COVID-19 pandemic is currently at the forefront of business leaders’ attention, we continue to look forward to the day when normalcy returns. Many of the observations in the following article are applicable to employee listening strategies during the pandemic, but if you are interested in learning more about organizational response specific to COVID-19, there are several articles on our blog with insights about helping employees navigate this unprecedented situation.
Mergers and acquisitions (M&A) are omnipresent in modern business life. According to the Institute for Mergers, Acquisitions and Alliances (IMAA), over 11,000 business mergers and acquisitions were executed in the U.S. in 2019 alone. Globally, millions of employees are affected each year by M&A activity.
Business leaders want to sustain employee engagement during mergers and acquisitions, even as all involved are typically experiencing significant organizational change. Widespread organizational change is never easy, but M&A-driven change has the unique characteristic of making employees feel like the ground is shifting under their feet. The corporate identity may be changing and their work experience is often changing too. Employees may experience both positive and negative emotions while dealing with mergers, but fears regarding job elimination are very common. These anxieties naturally have an impact on employee engagement.
Typically, employee engagement decreases during periods of significant change, but rebounds once employees have more clarity about the new strategy. Many leaders mistakenly choose not to survey employees until their strategic changes are fully implemented. This approach is based on a misguided belief that it is not possible to get an “accurate” measure of engagement until things settle down into a new normal.
In fact, seeking employee feedback during periods of big change is even more important than it is when things are calm. (Tweet this!) The mere act of asking employees what additional support they need during the changes shows that the organization cares about the human impact of the business decisions. That kind of communication can be sufficient to help ease employee angst and sustain desired levels of employee engagement.
In this article, we’ll examine listening strategies to support employees during mergers and acquisitions, to help ease them through the transition and keep them engaged.
Employee engagement is beneficial whether your company is going through a change or not. Learn more about how to increase engagement in your organization with our free guide, Employee Engagement: Redefined.
Measuring Employee Engagement During Mergers And Acquisitions
Surveys help organizations communicate with employees during M&As but also provide leaders with critical measurements of employee engagement. Since the M&A process typically plays out over many months, those communication touch-points and engagement measurements need to also be sustained.
Both employees and organization leaders need a continuous listening approach to measuring/communicating during M&A activities. Collecting feedback during the process gives leaders the data they need to course-correct and tweak policies and processes as needed. Without employee feedback, leaders are flying blind in any attempt to assess how changes are affecting and perceived by employees. And employees perceive the ongoing communication to be a perfect opportunity to express their opinions and make suggestions; this enhances their sense of partnership and agency in the building the new organization.
Mergers and acquisitions are a holistic shock to the system; two organizations (the acquiring organization and the one that is being acquired) with different cultures, procedures, pay and benefits structures, and employee populations are being blended. The employees from both organizations need to be supported during M&A transitions. In acquisition scenarios, the initial focus tends to be more on the “new” employees, from the acquired company, who have joined the acquiring company. These new employees are essentially strangers who have been thrust into a new environment, and it’s important to ease their transition while they become integrated. It is important to remember though, that the so-called “legacy” employees (those who were employees of the acquiring company before the acquisition) are also impacted by the M&A activities. Both acquired and legacy employees need to be included in the continuous listening strategy.
Employee perceptions about M&A activities begin to form as soon as the merger or acquisition is publicly announced and continue long after the deal has been completed. The cadence of employee experience measurement must be aligned to that prolonged period when employee emotions are heightened. A typical cadence for measuring acquired employee opinions is 30, 90, and 180 days post-deal close. Many organizations also do a one year post-M&A survey of both acquired and legacy employees. One efficient way to accomplish this is to incorporate those M&A specific questions into the existing annual census survey, rather than running a stand-alone one year anniversary M&A opinion survey.
Questions To Ask Employees During Mergers And Acquisitions
In addition to employee engagement (an outcome measure), there are a number of other themes to explore in M&A surveys that can help leaders zero in on what is driving or blocking engagement. Identifying those drivers and obstacles allows leaders to quickly make adjustments to smooth the transition. After all, the number one talent priority for senior leaders during M&A activity is to build trust with the workforce.
Questions to ask employees when companies merge typically focus on the themes below, which are top-of-mind to the employees experiencing the strategic shift;
- Effectiveness of senior leaders communications
- Understanding new company vision and strategy
- Understanding impact of new strategy on their local experience
- Understanding role in the new company and how it relates to the company’s success
- Satisfaction with the integration
- Manager effectiveness during the transition
- Perception of being welcomed into the acquiring company
- Perception of being treated with respect
- Access to and information and resources needed to do the job
- Perception about the future of the company
- Anticipation of impact on career
- Compensation and rewards
- Support needed by employees
These themes touch on many areas of common employee anxiety during the M&A process; as noted previously, just the act of talking to employees, via the survey, can help allay employee fears. But measuring employee opinions is just the starting point. Leaders and managers must take quick action on the insights revealed by the survey. Delays in action can erode trust and decrease employee engagement. (Tweet this!)
Measuring employee opinions is just the starting point. Leaders and managers must take quick action on the insights revealed by the survey. Delays in action can erode trust and decrease employee engagement.
In addition to scaled questions (i.e., statements to which employees indicate their degree of agreement) related to the themes we mentioned, it is also important to include open-ended questions so employees can express their opinions in their own words. The responses to a question such as “What is the one thing we can do to support you through this transition?” can offer invaluable guidance to leaders.
Surveying several times during the M&A process not only provides regular “temperature checks” but provides insight into the impact of interventions that have already been implemented. Let’s say the initial M&A survey reveals an opportunity to improve leadership communication, and that actions are implemented to address the problem. If a subsequent survey 60 days later reveals that leadership communication remains a problem, leaders will know that their actions are not working and they need to try something new. Multiple M&A surveys allow leaders to assess the effectiveness of their efforts and adjust course as needed.
Integrating Questions About M&A Into Census Surveys
Most organizations focus on the acquired employees as the primary audience for their M&A surveys because acquired employees are at risk of feeling like “outsiders.” Legacy employees also have strong feelings including fears and anxieties, so it is important to also understand their perspective.
Typically, legacy employees have the opportunity to share their perceptions about the M&A activity in the annual census survey, where strategic alignment, change management, and communication effectiveness are common themes. Many of the themes covered in a typical M&A engagement survey are often carried over to the census survey. This facilitates direct comparisons of the opinions of acquired versus legacy employees.
The demographics collected in a post-acquisition census survey are critical to understanding the needs of the acquired versus legacy employees. Demographics that are useful for making these differentiations include: a flag that differentiates the two groups (acquired/legacy) in the database, previous company name (if you have multiple M&A actions in the same year), employee length of service in the acquired company, and employee job level or leadership status in the acquired organization. The biggest challenge you will encounter is that the HR Information Systems (HRIS) will not be immediately integrated. Allow some extra time for figuring out what demographics you need to segment the data meaningfully. Then, use your political skills to get what you need to drive the insights your leaders require.
Keep Communication Open To Keep Engagement High
The communication aspect of surveying employees during the M&A process may itself be the most critical driver of employee engagement. Mergers provoke uncertainty in employees, which translates into a stress and typically, temporary lower levels of employee engagement. Clear, honest, and frequent communication from leaders is crucial for building trust and allaying employee anxiety.
At the same time, people who are anxious and stressed need a way to express their anxieties and concerns. When leaders respond quickly with actions to address those concerns, employees know that their voices are being heard. Even though they may still be experiencing stress from the disruption, employees who see leader action will be more trusting, more engaged, and more likely to support the vision.
When employees see improvement and can anticipate future improvements, they feel they have a voice; they are not simply at the mercy of what others have decided. As detailed in this guide, this cycle of communication, feedback, and improvement inspires trust and engenders engagement—even while the transition is underway.
Seeing The Way Forward
The Perceptyx platform gives you the flexibility to adapt your listening strategy during M&A activity and other rapidly changing real time events. Combined with support from our analytics experts, our platform can help you keep your finger on the pulse of your people’s needs, so you can provide the support they need during periods of intense change and uncertainty. Get in touch to see how we can help your organization navigate and enhance the employee experience successfully.