Leading with Heart: Easing Employee Stress in Mergers & Acquisitions
Anna and Grace were chatting over coffee in the cafeteria and they both work for a company that had recently gone through a merger. Anna recalled the time after the merger as hectic, confusing, and full of tension. Grace shared her work became busier and that she felt more stressed after the merger. They both felt that it was challenging to adapt to newer policies and adjust to new rules while also reporting to new managers and working with new faces.
While M&As offer immense growth potential, they can also leave a significant emotional toll on employees. Companies often measure the success of an M&A integration using various metrics like synergy realization, integration speed, and financial performance. Yet, they often overlook the human element – the part of the story that companies often don’t pay enough attention to.
When a merger or acquisition happens, it often leads to significant changes in employees’ work lives. Even minor practical changes, such as new expense policies or food options at lunch, can make employees feel unsettled.
Understanding the employees’ emotional impact
When a merger or acquisition is imminent, there are three major factors that affect employees:
- Fear and Uncertainty: Employees get worried because they don’t know what’s going to happen. They wonder who might lose their job, who’s moving jobs, and how their compensation and benefits will change.
- Lack of Trust & Confidence: Employees question if the new CEO and managers genuinely care about their well-being. They are unsure about whether they can rely on these new leaders, who do not know their track record and aspirations.
- Prioritizing self-protection: Because of lingering uncertainty and mistrust, people shift to self-protection mode. They feel they can’t rely on the company, leading some employees to get ahead aggressively, while others stay quiet to avoid trouble.
Other factors contributing to employee’s stress
a. Cultural Shifts: Mergers often bring together employees from different organizational cultures. Adapting to a new culture and ways of working can lead to stress and confusion.
b. Communication Gaps: Insufficient or unclear communication from leadership can aggravate stress. Employees may feel uninformed and disconnected from the decision-making process.
c. Increased Workloads: Staff reductions or restructuring can lead to increased workloads for remaining employees, resulting in burnout.
d. Approval Delays: The M&A process needs approval from legal officials and regulatory bodies, which can lead to delays before the payment and paperwork. These delays can make everyone feel vulnerable and unsure about their standing.
e. Future: Every employee would be worried about their future. They won’t be sure about what the new bosses have in mind, like their work/working style or how the future unfolds.
When a merger or acquisition happens, lots of questions and worries come up, and it’s important to talk about them to keep everyone calm and composed.
Warning signs to know that your employees are stressed
Employee stress levels, among other metrics, should be monitored while assessing the success of M&A integration. Here are the red flags that show an M&A made work more challenging for employees.
- High performers and top talent leaving the organization
- Managers and HR receiving more internal complaints
- Employees taking more sick leave than usual
- People working longer hours to compensate for the distractions
- Office atmosphere is more tense than usual
It’s common among employees to experience stress in the initial days following the announcement of an M&A deal, but leaders and HR team should closely monitor this trend from the very beginning and take proactive measures to mitigate the issues over time.
Five hands-on approach
Organizations that recognize and address employee stress during M&A processes demonstrate empathy and a commitment to their workforce.
We recommend these five actionable steps to begin with:
- Start with clear Communication: The leaders need to explain where the company is going, its priorities, its operating model, and the ideal culture. They should do it in a way that leaves employees informed and excited.
- Drive Change Management program: The CEO and executive team should own and drive the change-management program. This involves all the processes, tools, and techniques aimed at effectively managing people during the changes associated with an M&A.
- Lead with empathy: Employees who feel supported and informed are more likely to adapt successfully to the changes and contribute positively to the new organization. Leaders need to demonstrate respect for shared values and legacy identities, they should treat employees with kindness, recognize the good things they’ve done before, and create opportunities for dialogue.
- Energize employees through positive engagement: Employees who make it through the tough changes can see the M&A as an exciting new chapter. This phase often brings a noticeable boost in their mood and energy, and leaders can make it better by bringing the right engagement programs in place and providing employees the opportunities to connect and collaborate with each other.
- Monitor and course correct: Keep checking how employees feel and use their opinions to make the transition better. Leaders should also find those who are struggling and help them adapt.
Modern Intranet – A lever for success in M&A integration
Intranets play a crucial role in facilitating a smooth M&A process and reducing employee stress:
- Timely and Transparent Communication: Intranets are an ideal platform for sharing news, updates, and key information about the merger. Communication outside or in tandem with busy email inboxes can reassure employees without messages getting lost.
- Cultural Integration: Use the intranet to introduce employees to the values, mission, and culture of the new organization. Highlight success stories, recognize employee achievements, and celebrate diversity.
- Employee Resources: Create a dedicated section on the intranet where employees can access resources, such as FAQs, employee handbook, and HR policies. This empowers employees to seek information independently.
- Forums and Feedback: Provide a space for employees to share their concerns and feedback. Conduct anonymous surveys and polls to measure employee stress levels.
- Mentoring and Peer Support: Encourage employees to use the intranet to connect with peers and mentors who have experienced similar mergers. This peer support can be invaluable during the transition.
- Employee well-being: An intranet can serve as a wellness hub, featuring resources on mental health, stress reduction, fitness, and nutrition. Additionally, it can provide access to employee assistance programs (EAPs) and resources on support services such as counseling and coaching.
Employees go through tough times during mergers and acquisitions, but companies can use their intranet to help reduce stress. By prioritizing open communication, cultural integration, and support, organizations can ensure that their most valuable assets – their employees – remain engaged, motivated, and ready to embrace the opportunities that mergers and acquisitions can bring.