How Do Mergers Affect Employees?
Mergers take place when two companies join their businesses to form one company. Mergers may make businesses stronger and more efficient as the two companies cut costs. The problem for employees is that merged companies often reduce their workforces as they decrease costs. Nonetheless, some employees can emerge with more secure positions following a merger.
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Office Culture
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Employees often struggle to fit into a new office culture when companies merge. Mergers result in a new way of doing business, and employees sometimes resist the changes because they don't understand how they fit into the new business and office culture. An MSNBC article titled "How to Survive and Thrive After an Acquisition" suggests that employees learn about the new company and its goals. Use that information to get to know new managers and outline how the duties you're responsible for can be enhanced to align with the merged company's goals.
Executives
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Mergers often lead to one company and its executive team taking the lead in managing the new business. That means executives who work for the subordinate company have to get use to a reduced role with the merged business. A MarketWatch article titled "Merger Activity Poses Risks for Workers" says top executives who are relegated to a less dominant team are often in for an unhappy and tense time after a merger.
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Layoffs
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Merger announcements make employees cringe because layoffs usually follow company mergers. Some employees immediately look for new jobs rather than waiting to find out if they'll keep their jobs after a merger. Yet the MarketWatch article notes that mergers may increase job security for employees who aren't laid off. Companies merge partly because they anticipate creating a stronger business by combining finances and other resources. Employees' job security grows if a merger creates a more competitive business that's financially stable.
Employee Confidence
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According to the Kenexa Research Institute, mergers tend to have a negative impact on how employees view their employers. In an annual survey of 10,000 U.S. workers, Kenexa reports it found that workers lose confidence in the future of their company following a merger, which causes some employees to quit. Yet Kenexa suggests that employees are less likely to quit when the new management team communicates a clear and forceful vision for the future of the merged company.
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References
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