Mergers and acquisitions (M&A) represent significant milestones in a company’s journey. However, with this comes a period of uncertainty and change for many employees. Maintaining employee engagement, motivation, and involvement throughout the M&A process is pivotal to ensuring a smooth transition and sustaining trust and commitment as a new entity emerges.

The Importance of Employee Engagement During M&A

Employee engagement refers to the emotional commitment and involvement employees have towards their organisation as an employer, towards delivering a great customer or client experience and towards the ambition, vision and strategy of the company. Listening to your people throughout the M&A process is pivotal in ensuring a smooth transition, sustaining trust and maintaining or improving employee engagement. During an M&A, maintaining high levels of engagement is crucial for several reasons:

  • Productivity: Engaged employees are more productive and committed to their work, ensuring that business operations continue smoothly despite the changes.
  • Retention: High engagement levels reduce turnover rates, helping to retain top talent who might otherwise seek opportunities elsewhere. Our data suggests that newly acquired employees who are engaged are twice as likely to want to stay with the firm after a year than those who are disengaged.
  • Morale: Engaged employees contribute to a positive work environment, which is essential for fostering collaboration and innovation during the transition period. Our research shows that 9 in 10 newly acquired employees challenge themselves to innovate and actively look to collaborate with different people across the firm if they are fully engaged.
  • Trust: Engagement builds trust in leadership and the new organisational direction, which is critical for successful integration. Our data from one case study shows that 92% of engaged employees from a newly acquired firm trust and have confidence in their leadership team following the merger, nearly twice as much as the disengaged population.
  • Customer or client service delivery: Highly engaged employees will continue to focus on the end customer or client, even during a period of significant change during an M&A transition. This is vital to retaining customers and clients for the future success of the newly formed entity.

Common Challenges in Maintaining Engagement During M&A

However, many organisations struggle to maintain levels of engagement amongst their people while in the midst of M&A activity. Our data at ENGAGE show that engagement levels can drop by between 5 and 15 percentage points during any integration process.  This can be for a number of reasons.

  • Uncertainty and anxiety: Employees often experience anxiety about job security, changes in roles, and shifts in company culture during an M&A. This uncertainty can lead to disengagement.
  • Communication gaps: Ineffective or inconsistent communication can result in misinformation, rumours, and a lack of clarity about the merger’s impact on employees.
  • Resistance to change: Employees may resist changes brought about by the merger, feeling attached to the old ways of working and sceptical about the new entity.
  • Leadership misalignment: Differences in leadership styles and practices between the merging entities can create confusion and erode trust in the new leadership. They can also cause tensions and a drop in engagement amongst leaders themselves.
  • Loss of identity: Employees may struggle with a sense of loss as the identity and culture of their original company change, affecting their connection to the organisation.

5 Top Strategies for Maintaining Engagement

Our work has identified a number of ways organisations can maintain and improve engagement levels amongst their people as M&A activities are happening. Leaders need to be very intentional about implementing these and the thread running through them all is simple: active listening. See these various strategies below:

  1. Continuously assess the level of employee engagement through surveys, feedback, and other metrics. Use this data to identify both areas of strength and improvement, taking corrective actions promptly. Regular check-ins and pulse surveys can provide insights into employee sentiment and the main drivers of engagement.
  2. Involve employees in the process: Involve employees from both organisations in the integration process. Create cross-functional teams to work on integration projects and gather input from employees on how to merge best practices. This involvement fosters a sense of ownership and reduces resistance to change.
  3. Foster a unified culture: Work towards building a cohesive culture that integrates the best aspects of both organizations. Engage employees in defining the new company values and behaviours which will create the new, combined culture. This inclusive approach can also help in creating a shared identity and vision.
  4. Set clear expectations for leaders and help them align: Many integrations fail at the top of organisations. Without clear expectations and intentional efforts to get alignment amongst the top teams involved, leader engagement can also fall and impact on business continuity and growth. Leaders will need to get to know each other, learn how to build trust and agree common ways of working to help the integration succeed.
  5. Empower managers: Equip managers with the tools and training needed to guide their teams through the transition. Effective management is crucial for maintaining engagement and motivation deeper into the organisation. Managers (as well as leaders, of course) should model the desired behaviours, communicate effectively, and provide support to their teams.

 

The route to success

Maintaining employee engagement during mergers and acquisitions is critical to the success of the integration process. By prioritising transparent communication, involving employees, providing support, fostering a unified culture, empowering leaders, and monitoring engagement levels, organisations can navigate the complexities of M&A more effectively. Engaged employees are more likely to trust in the new entity and contribute to its’ success.

At ENGAGE, we specialise in helping organisations maintain high levels of engagement during transitions, ensuring that your M&A efforts lead to a high performing workforce. We work with senior leadership teams, HR teams and your people right across the organisation to enhance engagement.

Contact us to learn how we can support your M&A journey.