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One of my competitors is about to go bankrupt. The owners have proposed me the idea where I could buy their business. I am still discussing the idea with some of the leaders in my company.

The proposal is not secret - employees from both companies know about it. This has caused some morale problems. The most pressing one is some of my staff panicking that, by merging, their jobs would be made redundant.

How should such an issue be addressed, so that it doesn't become a problem and impact productivity and well being of the staff?

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    It is not the purpose of this SE To judge on the "Fairness or ethicality" of a business policy. This has been declared off topic. – IDrinkandIKnowThings Nov 7 '13 at 17:19
  • How to run your business or judgement on business decisions is off topic for this SE. We can help you tell the people they are being laid off, how to deal with the people who are disgruntled because their friends are gone. But this question is still out of scope. – IDrinkandIKnowThings Nov 7 '13 at 20:06
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    @Chad I have removed the last portion of the question. – user10483 Nov 7 '13 at 20:17
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How should such an issue be addressed, so that it doesn't become a problem and impact productivity and well being of the staff?

I've been through this process many times - as part of the acquiring company, and as part of the acquired company.

It's a real challenge to keep people focused on their day-to-day work, when they know that a potentially disruptive change is coming their way. It's natural for people to want to know "how will this affect me?" and to fear the worst.

Since you already chose not to keep this secret, you must now address this issue quickly and directly.

Gather your staff for a frank discussion. Be as transparent as you can (within the bounds of your business needs). Tell them what you know. Let them ask questions.

Try very hard not to over-promise. Unless you have already formally made such a decision, do not tell your staff that all of their jobs are safe. I went through one merger where we were told not to worry about our jobs, only to have some folks laid off within a month. The rest of us who remained could only conclude that our management lied to us, and I never trusted them again.

Instead, let them know that you'll be evaluating the newly merged staff as quickly as you can, and will give people as much notice as possible. If you already know the process you'll use to do that evaluation, you might choose to share that process with the team.

Give your staff a feel for your vision for the merged company - what you think it can do that the two individual companies couldn't, why it's a good thing for the company, and where it's a good thing for them.

Acknowledge their unease (don't just say "don't worry"), and assure them that you are in this with them.

In my experience, mergers/acquisitions work best when the duration of unsettlement is as short as possible. While always painful, a company that has one quick layoff after a merger is a far better place to work than a company that has several layoffs stretching out over time. The uncertainty was the most productivity-killing part. Get it behind people as quickly as you can, then tell the team that "the painful part is over - now we can grow as a new [merged] company".

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I think the thing to point out to your staff is that this isn't a MERGER it's an ACQUISITION. You should remind them that your company is in a strong position (i.e. you are doing well enough to buy your rival before they go bust).

This also means the rules are slightly different regarding staff, in a merger it's only fair to evaluate both sides for the best fit, but your staff come first here.

The competitor's staff are being helped by you saving what you can, but remember the alternative for them is to all be jobless if the competitor goes under.

So think of yourself as like a cancer surgeon, doing what you need to for the greater good, even if it's painful and drastic.

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    Yes, but it sounds like the competitor is primarily a customer base in this instance, I'm just trying to answer the OP's question that there isn't a need to be balanced, "to the victor go the spoils", I'm assuming his staff are doing it mostly right if they're ok and the competitor is almost bust. – The Wandering Dev Manager Nov 7 '13 at 12:15
  • I am not sure about the customer base. It could either be an asset, or not, should the acquisition happen. I am letting higher staff decide. From my point of view, the major benefit for us is getting their talent base. The competitor has people I'd like to have working for me. We will honor any ongoing contracts should it happen, but I am thinking more about getting new ones, which would be made possible by having both a larger work force, and some specialized skills that my present staff does not have. – user10483 Nov 7 '13 at 12:47
  • OK, then, that's a different thing. You need to stress to your workforce you are going to be looking primarily at enhancing your workforce by growing larger. Your main issue then will be managing the message if you are bringing people from the competitor who will now be superior to existing staff, you may need to either brave it out, or take the personal approach depending on the relationship with the existing employee. – The Wandering Dev Manager Nov 8 '13 at 11:07
  • @JoeStrazzere - While I agree, for the OP using terms like acquisition or buyout, it provides a different tone than merger. Even if in the end you're going to pick the best people, I would think that making the transaction seem more one sided (in your employees' favor) would help curb panic more. – Telastyn Dec 2 '13 at 1:31

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