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Mergers & Acquisitions: The Human Impact of Company Takeovers

Mergers & Acquisitions .... Behind the Scenes

When a smaller company is acquired by a larger one this merger is usually seen in terms of opportunity. For the smaller organisation a takeover is deemed evidence that it is doing something right and has something to offer the wider marketplace. The larger firm gains recognition for being able to identify innovation and being in a position to progress.

All too often the human cost of takeovers is forgotten. If business reorganisation is not successfully managed it can have a detrimental impact on employees in both the acquiring organisation and the one being purchased.

 

Mergers & Acquisitions

When two companies come together, no matter how complementary their business activities, there will be differences in how they operate, their culture and style and even their basic business processes. For a merger to be successful this needs to be recognised and managed if a seamless future organisation is to be realised.

 

Employees are Affected by the Stress of the Acquisition Process 

Change is difficult for many employees, particularly if they have little or no involvement in decision making processes. A general dislike of change, however, can become more pronounced at a time when an acquisition is taking place. The upshot of this is often employee stress, poor morale and an impact of the ability to work effectively.

 

Successfully Managing the Merging of Two Organisations 

When it comes to successfully managing the merging of two organisations the key to ensuring success is to ensure that excellent communication is at the heart of the business planning process. As much information as possible should be shared with employees about what is happening, how this will impact on the organisation and, in particular, how this will affect individuals. Timescales for any changes should be given and regular updates provided to ensure that employees are not left behind.

It is sensible to assume that there will be a degree of conflict as the two organisations merge. It is inevitable that the ways things were done by the smaller company will need to change in order to meet the needs of the acquiring one, which will also need to adapt to bring a new organisation into its folds.

 

Employees Fear Job Loss

Additionally, employees of both organisations can be fearful that they will lose their jobs. In such difficult times it is not uncommon for some to leave the company altogether, preferring to find a new job rather than face uncertainty in their existing one.

 

To Retain Talent it's Essential During Mergers & Acquisitions to Consider Human Impact

If an organisation is to retain its talent it is essential that the human impact of a takeover is acknowledged. If it isn't, employees will look for a better role elsewhere.

 
Written by Heidi Eckersley of Circle Square - Financial Recruitment
 
To contact one of our specialist financial recruitment consultants call 0207 492 0700 or email: jobs@circlesquare.co.uk Connect with us on Google+  & Facebook
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