impact of merger and acquisition on engagement

One of the most threatening challenges for employee engagement can be a merger or acquisition perceived as unbalancing the ‘two-way deal’ of the psychological contract. Employees may find themselves in new jobs they did not pick, or in a company they did not choose, which can affect staff engagement and turnover.

The announcement of a takeover, merger or acquisition effectively starts an emotional journey for employees, which may see shock, anger, grief, denial, resistance and uncertainty. Research shows organisations that communicate with staff regularly throughout the merger and acquisition process experience greater levels of acceptance and engagement about the change.

Experience tells us that one of three things can or will happen:

• following a merger, staff consider leaving their job sooner than they might otherwise have done

• change creates a buzz and excitement

• change offers career progression opportunities.

Depending on how it is handled, a merger or acquisition can therefore be a positive factor for engagement in this ‘environment of opportunity’, leading to new opportunities for progression. Another key consideration when one organisation joins another is cultural change, and many plans for merger and acquisition designed to end with business integration either overlook or mishandle the required cultural integration.

As a result, different parts of a merged organisation may continue to operate in subtly or overtly different ways – a third of people who go through a merger or acquisition report that culture had changed for the worse. From an employer brand perspective there will no longer be one overall brand or feeling the organisation is united, with inevitable implications for employee engagement.


more articles about: employee engagement