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Mergers & Acquisitions: Do Bigger Organizations Mean Bigger Problems?  How to Help Your Employees through the Transition

Mergers and acquisitions are quite common in the healthcare industry, and can lead to positive outcomes for all stakeholders. Successful acquisitions allow healthcare organizations to enter new markets more quickly and/or gain the technology and resources that they require to grow. Furthermore, as a newly merged company, a healthcare organization can often offer its patients and customers more options and services. However, the results can be disastrous for both the acquirer and the acquired healthcare facility if certain issues are not handled appropriately.

What Employees Are Going Through
Mergers and acquisitions force employees to deal with change—and change is often difficult. When senior-level executives announce a merger, it’s extremely common for employees to immediately get defensive and resist the idea. Employees often feel a range of emotions; from panic to resentment to confusion. Below are some of the most common feelings employees experience as a result of a merger or acquisition.

1.    Loss of control. Most employees don’t have any prior knowledge or say concerning mergers. As a result, they often feel a loss of job control, which can lead to feelings of powerlessness. The employee may feel very insignificant in the grand scheme of things.

2.    Social losses. Restructuring and lay-offs are typical in mergers and acquisitions. Employees can lose friends whom they’ve worked beside for years, or perhaps even decades. This is traumatic and can cause deep feelings of resentment.

3.    Loss of status or self-esteem. When a merger occurs, titles and roles often change. Some people may feel as if they’ve been demoted. Or perhaps roles that were highly regarded before may not receive as much respect as they once did.

4.    Economic loss. Employees may feel that there’s not as much chance for internal growth and promotions. They may also lose the seniority they had prior to the merger. 

5.    Inconvenience. Employees will most likely have to learn and adjust to new procedures and policies. They may feel greatly inconvenienced and frustrated as a result.

6.    Surprise factor. Frontline employees usually find out about mergers and acquisitions at the same time as the general public. It’s often a big shock and they have little time to mentally prepare for it.

Communication is Key
A survey by Mercer Human Resource Consulting found that the biggest challenge posed by a merger or acquisition is communicating effectively with employees.  Every company has its own communication style. Styles range from formal to informal; continuous to infrequent; spur-of-the-moment to rigidly scheduled; face-to-face to electronic. Normally, the new management team of the combined company is unaware of these differences. So, the first step toward effective communication involves identifying and resolving any communication differences between the merged companies. Management must analyze what both companies have been doing and decide on an official meeting and communication style going forward.

Once a communication style has been decided upon, it should be relayed to all employees as quickly as possible. Any uncertainty surrounding the merger can make employees anxious; so regular and clear communication is paramount.  Let employees know how and when messages will be communicated. For example, your company may decide that it will send out weekly e-mails that provide all updates and important information.

Regardless of the communication style your organization chooses, if insufficient information is provided, employees will draw their own conclusions and your company will then risk losing key staff. You can help employees stay in the know, and thus help retain key employees and morale by including the following in your communications:

1.    Provide them with logic and rationale. Make sure employees understand the reason behind the merger and are made aware of all the benefits to the organization as well to themselves. Any potential disadvantages should also be discussed. This can include lay-offs, restructuring, etc. These items are obviously more difficult to address, but employees need to know about them nonetheless.

2.    Encourage employee participation. Make it clear that employee input and questions are valued, and will be heard. Let employees know who they should pose questions to and how they should pose them (i.e., via e-mail, to their manager, etc.). Also inform employees approximately how long it will take to receive an answer.

3.    Encourage small group discussions. Some employees may not feel comfortable talking or asking questions in front of the rest of the company. So, encourage each department to have their own forums for discussion. Each manager can then take questions to their supervisor and so on.

What to do When Employees Still Can’t (or won’t) Adjust
It’s inevitable that some employees will have an extremely hard time with a merger or acquisition. In most cases, these employees feel threatened, and feel that they may lose their jobs. This may cause the employee to “protect their turf.” In other words, the employee may hoard information and resist any type of team-based approach in an effort to protect their job.

Territorial conflicts can be a big problem, as they waste the organization’s time and energy. Employees who engage in guarding their physical territory or job duties usually spend more time guarding their area then actually working, plus they waste company resources and prevent the organization from functioning efficiently when they are absent. You can help a territorial employee live through and adjust to their territorial crisis by taking the following steps.

Give Them the Big Picture
Employees who are protecting their territory probably do not fully understand the goals and vision of the newly merged organization. For example, an employee may not understand that the company’s goal is to become customer-service focused; consequently, other employees will need to enter his or her territorial domain from time to time in order to improve customer service. The goal, therefore, is not job replacement or elimination; rather, it’s to share information in order to achieve top-notch customer service. Make sure you share this type of information with employees. 

Show Them the Benefits of Cross-Training
Show territorial employees that there really are benefits of teamwork, shared responsibility, and/or cross-training. For example, if an employee is out ill or needs to leave early for an appointment, the organization can still function, meet customer needs, and turn a profit because other employees can take over some of their duties and responsibilities. Would the employee really like to be in a position where they can’t take time off? Furthermore, cross-training and teamwork goes both ways. Tell the territorial employee that he/she as an opportunity to learn aspects of other’s jobs as well—which further enables job security.  

Communicate that being Territorial does not Create Job Security
Territorial employees try to build their job security by controlling critical functions within the organization. However, employees in today’s organizations can build job security by demonstrating versatility, adaptability, and in the ability to function in diverse environments. So, by being overprotective of information and duties, territorial employees are actually sabotaging themselves. Let it be known that their position will be more secure if they let their guard down.

Acquisitions offer the opportunity to transform both the buying company and the selling company. Unfortunately, this transformation is not always a smooth one. Never underestimate the magnitude of the effort and communication that must be made in order to create a winning acquisition. Employees can certainly live and even thrive through these transitions, if you provide them with the tools and communication to change and adapt successfully.