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5 Ways to Use Recognition to Survive a Merger or Acquisition

By Jonathan McClellan | September 19, 2018 | Engage Employees

In today’s business landscape, companies across the globe are merging in record numbers.

But they don’t all succeed. According to Harvard Business Review, 70-90% of mergers and acquisitions fail. But why?

As noted by Harvard Business Review, up to 90% of mergers and acquisitions fail.

One of the reasons is due to the negative impact on employee engagement. While much of the focus is placed on market and environmental impacts, strategic planning and leadership posturing, the employee component often takes a back seat.

So what happens when an employee feels like an “after thought” during a merger or acquisition?

Lower employee morale

According to Aon Hewitt, there is a 23% increase in “actively disengaged employees” after a significant change of events—even if one’s job is not affected.

An Aon Hewitt study found a 23% increase in actively disengaged employees after a significant change of events.

No matter what type of positive internal communications corporate might try to spin, a merger is among the most stressful situations that employees face. Fear of the unknown, rumors and miscommunicated information can negatively impact even the most highly engaged workers. These factors can dangerously impact a company culture.

Turnover increase

According to Business Insider, 20% of employees voluntarily leave the company after a merger announcement. The only way retention rate can increase during a merger is when upper management maintains an open and honest line of communication with employees.

Worker anger and hostility

Those who feel threatened or unsure of their work abilities may feel especially hostile during a merger. Other employees can feel cheated or betrayed by their company and may even view the merger as an act of betrayal or aggression from the “higher ups” within the company.

Using Recognition to Survive a Merger

Employees are the backbone of any successful company. Ultimately keeping your best workers from handing in their resignation and walking out the door comes down to whether or not they feel valued, safe, respected and trusted.

Mergers and acquisitions are a make-or-break time for employee engagement. According to the State of the American Workplace Report by Gallup, better engagement leads to as much as business profitability. Meanwhile, The Engagement Institute (members-only access) reports that disengaged employees can cost businesses as much as $500 billion each year.

According to Gallup, engagement leads to 21% more profitability, but disengagement can cost up to $500 billion annually.

So how can employee engagement and employee recognition help during a merger or acquisition? Try these easy, high-impact solutions:

  1. Strengthen and clarify shared values

In the event one company is forced to adopt the values of the other, it can be a confusing time for employees. Which values will the company keep? Which ones will go away? What new values do they need to believe in? It’s crucial that employees identify and adopt quickly, but giving them time to do so is also critical. Ensure that the company vision, mission and values are effectively communicated to your employees in a meaningful way. A great way to do this is through your employee recognition program.

  1. Define the purpose in the work

For mergers and acquisitions to be successful, it requires commitment from everyone. Your recognition program should be flexible enough for middle managers to localize recognition around critical work functions that accelerate change.

  1. Reward collaboration

Recognize and reward trailblazers, the people who cross the hall, tear down barriers and invent new ways to move the company forward. By tracking these instances and capturing the attitudes, behaviors and events driving change, you can leverage the learnings from “recognition hot spots” to build best practices that the rest of the organization can benefit from.

  1. Strengthen the feedback loop

Recognition provides a powerful form of feedback that can help cut through the uncertainty and anxiety of change. It helps inform and validate. It reinforces that the company focuses on its employees and rewards them in meaningful ways.

  1. Build and strengthen relationships

A merger or acquisition brings the opportunity to build new relationships between leadership, employees and workgroups. Employee recognition can help build trust, confidence and a more emotionally connected workforce.

At Hallmark, we believe that the right words, messages and rewards keep employees inspired about the work they do and the company they work for. Let us help you create meaningful recognition moments at all stages of your employees’ careers, beginning with day one. To learn how we can help your company stay engaged with the people who matter the most, contact us today.

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