Mergers and acquisitions (M&As) can be an exciting chance for growth, but let's be real: they also come with a lot of uncertainty for employees. The fear of the unknown can stir up worry about everything from culture shifts to job security. If morale starts to take a hit, so does productivity — making an already complex transition even more challenging.
This problem can escalate fast. Low morale is contagious, often spreading from one employee to the next. That's why it's crucial for HR and integration teams to carefully manage the transition — not just for those who stay but also for those who leave — to protect morale and uphold the company's reputation as a top employer.
Key takeaways:
- During an M&A, employees don't necessarily expect to receive all of the answers upfront, but they do expect honesty.
- The quickest way to lose employees during an M&A is to overlook the unique elements that made each company's culture successful.
- People stay when they see a future for themselves. If they don't see opportunities for career progression, they'll look elsewhere.
Why Employees Leave After a Merger
M&As don't just shake up company structure; they shake up employee confidence. Instead of waiting to see how things unfold, many employees may decide to leave on their own terms due to factors like:
- Uncertainty about job security: When stability feels like a gamble, some employees may look for a role elsewhere rather than risk being blindsided by downsizing.
- Culture clashes: Every company has its own way of working. And sometimes, the post-merger culture may not align with a particular employee's values.
- Lack of clear communication and transparency: No one likes being left in the dark, especially when it comes to their job, and mergers may leave employees with more questions than answers.
Without clear, honest, transparent communication from leadership, speculation can quickly fill the gap. As fear and uncertainty grow, even those employees who might have been inclined to stay may wonder if it's worth the risk.
8 Ways to Maintain Staff Morale
An M&A is a significant change to navigate, but there are several ways for companies to create a sense of security and gain employees' trust.
1. Communicate Openly and Transparently
One of the biggest challenges during an M&A is the uncertainty. Employees usually hear whispers and rumors before they get any actual updates, which only fuels anxiety. And when people don't know where they stand, they may start looking for backup plans.
That's why having clear, honest, and consistent communication strategies — such as providing regular updates through town halls, emails, or Q&A sessions — is key, as it:
- Keeps employees in the loop
- Sets expectations with a clear timeline of what's changing and when
- Creates an ongoing dialogue — allowing employees to ask questions and voice concerns
When employees understand the why behind the merger and how it affects them, they're far more likely to stay engaged instead of assuming the worst — and that's key to employee retention.
2. Reinforce Company Culture and Values
Merging two companies isn't just about systems and structures; it's about people. And if the M&A transition feels more like a takeover than a true merger, you'll quickly see disengagement, especially if employees feel that the culture they love is disappearing.
Leaders can make the transition smoother by being intentional about cultural integration and:
- Focusing on shared values and common ground to build a sense of unity
- Involving employees in the process of deciding what cultural aspects stay and which ones evolve
- Maintaining the most popular aspects of each culture so the change feels more inclusive
- Leading by example and embodying the new culture
By creating and maintaining a culture and work environment where staff members feel like they belong, they're more likely to be engaged and ready to move forward — together.
3. Provide Reassurance About Job Security and Roles
Typically, job security is the primary concern for employees during an M&A. They'll likely wonder if their roles will change — or if they'll still have a job at all.
While you may not have all the answers yet, it's essential to lead with transparency by:
- Being honest about potential restructuring and providing timelines for decisions
- Offering supportive transition plans, such as severance packages or outplacement services, if layoffs are unavoidable
- Clarifying new expectations, responsibilities, and career development opportunities for remaining employees
In a nutshell, people need to know where they stand to do their best work.
4. Keep Employees Engaged and Involved
When employees feel left out of significant decisions, disengagement often follows. The good news? You can keep motivation high by actively involving them in the transition process.
Giving employees a seat at the table during the integration process will create a sense of ownership and make it easier to merge cultures and keep morale high. You can start by:
- Assigning key employees to integration teams to help shape the new structure
- Encouraging cross-team collaboration to build connections between merging companies
- Recognizing and rewarding employees who go above and beyond during the transition
If you can help employees feel like active participants rather than bystanders, they're more likely to embrace the process.
5. Offer Support and Resources
Change is difficult, and employees may struggle with stress, uncertainty, or even burnout. Providing emotional and professional support can help them navigate the transition smoothly. To do so effectively, company leaders should consider:
- Offering counseling or mental health resources to help employees cope with the changes
- Providing training programs to help them adapt to new systems, processes, or leadership structures
- Implementing a mentorship or buddy system so employees can support each other
A company that invests in its employees' well-being is more likely to earn long-term loyalty and employee engagement.
6. Lead with Empathy and Strong Leadership
People take cues from leadership during uncertain times. If leaders are calm, transparent, and empathetic, employees are more likely to trust you. Your leadership team can make a difference by:
- Showing empathy and understanding, acknowledging that change is hard, and letting employees know that leaders are available for one-on-one conversations
- Being consistent and approachable so employees feel comfortable sharing their concerns
- Focusing on the long-term vision and communicating how the transition will benefit the team
Employees are much more likely to stay motivated when they feel valued and supported by leadership.
7. Monitor Engagement and Adjust Strategies as Needed
Every M&A is different. What works for one company might not work for another. That's why keeping a close eye on employee morale and making adjustments as needed is essential.
Some options to consider include:
- Conducting employee surveys to understand their concerns and gauge engagement levels
- Holding regular team check-ins to share updates and tackle any challenges before they escalate
- Updating your approach if morale shows signs of slipping by implementing targeted communication, leadership support, or engagement initiatives
The more you listen and adapt your approach as needed, the easier it will be to keep employees motivated and engaged during the transition.
8. Invest in Employees Ongoing Development
A merger or acquisition isn't just a significant change; it can also be an opportunity. However, employees might start to disengage when they don't know what the change means for their career path.
Provide employees with opportunities to learn, grow, and adapt by:
- Offering upskilling and reskilling so employees become comfortable with new systems, tools, and workflows
- Pairing employees from different teams to build connections and share knowledge
- Encouraging managers to connect about development opportunities regularly so employees see the potential for career growth in the new organization
When employees feel like they're not just surviving a transition but can potentially thrive, they're far more likely to stay engaged and stick around.
How an Employer of Record Can Help During an M&A
Managing HR, payroll, and compliance across multiple locations during a merger or acquisition can pose significant challenges, particularly when it occurs across borders.
An Employer of Record (EOR) simplifies international expansion by taking on human resources responsibilities for global employees, making transitions smoother and less stressful. Whether through a merger or an acquisition, an EOR provides a fast, compliant way to onboard employees in international markets without the hassle and expense of setting up local entities.
RemoFirst manages payroll, benefits, and local labor law compliance for employees in more than 185+ countries, reducing the administrative burden on your internal teams while keeping legal risks in check. Schedule a demo to learn more about how RemoFirst can help your team successfully navigate the legal complexities of an M&A.
