If you’re merging two similar organisations there is unlikely to be room for everyone in the new business. People Puzzles HR Directors Andrea Richardson, Jackie Kibbler and Tara Lawson advise how to manage the process of deciding who to take with you and who to exit from the organisation.
An acquisition or merger often comes with a restructure, so staff will be expecting you to to tell them early on what happens next and what the longer term plan is. ‘There’s an awful lot of things to think about when you acquire a business but if you can settle your people down, then it helps to get all those other things through, and communication is key to that,’ says Andrea Richardson.
‘You can’t communicate too much,’ agrees Jackie Kibbler. ‘Obviously there are certain things you can’t divulge straightaway, but if you start communicating from day one with a consistent message and have a regular flow of information to tell them what’s going on, there’ll be less uncertainty.’
Andrea recommends keeping that communication going, even if there isn’t a lot to say. ‘Just keep talking to them, even if it’s to say yes, we are sorting things out,’ she says.
Identify who you want to keep…
The chances are you’ll already have a good idea of who you want to keep in the new structure. You may even have asked the former owner who their key staff are. ‘A newly acquired company is not just a client list, there may well be relationships built up over years,’ says Jackie. ‘If there are clients you need to retain, you might want to keep staff who have a good relationship with them.’
…and where redundancies are needed
Redundancies can be difficult and there are of course legal procedures to follow. ‘It’s worth doing as much legwork as possible beforehand so it doesn’t take a path you didn’t want it to take,’ advises Tara Lawson. ‘You need evidence of why you need certain people and not others. An HR person or lawyer can help when rationalising roles.’
The consultation process
If there are redundancies to be made, employers are legally obliged to carry out a staff consultation. The process will depend on the size of your company but will usually comprise company-wide meetings and/or smaller team meetings, followed up with one-to-ones.
The timescale depends on the scale of the restructure but requirements are set out by the government: 30 days for up to 100 people being made redundant and 45 days for more than 100 people. While there’s no minimum time period for fewer than 20 redundancies, Andrea recommends following 30 days. ‘It’s really good practice to talk to people, especially if there might be changes to structure or terms and conditions,’ she says.
Making a decision
Decisions shouldn’t be made until the consultation period has ended and it’s important to stress this to staff. A consultation is a two-way communication to show that you’ve listened. Each staff member should have a one-to-one meeting with their line manager to explain how the proposal may impact their existing role and terms and conditions.
Where there is more than one person for a role, a job description needs to be drawn up. ‘You need to use particular criteria to score who’s going forward for these position, such as length of service, job-related qualifications, performance review ratings,’ explains Tara. ‘You can then show how they’ve scored against others. If there’s not enough objective evidence to justify a decision then you will have to ask them to apply for the role and run a competency-based interview.’
There’s a tendency during a restructure to focus on the people going out of the organisation. However, the ones who are left can get what’s sometimes called ‘survivor syndrome’. ‘A consultation process can suck a lot of your time,’ says Jackie. ‘It can divert your attention from the people you want to retain and that can be unsettling for them. But it’s important to have the focus on them going forward; regular communication will help them know there is a future for them in the business.’
Have you read Part 1 Planning For a Merger or Acquisition?
Tara Lawson, People Director
Jackie Kibbler, People Director
Andrea Richardson, People Director