Regardless of the industry, merger and acquisition (M&A) discussions mean big changes are on the horizon, and announcing these transactions can be one of the most challenging steps.
Even in best-case scenarios, combining workforces or moving assets leaves plenty of room for uncertainty. The inevitable changes won’t just affect the decision-makers, and it can be difficult to stop the rumor mill from spinning out of control — especially when employees feel their livelihoods are at stake.
Successfully executing a deal entails a lengthy and technical process, involving tough negotiations and the sharing of confidential information. These factors can make communicating with employees complicated and highly charged.
This is why it’s important to communicate clearly and consistently with internal stakeholders at all levels of the organization to mitigate the risk of panic or unwanted turnover. Don’t forget, day-to-day operations must continue unabated as you work to secure an agreement.
Here is how to build trust and help keep employees invested in the new organization:
1. Consider the timing of your initial announcement
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- Choosing when to tell your workforce about merger and acquisition plans is the first challenge. If you disclose your plans to employees too early, it could foster uncertainty, speculation, and fear. If you tell them too late, employees can become mistrustful and will question whether their interests are being considered. A company’s culture can help leaders determine an opportune time to share this news.
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- For example, if your employees are local to the office and fraternize outside of work, there’s a greater chance of speculation and rumors spreading. On the other hand, a startup with a primarily remote workforce may have an easier time keeping gossip to a minimum.
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- One way to ensure you get a little more buy-in from your employees is to announce a potential M&A opportunity before receiving the letter of intent (LOI). This gives decision-makers the chance to hold conversations with high-level employees who may have input or would like to share their priorities for consideration. This doesn’t mean employees are guaranteed everything they ask for, but being transparent about your plans and listening to your staff will make them feel engaged in the process and valued by leadership.
- Choosing when to tell your workforce about merger and acquisition plans is the first challenge. If you disclose your plans to employees too early, it could foster uncertainty, speculation, and fear. If you tell them too late, employees can become mistrustful and will question whether their interests are being considered. A company’s culture can help leaders determine an opportune time to share this news.
2. Communicate often as part of your commitment to transparency
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- Because mergers and acquisitions involve significant levels of confidentiality and almost always include signing non-disclosure agreements (NDA) somewhere down the line, there won’t be much you can share. By emphasizing that you intend to be transparent and share more information when you are able, you’re reassuring employees that they won’t be blindsided.
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- Example: “Because this process is in its earliest phase, much is unknown, and there are not many details to share. We are committed to being as transparent as possible and will keep our community updated as we are able.”
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- “Communicating often” doesn’t mean keeping employees up to date on every minor detail as the process unfolds. It does mean keeping the lines of communication open and acknowledging the proposed partnership when it makes sense. Even if you have no news to share, it is still worth mentioning that the process is ongoing at natural flashpoints, such as quarterly town halls or monthly staff meetings. Showing employees that you’re fulfilling your promise of transparency will go a long way.
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- Example: “As we shared earlier this quarter, we remain in discussions with potential partners. While the process continues to move forward, we are unable to provide more details at this time. When there is more news to share, you will hear it from me first.”
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- Because mergers and acquisitions involve significant levels of confidentiality and almost always include signing non-disclosure agreements (NDA) somewhere down the line, there won’t be much you can share. By emphasizing that you intend to be transparent and share more information when you are able, you’re reassuring employees that they won’t be blindsided.
3. Provide opportunities for employee feedback
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- Stakeholders at all levels will tell you what information they need to feel more secure in their roles as the M&A conversation evolves. Listening is a way to acknowledge that you value their input, even as the process prevents you from sharing more.
- Providing a designated email inbox for employees to direct their questions to (and receive responses from) can help ensure your staff feels heard.
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- You can use their questions to create an FAQ on your intranet or employee portal to address the most common concerns. Be careful not to make any promises you can’t keep and be cautious of sharing anything in writing that hasn’t been vetted by your legal team.
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- You may also consider including time during meetings and town halls for employee questions.
4. Prepare for resistance
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- Statistically speaking, certain groups of employees are more likely to experience layoffs during mergers or acquisitions. This can include departments that are made redundant, mid-level managers, contractors, and part-time employees. Some employees may have special contracts that must be renegotiated, which can cause significant unease when little is known.
- These groups may be the ones who challenge the potential deal publicly, either amongst their colleagues or externally. It’s helpful to have a plan for handling these situations. Review your employee handbook and familiarize yourself with any disparagement clauses or guidance on disciplinary actions.
- Providing senior leaders with accurate, carefully crafted talking points will maintain consistency in messaging across the organization and can potentially defuse animosity, quell gossip, and dispel rumors that otherwise might spread.
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- The company may also benefit from asking senior leaders who are in-the-know to sign NDAs or retention agreements to ensure their confidentiality and their investment in the success of the agreement.
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5. Keep internal communications external-friendly
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- You only have one chance to get this right – and making a positive impression is essential to reaching a mutual agreement. If potential partners catch wind of turmoil within your organization, it could spook them into withdrawing. As you evaluate your internal risks and the best way to respond, remember that what you share likely will be leaked, either to the press or to organizations you’re in conversation with. Always ask your legal team to review sensitive materials before distributing them.
Whether you’re about to send an initial solicitation of interest — or you’re deep in due diligence — communicating your M&A plans internally can be complex. Finding the right tone, timing, and cadence is challenging, but it is far easier than cleaning up an avoidable internal communications mess or the potential fallout of a failed deal.
