Overcoming Staff Resistance After M&A

In modern business, mergers and acquisitions are becoming more and more widespread. Nevertheless, studies show that only a few of them achieve all their goals. Experience shows that one of the reasons for the ineffectiveness of mergers is personnel resistance. This prevents the creation of a single coordinated team and the exchange of knowledge and experience between the merging groups of employees. So, despite correct market assessments and financial calculations, during the process of integration problems will arise.

Staff Resistance – What Is It, and What Can It Lead To?

The phenomenon of staff resistance to the integration process in mergers and acquisitions follows the same psychological laws as any other organizational change. These can be handled according to the same basic principles. Organizational change has a significant impact on staff and the working atmosphere in the company, which forces them to change to survive.

The Consequences of Organizational Change Are:

• An established tense psychological atmosphere in the office (70% of respondents);
• A noticeable decrease in employee loyalty and trust towards the organization (45%);
• Decrease of employees’ innovative activity (new ideas, readiness to undertake projects with a certain risk level – 40%);
• Increase in the number of conflict situations between employees and management (35%);
• Changing requirements for employee salaries (35%);
• Resignation of some valuable employees (30%);
• Decrease in labor productivity (25%);
• Increase in the number of conflict situations between employees (20%).

In major organizational changes, these principles are unilaterally changed by the company and the employee has either to fight to keep them (by actively resisting them) or accept the new ones, even if they are dissatisfied (which also affects the quality of work).

“What to Do?”

• Ensure that management communicates as openly and honestly as possible with all levels of staff.
• Make sure all employees are as informed as possible about what is happening.
• Involve employees in decision-making.
• Provide additional training.

Among the main practical tasks to be undertaken in these phases are an information campaign (providing, among other things, emotional support for staff); team-building (including downsizing if required), and additional staff training. The success of the integration process begins with a well-thought-out information campaign that gets launched before the change occurs. Only when the employee has a clear idea of what is happening, he or she can actively engage in the implementation of organizational change. The uncertainty of goals and prospects leads to a state of anxiety, fear, and apprehension on the part of the employee, which leads to resistance to change, up to and including the voluntary departure of valuable staff at such a crucial time for the organization.