7 tips for communicating with staff during M&As

By Megan Hart

Mergers and acquisitions have become ubiquitous in the public accounting space, and given the competitive labor market, having a plan to support your staff through times of transition has become more important than ever. John Kellogg, CPA, of Kellogg and Kellogg in Fort Worth, Texas, sees talent as a main driver of acquisitions moving forward.

Kellogg and Kellogg has acquired two firms since 2017. For new staff, one of the most stressful aspects of a merger is learning new technologies, Kellogg said. Adapting to new HR practices and procedures can also be challenging when firms combine. Fortunately, communication with new and existing employees can help overcome these pitfalls.

Here are some tips for communicating business changes in a way that respects staff on both sides of the merger.

Start at the beginning. Consulting firm Mercer has done extensive research about the keys to communicating with staff during mergers and acquisitions. By the time it comes to communicating with employees, senior leadership has typically been aware of an impending merger or acquisition for weeks, Los Angeles-based Mercer partner Jason Jaross said. "They need to remember that and go back to that very first moment they learned about it. That's what it will be for everyone else in the room," he said.

Jaross and his team typically encourage clients to start the initial communication by answering these five questions:

  • What's happening?
  • Why now?
  • What does it mean for all of us sitting in this room?
  • How can the people in this room contribute to the deal's success?
  • What happens next?

Set goals for the initial announcement. It's important to show that leadership is aligned, Jaross said. Objectives like those should inform your earliest communications. He advises clients not to overlook any staff during the process. Staff from the acquired company can be seen as getting more attention. "Always remember there are two sides to a transaction," he said. Mercer encourages clients to synchronize the announcements if possible so that new and existing staff are learning about the news simultaneously.

Be clear about next steps. You don't want to overload your staff with information during the announcement, but it's important to be clear about what will happen in the coming days, Jaross said. Employees from both sides of the merger are likely to have lots of questions.

"Make sure you're staging the most appropriate information at the right time — job security, pay and benefits, software — those are things people need to know right away," Jaross said. "Downstream stuff I would suggest handling in the next few days." For example, you may want to address shifting pay schedules upfront but wait to discuss changes to the process for requesting PTO. Those issues might be better addressed in team meetings or by bringing in HR representatives in the days after the initial announcement, especially since direct supervisors and HR staff might be best suited to talk with employees about their individual needs.

Share your vision. Kellogg has found that one of the biggest concerns for new employees during this process is technology. Kellogg and Kellogg had long been paperless, and it took lots of work to transition one of its acquired firms to the practice. Kellogg and Kellogg invested in training and resources to help with the change, and while staff expressed concern at first, there ultimately wasn't much pushback. "Our new staff members understood the direction of where we wanted to go, and they appreciated it," he said.

Be honest. "Just be as transparent as possible," said Jeff Lucke, CPA. "That sounds easy to say, but there's no point in hiding anything because people are going to find out anyway." He owns Lucke & Associates with offices in Kansas and Colorado — the latter coming through one of two acquisitions the firm has made.

"Both times we came in with no one really knowing who we were, and we took over an existing practice," he said. "Anytime you do it, there will be bumps in the road."

Jaross advises clients to "operate under the notion that eventually the truth will get out," he said. It's very difficult to regain lost credibility, he noted.

Be present when possible. You only get one chance to make a first impression, Jaross said. His firm recommends meeting with new staff in person, if possible. The information can be overwhelming, so it's also important to follow up with the same information by email, he said. He also advises his clients to prepare leaders for the difficult topics they could face throughout the process.

If possible, Lucke recommends finding ways to bring staff from both organizations together. His firm has hosted staff trips to Las Vegas and Utah with activities like whitewater rafting and horseback riding. With affordable equipment now available, recorded video messages can also help personalize communications during mergers, Jaross said.

Take notes. Staff will have lots of conversations with HR or supervisors in the early stages of a merger or acquisition. Make sure their questions and concerns are recorded. During larger meetings, designate someone to take notes, Jaross said. "Get it all written down because it tells you how people are feeling and also what information they want or need," he said.

Lucke's experience has taught him to be open to change based on what you learn. Staff input can be valuable in finding new, more efficient ways of doing things because, as the ones on the ground, they might understand processes better.

Megan Hart is a freelance writer based in Florida. To comment on this article or to suggest an idea for another article, contact Courtney Vien at Courtney.Vien@aicpa-cima.com.

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