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How to Manage Compensation Questions During Mergers or Acquisitions

There’s nothing scarier than showing up to work one day to find your world turned upside down by an acquisition or merger. All too often, though, that’s exactly what happens. Executives make plans behind the scenes, contracts are drawn up and employees go on with their daily business completely unaware. Then all of the sudden, when the details are finalized and it’s set in stone, the workforce is given the word. It could be two months, two weeks or even two days before the actual change occurs, but it never feels like enough time to prepare for the questions you’ll soon be asked by your employees.

Having been through my share of mergers and acquisitions, I have to tell you that as shaken as your average employee can feel when this change occurs, it’s just as overwhelming for HR professionals as it is for the rest of the company. In one acquisition, HR was kept completely in the dark until just two days before the official announcement. Fortunately for me, I knew the acquisition was happening because my cousin who worked at the company we were acquiring tipped me off.

Like any organizational change, especially one like a merger or acquisition, HR and organizational leaders must not only display a unified front, but also anticipate employee questions, concerns and potential problematic situations. Often times this must happen quickly and with limited information. In the situation I mentioned, with only two days notice, we sprang into action. Our team divided our time between having a presence in the field and meeting with employees within the store to provide reassurance, to listen and to answer any questions quickly before rumors and fear spread.

Is a merger or acquisition in your future? Follow these six steps to handle it with style and grace.

1. Build an FAQ

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Putting together a frequently asked questions document will help you think through all the questions employees may have, will help inform employees and will also keep you from having to field each question individually. Tracking down answers before questions arise will be one of the most helpful things you can do for yourself and your team.

2. Evaluate pay by location, band and position

Compensation was one of the first pieces of the acquisition puzzle that we began analyzing during the rushed acquisition I was part of, and it will be one of the first things you’ll face as well. The beginning stages of the acquisition or merger is when you want to evaluate positions, pay bands, pay by location, similar job titles and position responsibilities. Workforce planning and adjustments are inevitable, and while you won’t know all the details or be prepared to answer questions about compensation right away, you should have a grasp on what’s to come.

3. Create talking points for your management team

Those in the field and on the floor are the ones who will be fielding the majority of the questions, so draft talking points for them that are clear and helpful for them and their employees.

4. Provide connection points

Everyone communicates differently, but almost everyone will have a question at some point. Provide a 1-800 number, HR email address or a private, HR specific Facebook page to field questions, share information or connect with your employees.

5. Communicate, communicate and communicate again

Utilize different channels to share information and get the message you want people to hear to as many as possible. Stop the rumors by communicating in ways that are convenient and easily understood for employees, whether that means conference calls, PowerPoint presentations, one-on-one meetings, or group meetings. These should be held on an ongoing basis throughout the transition.

6. Share your timeline

At the end of the day, your people just want to understand what’s going on and how it will affect them. Share your timeline so they know what changes will be made and when. This is especially important if you are planning a cost-of-living or pay-band increase.

Share your opinion

What’s the most misunderstood aspect of communicating mergers and acquisitions to your workforce? Share your experience in the comments section below.


Jessica Miller-Merrell
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