Successful M&A deals enable companies to capture new operational and human synergies, achieve economies of scale, cut overheads, and reduce costs. They create opportunities for firms to capture existing client bases, enter new markets, and even cross-out competitors. Another huge potential benefit of M&A is that it can strengthen firms’ employer brands.
How? Let’s take a look.
How Successful M&A Deals Boost Employer Brands
It’s common for M&A activity to affect the public’s perception of an organization. News about an upcoming merger or acquisition can create doubt about its employer brand. Both current and potential employers wonder: Can we continue to trust the company and its hiring practices? Will it still offer a great employee value proposition (EVP)? How will the deal affect employee experiences?
With such persisting doubts, companies can expect to see a “brain drain” with a lot of talented employees leaving for greener pastures.
But it’s not all doom and gloom.
Successful M&As can also strengthen a company’s employer brand.
Most mergers and many acquisitions create larger companies. And larger companies create more opportunities for workers. These opportunities may be related to acquiring new knowledge, developing new skills (upskilling or reskilling), exploring new roles, getting more promotions, or earning bigger paychecks. News and updates about these opportunities will make the employer brand more visible, which will attract more potential employees and thus allow the company to access new human capital. Moreover, current employees will want to stay with the company, further strengthening the employer base and the firm’s human capital.
Merging with a larger company or getting acquired by a well-known firm can result in an appreciation of a firm’s stock price, indicating its robust financial health and signaling that it has a bright future. It shows that the company could create efficient economies of scale and strengthen the value of its corporate brand. It may also show that it captures valuable intellectual property and is well-positioned to shorten it’s time-to-market. These signs can positively affect the firm’s standing in its industry and the employment market. Ultimately, the post-M&A company is more likely to appear desirable to talented future employees.
A merger or an acquisition may also signal the firm’s new ambitions. For example, it may show that the firm is looking to enter a new market or serve a new target audience. Either way, it shows existing employees that if they stay with the company, they can piggyback on the company’s ambitions and experience its positive effects on their own jobs and careers. It also shows new employees that joining the company will enable them to participate in its growth story and take charge of their own career growth and progression.
The relationship between a strong employer brand and M&A deals is two-way. Just like a successful deal can strengthen the employer brand, a strong employer brand can also create the right conditions for a successful M&A deal. The next section will show you how.
The Impact of a Strong Employer Brand on M&A Deals
Companies enter into M&A deals because they expect to benefit from it in some way. However, such deals can also create people-related challenges. They can cause confusion among employees and create concerns about their future with the company. Often, teams are thrown into flux with M&A activity. Even high-functioning teams can falter and make mistakes, affecting the firm’s output and outcomes.
Fortunately, companies can avoid such undesirable consequences through regular, two-way communication. Open, honest, transparent, and authentic communication is the key to maintaining employees’ motivation and engagement levels during a time of great upheaval. It enables leaders to keep people informed about the M&A deal. It also enables them to understand and alleviate workers’ concerns and fears. Ultimately, taking a regular pulse of employees’ opinions and sentiments during the integration period can ease many people-related M&A hiccups for the firm.
Companies with strong employer brands can better deal with such hiccups because they already engage in honest, two-way communications. They also act consistently to keep employees motivated and offer a desirable EVP to all current and potential employees. Their senior leaders always consider the human element during M&As. They acknowledge employees’ emotions and foster desirable workplace attitudes and behaviors after the M&A. These leaders communicate with their people before and during integration, thus preventing unnecessary rumors from spreading and positioning the company for post-deal success.
Strong employer brands are those that create people-focused transition and change management plans to improve workforce resilience, productivity, and engagement. Additionally, they create communication and marketing strategies to positively position the merged or acquired brand on social media. It is these companies that are likely to experience successful M&As and retain the best talent for post-M&A business.
Conclusion
M&As can be complicated and fraught with people-related concerns. On the plus side, these deals can also signal a company’s future growth and strengthen its employer brand. The key is to keep the workforce informed at every step by enabling them to stay updated and helping them participate wholeheartedly in building and reinforcing the employer brand.
Ergode has enabled many e-commerce firms to overcome M&A teething pains and capture the benefits of these deals. With our help, multiple companies have captured new synergies, achieved tangible economies of scale, and strengthened their employer brands. To know more about our expertise in employer branding and brand aggregation, contact us.
