3 Major Staffing Risks of Mergers and Consolidations

3 Major Staffing Risks of Mergers and Consolidations

3 Major Staffing Risks of Mergers and Consolidations

The complexities of consolidations and mergers, especially the financials and logistics, can leave staff all but forgotten. While the move may make sense on paper, you need to have a workforce retention strategy; otherwise, communication can suffer, and your current staff might not stick around for long. Hiring after or leading up to consolidation can also be tricky – you want to make sure that any new team member will fit into the (future) company culture.

While you can expect some level of turnover following a merger or consolidation (some of which might even be within the plan), neglecting the relationship with your employees during this time can lead to a mass exodus, which could have dire consequences for your new state of the business. Some of these include:

Loss of culture

With any merger or consolidation, you are risking the company’s identity. Suddenly, you might have two biotech companies with entirely different focuses and values – what does that do to the company culture? Many people also choose to work for a company based on its small size, knowing the people they work with rather than being a “number’. You may have to do some extra legwork to ensure that your company still retains its “scrappy start-up” feel.

Loss of knowledge

Beyond looking pretty bad to stakeholders, having many employees leave at once can be a massive loss of historical knowledge about clients, accounts, projects, and company processes and procedures. In a start-up environment, top employees develop their skills from within their position, so it will likely be challenging to find someone with a similar background and experience.

Loss of time and money

And then there are all of the actual working hours that go into filling a vacant position. Top talent might be hesitant to start working for a company immediately following a merger, especially if a significant number of employees recently left. You will also need to keep in mind the loss of productivity when individuals resign and their colleagues are picking up the slack.

Mergers and acquisitions are risky – particularly from a staffing perspective. Consider everything that you risk by not having an appropriate retention strategy in place. Doing the legwork to minimize turnover will not only save resources, but it will preserve your company’s culture and the quality of your work product.

Dave Murphy

The Alpine Group



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