Engage your employees in the transition process to create a unified company.
When two construction firms merge or one company acquires another, the business owners often neglect their employees’ concerns—this is especially true in small- and medium-size firms that have limited resources and time. But in mergers and acquisitions, “the people factor” is vital.
To complete a successful merger or acquisition, follow these steps.
Prepare
First, meet with the other company’s executive team to understand their company’s perspective, plans and expectations. Evaluate every system the other company has in place and how that fits into your business.
The Society for Human Resource Management (SHRM) polled senior HR executives who have had experience with mergers, acquisitions or joint ventures and found the following common obstacles: loss of productivity, incompatible cultures, loss of key talent and a clash of management styles.
Certain preparations must be made to avoid these obstacles:
- Assemble a transition team to discuss all the decisions that need to be made. This team usually includes the CEO, CFO, president, an HR rep and other important decision makers. Decide who will be your main contact at the other company during the acquisition, and meet in person if possible. Find out in the first meeting if the company has complied with HR best practices and employment law and how they have handled employee issues.
- Review the organizational chart, salaries, employment contracts, titles, department heads, compensation plans and fringe benefits. Also, gather demographic information about each employee. You need to know who is exempt and non-exempt and if any employees have taken a leave of absence. Read the employee handbook, and compare policies to decide what should be changed, integrated or deleted. Find out what the employee performance expectations have been and how employee issues have been recorded. Also, consider the technical expertise you will need to merge two different Human Resource Information Systems (HRIS).
- Find out if any employment lawsuits or pending litigation exists. Obtain copies of any non-compete, solicitation and disclosure agreements. Determine if any terminated employees are still bound by these contracts and whether any contracts were made orally. Also, obtain copies of all forms and applications.
- Manually access the employee files to make sure recordkeeping has been in compliance. Do the employee files contain anything that should not be there? For instance, all medical records should be separate from an employee’s main file. Also, ask each employee to complete a new I-9 form. Find out the immigration status of any employees working with a visa.
- Review the current employee benefits and insurance plans. Gather all the vendor contact information, including company names, contact, email, phone numbers and account numbers. Gather all medical, dental, vision, life, disability and workers’ compensation insurance plan documents, and understand who is on each plan, the costs and premiums. Determine if any duplicate coverage exists. You may need to schedule a meeting with your insurance professional.
- Retrieve all retirement or savings plan documents, and work closely with your financial manager on yearly tax filings, such as the 5500 form and Employment Retirement Income Security Act (ERISA) compliance. Determine which benefits you will keep and which ones you can eliminate.
- Consider how much vacation time the other company offered. If you will be offering less time off, how will you get new employees to accept this? Will you consider their tenure with the company and let them stay on their current plan?
- Learn of any accidents, deaths or OSHA fines and citations that have occurred in the last six years, and decide if any safety issues should be addressed.
- Training also needs to be considered. What training was provided in the last three years? Has any anti-harassment training been conducted? What skills do employees lack? Try to find some cross-training options and training manuals.
After you have obtained this information, you must decide how to resolve differences in each of these areas.
Communicate
Once
