While it is widely acknowledged that managers are a crucial element in bringing employees successfully through a deal, the Towers Watson M&A Manager Study, a survey of more than 700 managers worldwide examining the role of managers in an acquisition, merger or other corporate transaction, reveals that companies are missing an opportunity to engage and mobilise frontline managers.
When managers are insufficiently prepared and equipped to help employees, this can lead to ambiguity and confusion resulting in disengagement, a high turnover of key talent and reduced productivity.
Barely a third (36%) of respondents in the UK indicated they were a member of any integration team and 34% indicated they had any formal communication role with their employee group. More than a quarter (27%) said they were not involved at all in any of the integration activities highlighted in the study. Further, 82% of respondents in the UK indicated that employee engagement was not even measured as part of the integration process.
"Maintaining the engagement of employees during the time of change and distraction that corporate transactions promote is a challenge for many employers," said Steve Allan, M&A practice leader for Europe at Towers Watson.
"Among the most cited reasons for acquisition failures are the challenges around bringing workforces together as the businesses integrate to form one combined organisation. Frontline managers are a key driver in connecting with the workforce during these transactions. Although companies realise the importance of frontline managers, more could be done to utilise them in connecting with and engaging employees at such times," he said.
The survey finds that the leading reason for employees to leave the company during or after a transaction is that they are uncomfortable with the new organisational culture, with over 70% of UK respondents citing this as a reason for other employees’ departures.
"Line managers are the route to clearing the obstacles in the way of employees doing their jobs," added Allan. "They will provide basic direction on how to work with new colleagues, clients and customers in a new environment and they will serve as the key communication channel for messages and direction from upper levels of management."
The study included responses from 700 people managers (those responsible for managing five or more employees) in medium to large organisations that went through a merger or acquisition transactions within the past three years. The participants represent a wide range of industries and are based in the US, Canada, China, Germany, Japan and the UK.
