Hawai‘i Life. Hawai‘i Law.

black-sand beach at Isaac Hale Park
  1. Home
  2.  | 
  3. Business And Corporate Law
  4.  | Staff Considerations in Mergers and Acquisitions

Staff Considerations in Mergers and Acquisitions

On Behalf of | Sep 4, 2023 | Business And Corporate Law

Whenever two companies merge or one company acquires another, the resulting impact goes beyond the finances of the deal. Failing to consider the implications to your “human capital” and the subsequent effects on the company culture could turn a deal that seems a surefire bet on paper into a disaster.

Here are some things to consider:

People don’t like uncertainty

Employees have houses to pay for and families to feed. People want stability and job security, so don’t be surprised if some start looking for other jobs upon hearing rumors of a potential merger or acquisition.

Communicating quickly and clearly allows you to better control the narrative and hopefully alleviate any employee concerns. Pay special attention to highly skilled staff as headhunters might target them once word of the deal gets out.

You’ll also want to consider how you can keep employee morale high in the face of uncertainty.

No two companies work in exactly the same way

Unless you are dismissing all the of other company’s staff, you’ll want to think about how to help two different groups of workers become one team. Mergers and acquisitions provide businesses the opportunity to not only to review old policies, it also presents the opportunity to integrate synergistic collaboration by best utilizing resources of both companies.

Examine existing contracts, benefits and pay structures

In some instances some employees will need to be let go, and you’ll need to be mindful of wrongful termination claims. You’ll also need to consider existing entitlements to health insurance, retirement benefits and stock options and what you need to do about them to ease the company through this process.

Getting legal help to learn more about your obligations to your staff and to prepare new contracts reduces the chance of legal problems in the future. Experienced guidance can also help you manage the “human element” of your deal.

Notice: We are providing this as general information only, and it should not be considered legal advice, which depends on the facts of each specific situation. Receipt of this content does not establish an attorney-client relationship.