Pulse

The impact of M&A on staffing

By William - 7 March 2022

With M&A activity at an all-time high, Emma Clayton-Wright, CEO of EyeSpy Recruitment, details the staffing priorities organisations should adopt under what can oftentimes be difficult and challenging circumstances.

How does M&A affect employees at both companies involved?

When M&A happens, there’s always a lot of uncertainty surrounding these types of deals. Unfortunately, it often creates quite a toxic environment for both the employees and the business as a whole.

Companies should always remember that communication is the key to handling these situations and ensuring these negative instances don’t occur. Otherwise, you can fall victim to rumours and gossiping, which can negatively affect team morale.

Many times, candidates have come to us at these crucial points, nervous because they don’t know what’s going to happen and they feel as though they need to jump ship before it’s too late.

These situations can be easily avoided if more information and assurance is given to staff, helping staff to view the situation as more of a positive experience and contribution to the future of their careers.

How should organisations approach M&A from a staffing perspective? Are there any absolute dos/do nots?

The most important “Do” for me is communication. This will always be the most effective tool for a successful approach to staffing.

Regarding communication, a big “Don’t” for employers especially, is not to over promise promotions or job opportunities. This is something we’ve noticed happens too often in these situations as businesses desperately attempt to retain talent.

It is a very delicate situation that we believe should be handled jointly by senior management and HR. This will ensure that the message being put out has a strong human element to it whilst still being backed by reassurances from senior management.

It’s important that candidates at risk of redundancy are effectively supported. It can be a very difficult period for these employees, especially if they have had to relocate their whole family for the role. We’ve worked a lot in the past specifically with at risk candidates.

We give them advice on how to best re-enter the job-market, plus emotional support when needed. Recognising the human element in these situations is crucial, too often it becomes a numbers game.

These are real people’s lives in the balance, if companies can keep that in the forefront of their minds and restructuring strategy, they’ll have a better chance of a successful M&A process.

Does M&A activity and the inevitable streamlining of employees present opportunities for other organisations?

External companies are very often able to gain indirectly from M&A activity – One person’s loss will always be someone else’s gain. Being made redundant does not mean these candidates are not talented or did a bad job in any way.

In most cases it’s usually just a natural outcome as a result of two companies synergising, cost cutting and making tough decisions that are best for the business at that time.

We have witnessed many cases where competitors have targeted rival brands going through an M&A process in an attempt to poach their best talent. It’s a very common practice.

There are also many instances where a candidate does have a secured job within the company, but they approach us anyway looking for new opportunities because they don’t like the new structure of the company post M&A.

So, it comes from both sides of the employee/employer relationship. It’s important to remember that this is still very normal and on a whole, a third of all M&A’s that happen fail to reach their staff restructuring objectives.

How can these organisations ensure they capture some of the talent leaving these companies?

One of the key ways I’ve seen this being done when a company is going through a restructure, is to reach out to other HR departments within the gaming industry and share the profiles of all their employees who are at risk of redundancy. This is a brilliant way for employees to assist their at-risk staff in securing another role.

I’ve seen this done constantly over the years and I believe it’s a fantastic example of good communication and transparency that I mentioned earlier.

Keeping the human element and ensuring you help your staff as much as possible even when they’re leaving the company is the best way to ensure a successful M&A deal, plus it will help to boost your brand PR, which is always a positive thing!

What should someone do if they are made redundant? How can they secure another top job?

The reality with redundancy is that it is never an ideal situation for anyone because at the bare minimum, it will make the individual feel as though they may not have done a good enough job and lower morale.

However, that is not the case in most circumstances. Usually, it’s just a case of managing commercial objectives and company synergies – the whole reason why companies merge is to save costs, so redundancies will be inevitable regardless of a candidate’s level of talent.

Securing another top job is not as difficult as one may think in these sorts of situations. When dealing with these types of candidates it’s very often the case that they move on to bigger, better paid positions within the industry.

I have always advised my candidates that being made redundant is actually an opportunity to make the step in their career that they’ve always wanted to make but haven’t because they’ve been too comfortable in their current roles.

There is so much opportunity out there and with the right help and positive mental attitude, a lot can still be achieved!