Mergers and acquisitions (M&A) can be very exciting but very nerve-wracking at the same time. There’s a lot of work involved in merging two or more companies together to ensure that all processes and people are on the same page.

It’s a careful balancing act for HR departments and other managers who must seek to keep employees happy, motivated and engaged.

When companies merge, employee benefits change. Even if these changes are improvements for the majority of employees, the fact that they’re changing at all could cause anxiety and worry.

In this article, we’ll provide some tips on M&A and employee benefits so you know what to do when you acquire or merge with another company.

Align Benefits with Business Objectives

Consistency is extremely important in M&A. Every aspect of the new company must be consistent to ensure as smooth a transition as possible.

From an employee benefits perspective, this requires a deep dive into the current employee benefits plans of both former companies, as well as the needs, wants, desires and demographics of employees.

This exercise will allow you to identify potential opportunities, strengths and weaknesses in the current employee benefits plans, and how you can synergize the new plan with the new company’s objectives.

Every decision that’s made along the way as the new benefits package is being created should have the company’s culture and people at the forefront. The ultimate goal is to keep employees satisfied and remove some of the doubt they have.

Manage Changes Carefully

In most M&A, there will be at least minor changes to the existing employee benefits package. Some employees from one former company may be affected more so than those from the other company, depending on how you proceed.

No matter what the changes are, you must manage them carefully. If you are moving all employees to one of the company’s PTO policies, for example, it could result in some employees losing a significant number of days off.

In this case, it might be best to consider phasing in the changes to PTO over a few years. This would create less of a sticker shock if an employee goes from having 30 PTO days per year to 20.

The same goes for all aspects of the employee benefits plan. The goal should be to minimize the disruption that the merger or acquisition creates on employees’ lives.

Ensure Changes are Compliant

Compliance is a major issue for all employee benefits plans. During an M&A, the compliance rules may change based on the new demographics for the company.

For instance, going from 40 employees to 140 may create additional reporting requirements for employee benefits. It may require your new company to offer benefits in a different way to your employees, especially from a health insurance standpoint.

Compliance is a back-end process, but one that should receive significant attention from all relevant departments and managers. After all, if the new employee benefits plan you are designing isn’t compliant with local and federal regulations, then it’s not one you can really roll out to your employees in the first place.

Communicate and Be Transparent

Employee morale is a huge factor in a successful M&A. When you keep your employees happy and excited about the change, they will be more productive for you at critical stages of a merger or acquisition.

To do this, you must constantly communicate and be transparent with your employees about what’s going on. Share with them what you can, when you can, and do so in an upfront, honest and accessible way.

Establish multiple communication channels and opportunities for feedback and input. This could include surveys about what employees would like to see in an employee benefits package, information sheets describing timelines to upcoming changes and in-person interactive seminars to answer questions.

By clearly communicating information about benefits, you’ll be building trust in your employees and doing your best to prevent misinformation from spreading.

Navigate Employee Benefits During M&A with Beckham Ellis Insurance Group

Mergers and acquisitions present many unique challenges to all parties involved. The most successful companies that navigate this process do so with their employees’ well-being and interests in mind.

A major part of that is designing an employee benefits package that minimizes disruptions and appeases a large portion of your employee base, while also serving as a viable recruitment and retention tool.

At Beckham Ellis Insurance Group, we can help guide you through employee benefits for a merger or acquisition. If you’re in the Georgia or South Carolina region, contact us today to learn more.