Mergers and Acquisitions Typically Disengage Employees, but Kenexa® Research Institute Finds that Effective Leadership Can Help Ensure Employee Retention. Research from the Kenexa Research Institute summarized the effects of mergers and acquisitions on employee opinions.

According to the research, being merged and acquired has a pervasive, negative impact on nearly every aspect of how an employee views their organization. It undermines an employee’s feeling about the company and confidence in its future, and prompts many employees to consider leaving. Yet, employees in merged or acquired organizations are less likely to leave voluntarily when their leadership is credible and demonstrates a clear and compelling vision of the future.

When the periods 1985-88 versus 2005 were contrasted, the WorkTrends™ data suggested that the negative impact of being merged or acquired on overall job satisfaction has lessened, while the negative impact on turnover intent has increased. In both periods, the largest impact of mergers and acquisitions was on the rating of job security.

Kenexa’s research demonstrated that the impact of being merged or acquired was far more negative when layoffs occurred, creating a profound impact on an employee’s sense of job security.

“Merger and acquisition activity creates vulnerability to talent loss. In order to begin the healing process and to ensure employees remain engaged, management must clearly state a tangible vision and plan of action. This should include accurate and timely information about the merger and its impact on the workforce,” said Jack W. Wiley, Ph.D., executive director, Kenexa Research Institute.

Database Overview
The Kenexa WorkTrends database is a comprehensive normative database of employee survey results with comparisons on topics including leadership, employee engagement and customer orientation.

Study Details
The report is based on the analysis of data drawn from a representative sample of 10,000 U.S. workers who were surveyed through WorkTrends, KRI’s annual survey of worker opinions.

The survey asked workers, if in the past 12 months their company:

• Acquired another organization
• Had been merged with or acquired by another organization
• Experienced layoffs due to a merger or acquisition

Survey Results
The results were rated using a 5-point Likert-type scale. The values in the following tables and graphs represent the percent of employees who answered, “Strongly agree” or “Agree” (% favorable).

Of those who indicated their organization had been merged or acquired, 44% experienced layoffs, 45% indicated there had not been layoffs, and 11% were uncertain.

Impact of Layoffs on Employee Opinions During Merger and Acquisition Activity: Acquiring

• Employee morale is reduced in the acquiring organization when layoffs accompany the acquisition.
• Opinions of employees in acquiring organizations that do not experience layoffs tend to be just as favorable (or even more so) than are organizations without any recent merger and acquisition activity.

Merged or Acquired Employee’s Intent to Leave
Employees in merged or acquired organizations are less likely to voluntarily leave when their leadership is credible and demonstrates a clear and compelling vision of the future.

Impact of Mergers and Acquisitions on Managers: Being Acquired
Managers who work in organizations with merger and acquisition activity rate their organizations much less favorably in many areas versus managers in organizations without any recent merger and acquisition activity.