Survival & advancement
Ken Pelczarski | TLT Career Coach March 2014
Gather all the facts before switching employers during a company merger or acquisition.
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HAVE YOU EVER WORKED for a company while it went through a merger or an acquisition? If so, you know firsthand that changes in management, company structure, culture, policies, goals, strategies, salary levels and incentive plans are all possible.
The dynamics are bound to change significantly within a company that has merged with another company. Your own job situation may end up better, worse or the same—or your job may not even exist after the completed merger.
Two primary goals during the merger process are: (1.) to bolster your status with your current employer for added security and potential advancement and (2.) to be prepared early in the merger process in case you need to change employers because of dissatisfaction or downsizing.
A looming question will be how actively you should network outside your current employer to locate new opportunities. Through continual information gathering, you can better assess the likelihood of keeping your same job or obtaining an even better role within the merged company.
Some important questions to ask that will help you determine your future outlook with the newly merged company include:
1.
Who will have controlling interest?
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Who will be in key management roles?
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Will the company’s mission and goals remain the same?
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Will the company’s core business and industry focus change?
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Will you be a good fit to the new company culture?
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Will facilities be relocated?
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Will your position remain the same?
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Will you have strong growth opportunities?
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Will your income potential be affected?
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Will you be asked to relocate?
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What are your odds of being downsized?
There is a fine line today between mergers and acquisitions. As Wikipedia states, a merger is a consolidation of two companies into one entity, whereas an acquisition occurs when one company takes over another and completely establishes itself as the new owner (the target company still exists as an independent legal entity controlled by the acquirer).
There are three possible merger or acquisition scenarios that could occur with your employer:
(1.) BEING ACQUIRED
This scenario can raise big concerns about job security and potential advancement. Your capabilities may not be well known to top management at the acquiring company. This management team is likely to favor their own employees in cases when consolidation and downsizing are necessary due to overlapping job responsibilities. An added risk is that your job may need to be relocated because of centralization and consolidation strategies.
In this scenario, you have reduced control over your job and you have less information to work with, especially early in the acquisition process. Be careful not to jump the gun, though, and leave your employer too early by assuming the acquisition will happen when in reality it is only in the discussion stage.
The key here is to consistently gather as much information as possible regarding likely outcomes of the acquisition. Besides using your own gut feel about how you will fare, you should (1.) communicate with your employer’s top management and accounting departments, (2.) establish connections at all levels within the acquiring company and (3.) network with professionals in your field to learn their opinions and knowledge of the pending merger.
If your employer is being purchased by a private-equity firm, it will commonly be a leveraged buyout in which working capital is provided to facilitate expansion or to restructure operations, management or ownership. Typically operations are streamlined through workforce reduction and asset sell-off in order to increase company value for a profitable and quick sale (sometimes within two years, but on average within 5-7 years). Research the history and motives of this private-equity firm to gauge your relative security and growth potential post-acquisition. Growth opportunities abound with new jobs often being created for years following such an acquisition. However, more jobs are usually lost than are gained during the first three years, so it is critical to understand management’s views on your future with the company.
(2.) MERGING WITH ANOTHER COMPANY
This is typically an amicable arrangement between the CEOs of two companies who want to merge as equals and leverage each company’s strengths in order to grow new markets and/ or increase core business market share. Nevertheless, when two companies are consolidated, there may be redundancy in individual roles, as well as in offices, laboratories, manufacturing facilities and warehouses.
This scenario is both a cause for concern and a potentially great opportunity for new responsibilities and/or advancement. As your employer grows in size and stature through mergers, there may be opportunities to manage additional people, work on projects for new markets or expand your current responsibilities. Make it known to management that you are interested in new challenges and are flexible regarding your next role. If you are open to relocate, be sure to express this willingness to management.
Despite potential opportunities with the newly formed company, there also are risks of losing your job in the consolidation process. Even if you have no interest in relocating, you may be required to relocate to keep your job. Therefore, it makes sense to keep your career options open outside your employer and also be fully prepared to interview internally to maintain your position.
(3.) MAKING AN ACQUISITION
It is usually good news for you, as an employee, when your employer is on the acquisition trail. This means that your company is looking to grow externally, as well as internally and is potentially looking to enter into new markets, new locations or simply grow faster in its core business. This should increase future growth opportunities, as well as possibilities for immediate advancement.
Your position should be relatively safe if your employer is the one making the acquisition, especially if you have a successful track record with the company. Top management at your company will most likely remain in key management roles. You are a known commodity to management, and your job may only be in jeopardy if your performance is not up to par or if your relationship with top management is strained. Regardless of your performance history, you may still need to interview internally and compete for your own position, so be prepared to interview as you would with a new employer.
Following is a summary of strategies to implement in order to make the most of your job situation during a company merger:
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Communicate with top management about the pending merger.
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Obtain multiple viewpoints when you acquire new information.
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Maintain solid relationships with those in power.
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Strive to make yourself indispensible.
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Put in extra work during the merger process to display continued motivation.
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Express with management that you are on board with benefits of the merger.
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Keep your resume updated, both for internal and external interviewing.
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Document your accomplishments.
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Secure recommendation letters from current management.
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Keep career options open, even if you think you will be happy with the newly merged company.
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Network actively outside your company to be ready in case you are ultimately dissatisfied or downsized.
Making the right decisions during a company merger is pivotal to your career. However, making an informed decision in this situation is difficult, especially before the merger is completed. The best you can do is keep pushing for new information. When a great external opportunity comes your way, you can then determine if the new opportunity is likely to be significantly better than your opportunity will be within the merged company.
Hopefully you are successful in advancing your career if your company goes through a merger, even if it means switching employers.
Ken Pelczarski is owner and founder of Pelichem Associates, a Chicago-based search firm established in 1985 and specializing in the lubricants industry. You can reach Ken at (630) 960-1940 or at pelichem@aol.com.