Mergers and acquisitions

Staffing issues during a merger or acquisition


One of the main attractions for a merger or acquisition can be increased efficiency, so you may need to make some staff cuts or changes.

A merger or acquisition will often go more smoothly if the staff in your business and the target business are protected from uncertainty and involved in the process.

Before the deal begins, consider how you can:

  • keep key staff informed - bear in mind that some information may need to remain confidential
  • retain key staff - eg through bonuses or other incentives
  • involve key staff in the due diligence
  • get senior staff to take on more responsibilities while you negotiate the deal
  • get to know key staff to help you assess abilities and skill levels

Consulting staff

The Information and Consultation of Employees (ICE) Regulations may require you to inform and consult employees on certain aspects of the merger. If you have 50 or more employees you are obliged to agree a procedure for informing and consulting employees if more than 10 per cent of employees request a system.

See inform and consult your employees.

You may also find it useful to consult the Labour Relations Agency

Your professional adviser should be able to guide you as to who needs to know what.

After the deal you may find it useful to see staff individually or in small groups to explain future plans and to answer questions.

Staff issues

Think about staff matters while you are considering a merger or acquisition. These may include:

  • skills gaps and how to fill them
  • which posts will be filled by staff either from your business or the target business
  • pay differentials between the two companies
  • how to get staff from both businesses to build working relationships
  • how to share knowledge between staff
  • appropriate policies and procedures for the combined business
  • relocation issues
  • trade union matters

It is important to get expert advice to help with staff issues such as new employee terms (including pension provision), changes in employment contracts and your responsibilities to employee rights after a merger or acquisition.

Fir more information about leading staff through major business changes, see change management

  • LRA Workplace Information Service
    03300 555 300