Acquisitions and work anniversaries
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by Rick Joi Rick Joi is the founder of The Workiversary Group and author of the award‑winning book, Inspiring Work Anniversaries. |
There is a lot to think about when integrating an acquired company.
Work anniversaries probably aren’t at the top of the list.
Sometimes they can be ignored, but sometimes paying attention to them can cost-effectively add a lot of value.
Does culture matter to the acquisition?
Workplace culture probably doesn’t matter if the acquired company was primarily purchased for a reason other than the employees.
Maybe the value of the acquisition is the assets of the acquired company. Or maybe they have a mature product that can be more effectively cross-sold by your existing salesforce. If employees leave the acquired company, then that won’t materially affect the value of the acquisition. It may well even help with meeting the cost saving targets.
In that’s your situation, then you can let the cultural side unfold however it does by default, and you should skip this blog post.
But, if on the other hand, the value of the acquisition is the employees, then the workplace culture side of the post-acquisition integration takes on a lot of importance.
Maybe the acquired company is expected to bring innovation back to an older company that’s been experiencing slower growth. Or maybe the acquired company is being acquired for the outright reason that the kinds of employees they have are hard to hire, and this is a cost-effective way to bring them on.
In cases like these, the hearts and minds of the acquired employees need to be won over.
Why work anniversaries?
While work anniversaries clearly can’t do it all, they can play a valuable role. Unlike speeches to groups of people, work anniversaries are a direct interaction with each individual acquired employee. They’re tangible. They’re action, not empty words. And, they’re not especially expensive.
Plus, the bar set by the acquired company is probably low. Most companies don’t do work anniversaries especially well. It’s probably not that hard or expensive to do something better than the acquired company used to do.
An employee who hasn’t fully made up their mind about the new company can be tilted in the right direction by a thoughtful work anniversary done well.
When is an acquired employee’s work anniversary?
The most basic thing to get right is the work anniversary date.
For purposes celebrating their work anniversaries, and all benefit eligibility, import the hire dates that the acquired company was using for their employees before the acquisition.
Do not use the acquisition date as a hire date.
From the acquired employee perspective, the acquisition date isn’t a day to celebrate, it’s a day forced upon them, a day they had no input into, and a day that filled them with anxiety.
Further, if you were to use the acquisition date, then a lot of people will have the same work anniversary, and that will eliminate the specialness. And to the extent there are bad memories from the acquisition, they will be painfully dredged up every year when a lot of people conspicuously have the identical work anniversary date.
On the other hand, using their original hire date symbolically shows that the acquiring company respects the acquired company’s history.
Outdoing the acquired company
With the dates decided, the next step is to figure out what you’re going to do.
Broadly speaking, employees at the acquired company will be very sensitive to whether the acquisition is making things better or worse. And, they’ll be more sensitive to things getting worse than to things getting better. That is, if half of the things get worse and half get better, they’ll feel like things are lots worse.
A lot of benefits are too expensive to do anything about. If the other company’s healthcare or 401k is more generous, it’s going to cost a lot for you to upgrade yours.
Unlike those two examples, improving how you handle work anniversaries to be better than the acquired company just isn’t going to cost that much.
In general, and thinking beyond work anniversaries, you want to win as many of the free and low-cost comparisons as you can. (Other examples of free and low-cost things you’ll want to do better than the acquired company include: having strong core values, clearly communicating the organization’s direction, empowering front-line employees, and senior executives who are genuinely curious about the front-line employee perspective.)
How should do you improve your work anniversary program? The simplest approach is to find out what the acquired company has done for work anniversaries and just merge the best parts of their program with the best parts of your program.
If the two programs are closely equivalent, then you’ll want to consider upgrading yours so that it’s clearly better. You can find lots of ideas on how to do this in other workiversary.com blog posts or in the book Inspiring Work Anniversaries.
If your business model is to make repeated acquisitions, this actually won’t be all that much effort. It won’t be long before your work anniversary program is just noticeably better, and it will be increasingly rare that you’ll need to make any changes.
Acknowledging an acquired employee’s first work anniversary with the acquiring company
If you have embraced the ideas promoted elsewhere on this blog of embedding your culture in how you celebrate work anniversaries, then the acquired employee’s first work anniversary with your organization will be a great reminder of what’s valued in your workplace culture.
Their first work anniversary with the combined company will be a meaningful part of their transition from feeling like they work for the acquired company to feeling a sense of belonging with your company. (For more on the power of belonging, check out this blog post.)
However, quietly just adding the acquired employees to your work anniversary program can be a little jarring. That first year, lots of longer-tenured employees will feel awkward that their big work anniversary is being celebrated as being a part of a company that they have barely gotten to know, yet.
The best way to make sure it’s a positive experience, rather than a weird one, is to directly call out the situation.
You’ll want to give them an explicit heads up that their work anniversary is going to be celebrated as though they were part of the new organization all along. You can use this communication to reinforce that the acquired employees were a big part of making the acquired organization a highly valuable organization. You can also use this communication to reinforce the message of why the two companies combined makes strategic sense for everyone.
Typically the message comes from the CEO, though it can also come from the head of HR or the COO. It should be sent in an email dedicated specifically to that one topic. Otherwise, too many people who are scanning a multi-topic email will skip it and miss the message. In addition to the email, if the CEO addresses the acquired employees in a live speech or presentation, without the rest of the employees from the acquiring company, then it can be mentioned there, too, which will further increase the number of employees the message reaches.
The core points of the message are that each acquired employee is now a valued member of the new combined company team, that all of the years they’ve put in and experience they’ve accumulated is valued, and that their work anniversary will be celebrated using the original hire date.
There are two approaches to email timing. The easier way is to send the email in bulk to all acquired employees soon after the transaction closes. The harder, more personalized way is to have an automated email come from the CEO the day before each acquired employee’s first work anniversary with the new company. Using both of these approaches is also an option.
Summary
Here are the five key points:
If motivated employees are a material part of the value of the acquisition, then you will maximize that value by winning the hearts and minds of the acquired employees.
Work anniversaries can play a valuable role in successfully winning hearts and minds.
Always use the acquired employees original hire date as their hire date.
It’s very cost-effective to understand what the acquired company did for work anniversaries and do something better.
Explicitly let the acquired employees know that you’ll be using their original hire date as a gesture of respect for their time at the acquired company.
Beyond work anniversaries
As mentioned earlier, work anniversaries are just one small part of the art of maximizing the value of human capital in an acquisition. To go further, we highly recommend checking out 29Bison, the leading middle market transaction services provider specializing in Human Capital. The are experts at championing the power of people to achieve outsized investment value in mergers and acquisitions.
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