How startups can save their employees from the nasty side of M&As

August 2, 2018
Fintech
Blogs

Employees who decide to work for a startup are a different breed. They don’t work just to complete their targets, they work for their company’s growth. This growth in turn translates into their own growth, because at a startup the learning opportunities are immense and success comes quickly when grabbing such opportunities. However, uncertainty always looms large over their jobs – especially during mergers and acquisitions. Major M&As are big news in the corporate world, but a far more frequent phenomenon in the startup ecosystem. In case of MNCs, the shockwaves of acquisitions are generally absorbed by their well-defined human resources department, although some attrition tends to happen anyway. But most early-stage startups are not equipped with an HR department to cushion their employees, which can lead to a lot of fear and anxieties. News or even distant rumors about your current company considering a merger can cause severe anxiety. After a merger, the resultant firm often ends up with two people for each role in core teams like finance, HR, operations, and admin. The C-suite executives also get hit hard – a company can’t have two COOs or CFOs. This often leads to downsizing, something that terrifies employees. Even the acquisition of a small startup can lead to these sorts of problems, except in cases where the acquired company is free to operate as an independent entity.According to Sumir Verma, job loss is the biggest worry a startup employee faces during mergers or acquisitions. [Employees] are also concerned about the merger’s impact on their overall career growth, changing reporting levels (for employees at higher levels), and the change in culture,” he adds.Even companies with an HR department can fall prey to the dark side of M&As. Certain mistakes on the HR team’s end can negatively affect employees’ morale. According to Verma, the three signs that show that the HR department has not taken the necessary steps during a merger or acquisition are:When an acquisition comes as a surprise to all the employeesWhen the organizational structures affect employees adverselyWhen the acquirer is more focused on the process than the peopleHow can startups help?A startup doesn’t require a well-defined HR team to help its employees and dispel their fears. There are simple and proven ways to handle employees during M&As that can help them avoid anxiety. It’s not rocket science. Read full Article here: https://www.techinasia.com/startups-save-employees-nasty-side-mas/

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