By Towers Watson

Our 2009–2010 Global Workforce Study showed some significant differences in how employees in different regions of the world view a merger, ranging from concern in North America to optimism in Asia.

North American respondents who had been through a merger in the previous 12 months tended to see deals as likely paths to job cuts, to feel that their prospects had worsened and to believe that their manager was less effective.

Those in Europe were somewhat more positive about both the deals and the effectiveness of their managers, but felt that their job prospects had worsened. In Asia, however, the picture differed markedly. Respondents were optimistic about the prospects a deal offered them and believed their managers were effective during the deal-making process.

Despite these differences, however, respondents who had experienced a merger ― regardless of location ― were more likely than other respondents to be actively looking for a job or open to possible offers.

They were also more likely than other respondents to feel that their manager, and the way he or she communicated, was less effective. In addition, they were more likely than other respondents to believe they had to leave their organization to get ahead.

As part of our data analysis, we identified a set of activities that our respondent group felt had a direct influence on staff retention. These drivers of retention included, in order of impact:

- Senior management’s perceived effectiveness at leading the organization through the transaction.

- Ongoing communication from senior leaders that integration is proceeding on target and working well.

- Early involvement from managers and supervisors in identifying employees for reduction in workforce or reassignments. The earlier managers understand the number of employees they will lose, the better they will be able to manage the remaining staff and plan their integration. They should also be given direction on how to reassure employees who remain.

- Effective use of promotions to a more senior level. Promotions help retain key employees and send a signal to others that the transaction could open more opportunities than were available at the legacy organizations.

- Detailed HR training on new programs and benefits. Managers and supervisors who thoroughly understand and can communicate the new HR programs and benefits can provide clarity and demonstrate the value of these programs to employees who may be looking at other opportunities.

But turnover is only one of the risks in a transaction. Maintaining engagement during a deal is also critical ― particularly given its relationship to productivity and discretionary effort ― and our findings also showed that even under the best of circumstances, only about 25 percent of the workforce is truly engaged.

For employers, the implications are clear. A merger, acquisition or other major transaction can seriously weaken the connections between employer and employees. That’s why it’s so important to develop managers’ people skills, increase communication at all levels and determine the most effective ways to retain top talent.

Measuring employee engagement levels before and during transactions can also help a company respond to declining engagement rates before they erode the effectiveness of the deal.

This article was contributed by Towers Watson.