The impact of a merger on employees and company culture must be considered when examining a potential combination. Employees who work at the acquired company more often than not must adhere to the culture and policies of the acquiring firm. Even though mergers of large corporations often involve different issues than those faced by financial institutions, credit unions can still learn from their experience.
A Lesson in Merging
A New York Times article on June 1, 2008 discussed how the acquisition of Pixar by the Walt Disney Company increased the overall welfare of both companies and their employees. The careful integration of the two company's cultures helped make this merger a success.
Pixar proposed a list of guidelines that would help protect their “creative culture.” These included allowing Pixar employees to keep their health benefits, and not having to sign employment contracts with Disney.
Disney also voluntarily held back forcing its culture upon Pixar. Pixar was able to keep their e-mail system, Pixar executives did not have to work shifts at Walt Disney World, and the switchboard operators could avoid ending all phone calls with “Have a magical day.”
Three Issues Important to Employees
Credit unions going through the merger partner selection process can learn from this, as issues with the cultural fit of two organizations will likely be a primary topic. The following are some examples of issues that can arise:
What may seem like simplistic issues to deal with from a management perspective are important to lower level staff. These issues can include dress code and work hours. A credit union that stresses professionalism may maintain a more business-type dress code, while another feels a casual dress code leads to happier and more productive employees.
Benefits are also important to employee groups, with health insurance usually topping the list. Insurance coverage will often differ between employers, so integrating plans should be dealt with. Other benefits to address include paid holidays and vacations, 401K matching, and other job perks such as flex time.
Finally, organizational structure and career advancement opportunities can vary between credit unions. The management system impacts the flexibility people have in their jobs as well as who they report to and how often. Career advancement can differ since some credit unions prefer hiring for positions from within and others will go outside of the organization.
One CU's Guidelines to Addressing These Issues in a Merger
Because of the potential issues that arise in credit union mergers, many institutions often develop guidelines of what they seek in a potential merger partner. These guidelines often include a cultural component. Dianne Addington, President and CEO of T&C FCU ($611M in Bloomfield Hill , MI ), and her management team drafted guidelines for what they would look for in a merger partner. Two of the three criteria involve issues that can impact employees and the culture around them.
The values of both credit unions must align.
Employee impact must be kept in the most positive light, and any current employee who wants a job after the merger will have one.
Whether two $500 million credit unions or multi-national corporations are merging, employee impact must be taken into account. Working together to ensure the best possible outcome for the employees goes a long way to making the merger a success.
To hear how credit unions are analyzing merger partners and their possible effects on employees, join us for The Perfect Match - Three Keys to Analyzing Potential Merger Partners , a webinar brought to you by Callahan & Associates.