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How do I organize the employees of a merged business?

On Behalf of | Nov 9, 2021 | Business Law |

You may be looking forward to the lucrative aspects of merging your business with another company, such as the capital, equipment and inventory you will have access to. However, combining two companies also means that you will join together two different workforces. Certain complications may result, creating conflict or even litigation from employees.

Before you go through with your merger, you should have a good idea of how to combine the workforces of the two businesses. identifies some areas to pay attention to as you seek to avoid employee conflict in your new business.

Sorting out the company leadership

If your business is larger than the company you are merging with, your company’s leadership will likely take over most of the functions of the smaller business, making it unnecessary for the smaller business to retain most of its leadership. However, if your business is similar in size to the company you want to merge with, you will probably have two sets of executives that are also equal in size.

This can lead to confusion about who should lead the new company. Leaders from your company and the other business may fear that they will lose more of their people in the new leadership. This could lead to conflict and possibly endanger the merger. Consider conducting honest discussions about which execs are best suited to handle the new business as well as who becomes the CEO of the merged company.

Sorting out the employee structure

Job titles are not always the same across companies. Some businesses assign grandiose titles like vice president to tasks that, in other companies, merit a lesser title but the same pay. If the company you want to merge with was more generous with giving out high-ranking titles, you may end up putting a lot of the other company’s employees in higher positions if you keep those same job titles in the newly merged company.

Consider looking at job content rather than job titles as a way to identify the functions of employees in both companies. This may form a basis to organize an employee structure in the new business where everyone receives a title appropriate to his or her job. As a result, you are more likely to have a workforce where everyone knows where they stand and will not overexert their influence.

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