Five Tips for Supportive Employee Change Management During a Merger or Acquisition
With regulatory complexity increasing, staffing costs and pressures continually on the rise, and payment rates lagging the economic pressures of inflation, it’s no surprise that providers are looking to mergers and acquisitions to stay resilient and leverage economies of scale.
If and when the Optum acquisition of Amedisys closes, the combined entity will still represent less than 10% of the home care community, which currently numbers over 11,000 home health agencies and over 5,000 hospices nationwide. By comparison, in 2021, the two largest dialysis providers controlled 74% of the market in the U.S. Home care is ripe for consolidation given the aforementioned operator pressures and demographic tailwinds.
Even with CMS’ recent proposed 36-month moratorium on selling a newly approved hospice license and their rate reductions for home health payments next year, providers and investors seem poised to consolidate and join forces. One of the biggest challenges Transcend sees agencies face when navigating a merger is supporting staff. Whether a merger or acquisition, employees on either side will experience levels of uncertainty and change. A successful M&A plan centers your most important assets – your people – at the heart of the experience.
Where to start?
Whether you’re a national organization with a dedicated merger integration team or two community-based agencies coming together for the first time in your histories, there are some basic tenets of change management that can help you ensure staff feels as supported as possible through a transition or change. While employee communications won’t be the only complex part of an M&A project, having a good set of operating principles can save you heartache (and turnover) when it’s crunch time.
Here are five key considerations when putting together a change management communications plan for your home care merger or acquisition:
- Acknowledge change can be hard. Employees affected by a merger will be nervous. It may be tempting to assure those joining your agency that “everything will be ok.” While the sentiment may be admirable, this tactic can backfire. It’s an uncomfortable truth that there will be upsides and downsides to mergers for staff. Benefits packages can change, processes and protocols may evolve, and systems and leadership frameworks often experience disruption. The chances that all employees will view these changes as “ok” is slim. Acknowledging that this process may be disruptive and thanking your staff for their efforts is a more pragmatic and honest approach, and in the long run, staff will appreciate that more than platitudes.
- Answer what you can, even if that means uncomfortable truths. If you know health insurance options may change as a result of the merger, say so in a direct and compassionate way. If a dearly beloved leader or founder may be transitioning out of the organization when the acquisition closes, include that message. While staff may experience frustration, it’s better to be honest with them up front than for them to find out later.
- Try to commit to timelines for the answers you don’t yet have. It’s not possible to have every detail of a merger or acquisition figured out in advance. Field clinician territory is a good example – it’s impossible to know if you have overlapping clinical footprints on an employee-by-employee basis. Staff won’t fault you for not knowing these answers but will appreciate it if you can commit to a timeline for when that process will be determined (and stick to it!).
- Define clear sources of truth. HIPAA and information security are hard enough to navigate as a single organization, but it can get trickier as two agencies come together. Access to company intranets or shared drives may be dependent on email addresses and sign-on information. Getting secure access may be measured in months or even years, and you’ll need a resource hub to post frequently asked questions, job aids, and staff resources like insurance information or links to new timekeeping programs. Agencies should be intentional about building out a unified source of truth for new employees that they can access from day one. There’s nothing worse than mixed messages or inconsistencies, and so investments in the ability for everyone to be working from the same playbook is critical.
- Commit to regular updates and work hard to generate enthusiasm. Mergers and acquisitions take time, often more than a year. The work is just starting when you announce it to staff. Many organizations make a large splash on announcement day and then run into the trap of going too quiet while the hard project management work of integration begins. Organizations can benefit from a proactive communications strategy on a regular cadence. Regularly highlighting integration “wins” can generate enthusiasm and excitement amongst new staff and help train them where to look for answers or tools.
These tips aren’t exhaustive. Employee change management for mergers and acquisitions is multifaceted and complex. To do it correctly will take a proactive strategy, as well as the efforts of managers at all levels finding ways to support frontline staff through the change. Transcend’s larger perspective is that you need a thoughtful plan for how you’ll communicate internally and externally about the merger or acquisition. The time to think about that plan is before you close, not during.
If your organization needs support or advice on employee change management, communications or branding around a merger or acquisition, reach out to Transcend. Our team can provide strategic counsel or even a bespoke minute-by-minute plan and logistical support for your rollout. Investing in your plan can help limit turnover, generate internal enthusiasm and calm market nerves. We’re here to help. Contact us at email@example.com to start a conversation.