Mergers and acquisitions (M&A) are exciting moments in a business’s life cycle, often heralding opportunities for growth and expansion. However, these transformative events also bring workforce transitions that, if mishandled, can have lasting negative impacts on organizational reputation, employee morale, and overall business success. A critical—yet frequently overlooked—component in this process is outplacement support for transitioning employees.
The Fallout of Neglecting Outplacement Services
When companies fail to prioritize outplacement during M&As, the consequences can be severe. Organizations can face public and legal backlash if outplacement is not prioritized. Employees facing job loss often experience heightened anxiety and frustration, which can quickly ripple across the organization. Without proper support, these individuals may leave with negative perceptions of their employer, potentially voicing their dissatisfaction on platforms like Glassdoor and LinkedIn. This public feedback can damage the employer’s brand, making it harder to attract and retain top talent in the future.
Furthermore, the absence of outplacement services can lead to prolonged unemployment for former employees, increasing the likelihood of legal disputes and tarnishing the company’s reputation.
Perhaps most importantly, not providing career transition support during an reduction in force can severely impact the emotional state, morale and engagement of current and former employees. For “surviving” employees, witnessing poorly managed transitions can erode trust, resulting in diminished productivity and higher attrition rates. The emotional consequences can be even more severe for former employees. A Pew Research Study found that 81% of adults have an increase in mental health issues after being unemployed, including increased anxiety, depression, conflict with loved ones, or feeling a loss of identity.
Why Outplacement Is Essential
Outplacement services, such as those offered by CMP, are designed to mitigate these risks. By providing departing employees with personalized career coaching, resume building, and job search resources, companies demonstrate a commitment to their workforce, even during challenging times. This proactive approach not only protects the employer brand but also reinforces a culture of care and respect.
For HR leaders, integrating outplacement into the M&A process is a strategic investment. It helps maintain employee engagement, ensures smoother transitions, and reduces the risk of reputational and emotional harm. Effective outplacement services also accelerate re-employment for transitioning employees, minimizing financial strain and fostering goodwill.
The Business Case for Outplacement
M&A activity often pressures HR leaders to balance cost containment with employee experience. While outplacement services may seem like an added expense, they are actually a cost-saving measure. Legal action is reduced by 72% among companies that invest in outplacement. Additionally, they benefit from higher levels of trust and loyalty among the remaining employees, which translates into sustained productivity and reduced turnover.
According to industry data, businesses with strong outplacement programs are 81% more likely to reduce the time it takes transitioning employees to find new roles. This expedited process reflects positively on the company, showcasing its commitment to social responsibility and ethical practices. These outcomes are not just beneficial but essential for long-term success.
Conclusion
Neglecting outplacement during M&A is not a risk any company can afford to take. The potential fallout—from damaged reputations to disengaged employees—far outweighs the cost of providing support for transitioning employees. For HR leaders in mid-market companies, outplacement services like those offered by CMP represent a critical tool in navigating the complexities of workforce transitions. By prioritizing outplacement, businesses can protect their brands, empower their employees, and pave the way for a successful merger or acquisition.
Ready to take the next step? Contact CMP today to learn how our outplacement services can help your organization navigate workforce transitions effectively. Plus, don’t forget to download our free resource, the Definitive Guide to Outplacement, to explore the benefits and best practices for supporting your workforce during mergers and acquisitions.
