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How Do You Communicate Benefits Changes After Being Acquired?

By: Sandy McMahon

A West Coast company was recently acquired by an East Coast company. The acquiring company wants to merge benefit structures between the two entities. Both entities contribute a similar amount toward benefits; however the distribution of benefits between retirement plans, health plans, and other benefits varies considerably between the entities based on demographic differences as well as differences in regional custom. How does the CEO of the West Coast entity approach staff about the pending changes in benefit structure so that it will not seem a loss of benefits?

Advice from a group of CEOs:

Ideally, you want to get employee input on what is and is not important to them in their benefit package before the overall package is finalized. This will provide you data with which to negotiate in your employees' interest.

Ask the acquirer whether a "cafeteria" benefit program is feasible. This would allow your employees to make choices among benefit options, and to fund these choices either at a company-paid base level or to supplement their choices through payroll deductions. It will help your employees to transition to the new plan and help retain key employees during the transition period.

Make sure that the East Coast entity is aware of regulatory requirements from the state of California that may require them to retain some California-specific benefits.

Once you have finalized your new benefit package, how do you best present this package to the employees? First, emphasize that the Company is offering and funding this benefit and specify the amount that the Company is funding as a percent of salary. Create a grid mapping of the full program:

* Amount of company contribution;

* Old program and benefits;

* New program and benefits;

* Use the grid to demonstrate that while the allocation may be different, the Company contribution remains the same and the total value of benefits offered remains the same.

If, based on your previously collected input from your employees, you know that a highly valued benefit is being reduced, consider offering a short-term subsidy. This will ease transition of benefits.

Be sure that you are clear and concise in your communications of the new plan and changes to the employees. Be sure that the decisions that your employees must make in the new program are fully and clearly explained. If you have access to industry or regional comparisons for like-sized companies, and those comparisons put your company in a favorable light, share these as part of the communications package.

Article Source: http://articles.tiptopweb.info

Sandy McMahon is publisher of Ceo2Ceos (Ceo2Ceos.com), a non-commercial site for executives to share best practices. He is also President of Executive Forums of Silicon Valley. With over 20 years of executive experience, Sandy has a BA from Brown, an EdM from Harvard, and an MBA from Duke.

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How Do You Communicate Benefits Changes After Being Acquired? addthis_pub = 'ex_plo_rer';

How Do You Communicate Benefits Changes After Being Acquired?