Involving staff in benefit talks eases merger angst

Following its 2000 acquisition of part of research marketing firm FGI, Capstrat made a potentially controversial decision when it melded the benefits of the two firms: The PR firm would do away with FGI's childbirth leave.

Following its 2000 acquisition of part of research marketing firm FGI, Capstrat made a potentially controversial decision when it melded the benefits of the two firms: The PR firm would do away with FGI's childbirth leave.

"We didn't think you should provide paid leave for one medical concern that women generally ages 20 to 40 might be eligible for, but not other employees," says Ken Eudy, CEO of Raleigh, NC-based Capstrat. "At the same time, we wanted to be perceived as family-friendly."

When it comes to agency acquisitions, this is the kind of communications minefield firms navigate in the sensitive area of benefits packages. Employees are already worried during a merger, but PR firms - both those acquiring and those being acquired - can help sidestep additional anxiety. Capstrat involves its staff: As soon as an acquisition is announced, the firm sets up committees designed to examine issues, including benefits.

"It is about having people engage in a passionate discussion, making them feel part of the [merger] process," says Eudy. "[Our] hope is [that] a third of employees have participated in one of the merger committees."

That process made it easier when the firm eliminated childbirth leave because the committee decided it would be compensated by general medical leave and flexible spending accounts, in which employees could save pretax dollars toward child-care costs, a perk not offered by FGI.

Edelman is currently bringing into its fold A&R Partners, one of Silicon Valley's largest PR firms. Laura Pietraszek, VP of US benefits at Edelman in Chicago, could not comment specifically about the acquisition, but she says timing is important when it comes to changing benefits packages.

"We look at whether we'll move [the new] benefits over immediately, or wait and disrupt them later," she says. In most cases, Pietraszek adds, Edelman opts for a later date. "This allows employees time to become used to the idea of being part of Edelman," she explains, and also permits for more face time between HR staff and employees of the acquired agency to discuss benefits changes.

When dealing with staff, managing expectations is key. "Some things will change for the better. Some may not; they may just be different, which doesn't make it bad," says Andy Hardie-Brown, COO of Allison & Partners in New York, which earlier this year acquired Blattel Communications.

In other words, staffers should never be told that benefits will stay the same, even if they might. "You have to be clear about change from the start," Hardie-Brown says.

In some situations, a firm being acquired by one with a more generous benefits package can use this fact to "sell" the merger to staff. When earlier this year Jericho Communications was bought by Lime Public Relations & Promotions, a division of Kirshenbaum Bond & Partners, Jericho came into a stronger benefits package.

"The benefits [package] was one of the greatest things to say to staff about the merger," says Eric Yaverbaum, president and co-founder of Jericho and now Lime's managing partner and client services director. "As opposed to me saying, 'This merger is going to be great,' benefits are very tangible to employees."

Key points:

After a merger, don't pretend the benefits package won't change: It likely will

Allow staff to become used to the merger before overhauling the benefits

Benefits are tangible. Use them to help "sell" a merger to employees

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