Situation: A company was recently acquired. The acquirer wants to merge benefit structures between the two entities. Both contribute a similar amount toward benefits; however the distribution of benefits between retirement and health plans, and other benefits varies considerably. How do you approach the staff to communicate changes in benefits following an acquisition?
Advice from the CEOs:
- Ideally, you want to gather employee input on what benefits are important to them before the overall package is finalized. This will help you to negotiate in your employees’ interest.
- Make sure that the acquiring entity is aware of state regulatory requirements that may force them to retain state-specific benefits.
- National companies often employ a cafeteria benefit strategy that allows the employees to make choices among benefit options, and fund these choices either at a company-paid base level or allow employees to supplement their choices through pre- or post-tax payroll deductions. There are numerous providers who offer cafeteria plans.
- What’s the best way to have a conversation with employees once the new benefit package has been finalized?
- 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 the full program:
- Amount of company contribution
- Old Program and benefits
- New Program and benefits
- Changes in allocation and changes in the total value of benefits offered.
- 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.
- If you know that a highly valued benefit is being reduced, consider a short-term subsidy to ease the shift.
- Be sure that you are clear and concise in your communications of the new plan and changes to the employees. You may want to have an outside consultant on hand to cover specific questions.
- Be sure that any decisions your employees must make in the new program are fully and clearly explained.