A youngster about to join a large enterprise after completing a degree at University asked an interesting question last weekend. ‘Does an enterprise that acquires another company use the purchase as a smokescreen to shed older, long-serving, higher-paid employees?’ That’s an interesting and unusual question from someone at the very start of their career. So why did they ask it? Well, firstly their new employer has acquired another substantial company and restructuring activities are underway. Secondly, they knew the Badger had some experience in navigating a number of mergers and acquisitions. Lastly, the tech-savvy youngster had come across online chatter that his new employer’s older staff with long service were being disproportionately targeted during restructuring. The youngster, with no experience within large enterprises, anticipates a long career with their new company, but they were a little perturbed that their new employer might possibly be engaging in age discrimination, something that’s prohibited under the UK Equality Act 2010.
Answering required words that were balanced, honest, and rooted in personal experience of post-acquisition integrations. So, what did the Badger say? Firstly, that acquisitions often lead to reorganisations which can legally justify redundancies based on performance or role duplication at any age or level of seniority. Loyalty and long-service counts for nothing in such a scenario, and older employees may be more vulnerable because they typically have higher salaries and benefits, which means shedding them can significantly reduce payroll costs. Secondly, an acquisition can be a vehicle to change an enterprise’s culture, especially in fast moving industries subject to rapid innovation pressures. This always favours the retention of younger, tech-savvy staff and those with in-demand skills. Thirdly, not every acquisition is a smokescreen for eliminating older, higher-paid employees, but, in reality, some acquirers do quietly use their purchase to shed older, higher-paid employees because they know that it’s normally difficult in these circumstances for individuals to prove age discrimination for their redundancy. Do acquisitions disproportionately shed older staff? Some do, some don’t.
The youngster nodded, reaffirmed their intent on a long career with their new employer, and asked if the Badger had any advice for the long term. Yes. Maintain skills that are current and valuable outside your company, as mergers and acquisitions rarely reward loyalty or long service. As you get older and more experienced, watch out during acquisition integration activities for a) silence about future roles for you or your peers, b) performance reviews, and c) role redefinitions. These often signal something is afoot that affects you personally. Also, never forget that HR works in your employer’s interest, not in yours.
The youngster grinned and said they obviously had lots to learn! The Badger smiled too, pleased that he’d sown a few seeds of awareness in a youngster who will soon learn that things are never quite what they seem inside organisations when it comes to workforce matters.