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Who Stays, Who Goes?

January 1, 2011

One of the toughest decisions to make in an association merger is how to merge staff. You—and your employees—know there’s no room for two education managers or two professional standards administrators. So, how can you blend, balance, and build the staff your new organization needs with the least amount of stress?

First and foremost, define the goals and initiatives of the merged association. It is only after you determine your long-term goals that you can select the staff with the skills you’ll need to accomplish them.

Although the decision makers in any merger (such as a merger leadership team, joint leadership team, or outside facilitator) will hammer out the new organization’s programs and services, the chief executive officer of the new organization should make staff decisions. This EO may be from one of the merging associations or hired from outside.

Keep everyone informed

Certainly, at the initial stages of merger talks, all staff—AEs included—are anxious about their jobs. Your only weapon against rumors and low morale is communication.

Hold staff meetings (with both individuals and groups) to explain the reason for the merger as well as the goals of the new organization. Also, inform staff as soon as possible about the process and timeline for making staffing decisions.

To keep your most talented staff from jumping ship the moment merger talks are announced, use your internal communications to focus on the projected strength and stability of the merged organization, as well as any increased ability to offer more benefits to employees.

Your staff will need to support you and your initiatives to keep the association operating effectively during the transition. Plus, they are your best form of marketing during change. If your people don’t feel good about the change, your members will know it quickly.

Matching skills with need

To build your new association staff, start by documenting every employee’s skill set, including his or her level of proficiency with the software and systems you plan to use in the new organization—financial systems, association management software, and MLS software, to name a few. Assess who has key organizational knowledge and experience in critical areas, such as event planning, public relations, education, and government affairs. Finally, compile performance reviews, and ask employees where they see themselves in the new organization.

Now, compare these skills to the long-term goals of the new organization to create job descriptions for these positions (see sidebar). List the job’s responsibilities, but also define the level of decision making required for the job and the amount of time allocated to each task.

Legal consideration

Be sure that when you’re assessing who you’ll keep and who you’ll terminate, you can justify a business reason for your actions. You don’t want your decisions to be perceived as discriminatory.

What if you have two stellar employees with the skills you need but only one position available? Have both employees “apply” for the position as you would a new hire, interviewing both with the same questions. After the interview, consider whether the person who isn’t getting the job could be utilized elsewhere. If not, notify the employee of his or her termination date and any benefits he or she is eligible for. As tempting as it may be, do not make any promises about rehiring. You never know what the future holds.

During the hiring and firing process, it is useful to review all current employment contracts to determine whether additional compensation will be due and/or whether benefits will need to be delivered for early termination.

Dignity and respect

When meeting with the terminated employees, always treat them with the dignity and respect they deserve. Remember, these are employees who served your association well, and you never know whether they may prove to be allies in the future. In addition to being common decency, this is common sense. Employees who remain will be watching very closely to see how the terminated employees are being treated. A negative tone could sour morale from the start.

Moving forward

In addition to your staff needs, determine whether you’ll need some “transitional staff” in the short term to see you through the merger. Do you need full-time positions? Or can some of the work be completed on a part-time basis?

While building your new staff, communicate the planned organizational chart so that everyone is clear about their roles and to whom they report. You may have new levels of staff, such as a director level between the managers, in addition to the CEO po-sition that didn’t exist previously.

In an ideal world, you’d be able to retain or find jobs for all of your employees, but that’s rarely possible. During a merger, focus on the goals of the new organization you’re building and find the staff that can best help you deliver your promise of greater benefits for your members.

Reorganizing Staff Benefits

Along with merging staff comes merging your staff benefits, such as health and retirement plans. Although offering your employees the best plan options from both plans sounds ideal, it may not be practical. Not only will you need to compare the plan provisions, but you’ll need to consider the costs as well. Even if you can afford to offer the best benefits of all plans, economic conditions may change and those benefits may have to be adjusted accordingly in the future. Whether you can keep one of the association’s plans may depend upon factors such as: 1) whether the new association will be under a new tax ID number; 2) what state the association is located in; and 3) when the benefit contracts expire. You’ll need to check your benefit agreements to determine the contract’s renewal date and the amount of notice that is required to terminate the contracts, if necessary.

Be sure to also assess the following plans to determine which benefits will be continued or modified:

  • Health insurance
  • Dental insurance
  • Vision insurance
  • Short-term disability
  • Long-term disability
  • Life insurance
  • Employee assistance programs
  • Flexible benefits

Section 125 Plan

  • Pre-tax transportation benefit
  • Sick or personal days
  • Vacation and holidays

You may be able to reduce health and dental insurance costs by increasing copays, deductibles, and out-of-pocket maximums. If you have a retirement plan, I strongly recommend that you seek legal counsel, as these plans are highly regulated. Some may require plan amendments and specific timely notifications to plan participants if changes need to be made or if the plan needs to be terminated. You’ll want to assess each plan’s design, provisions, investments, administration, contribution amounts, and costs. Also, be sure to compare employee manuals to determine which policies you will want to continue under your new association.

Some Mergers Mean Hiring, Not Firing

The blending of staffs from the REALTOR® Association of Greater Miami and the Beaches and the REALTOR® Association of Miami-Dade County was surprisingly easy, says Teresa King Kinney, RCE, CAE, CIPS, CEO of the newly formed Miami Association of REALTORS®.

“Duplicate positions for member services gave us almost enough positions to cover our 25,000 members, 1,000 seminars and events, and six offices,” she says. “It’s pretty surprising, but there were no other duplicate positions.”

In fact, Miami hired an additional education executive, accounting professional, and graphic designer. The other CEO is pursuing opportunities elsewhere and only one of that CEO’s staff elected not to remain. To facilitate the blending, staff participated in a two-day retreat to get to know one another and learn their new roles in the organizational structure.

“The merger has already given everyone a chance to grow, learn, try new things, and also do what they each do best,” says Kinney.

Donna Garcia is director of Human Resource Services for the NATIONAL ASSOCIATION OF REALTORS® in Chicago. She can be reached at 312-329-8311 or
dgarcia@realtors.org.