Mergers are no fun, even with redundancy pay

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Then they and perhaps their family can be put through an anxious, gut-wrenching time, which is not reflected in the press coverage.

Contrary to popular belief, not everyone walks away from a banking merger with enough money to retire. Packages may be generous compared to other fields. But they can drain away quickly, especially if it takes longer than three to six months to find another job.

Tony Tucker, managing director of Executive Resource Group (ERG) and a former head of human resources in London at SBC as well as Bank of America says, &quotThe people who are the most vulnerable are those in their early to mid 40s who have a family and mortgage and are too young to retire.

&quotThis could be a world-shattering blow to them if they are on the wrong side of the merger. They need to be handled with care and attention which is not often the case now. It is more a matter of simply 'close the door behind you'.&quot

Michael Robinson, head of global human resources at Invesco, and veteran of four mergers, says that in his experience the most successful mergers are those that address the human side from the outset. &quotThere is a tendency for corporate finance people who are putting together these deals to only talk about the numbers.

Most mergers and acquisitions take on a macho culture and the very fact that one firm is buying another can bring out the worst behaviour in people.&quot

A former salesman at Donaldson Lufkin and Jenrette knows what can happen. &quotThe first we heard about Credit Suisse First Boston taking us over was on the Monday morning. People were fairly jocular as the senior management from CSFB reassured us that we were all on a level playing field.

&quotHowever, it soon became very clear when the CSFB desks heads walked in that it was going to be a completely different story. They let us know that we were not starting at an advantage.

&quotIn the end the person who could have been my boss spent less than 15 minutes with me and then I just waited to be contacted. I knew then there was no job for me.&quot

A former Bankers Trust investment banker, who left a year after the merger with Deutsche Bank, is also critical. He said staff were not told for months which ones would have to leave. The result was that noone could focus. They played office politics or looked for other jobs.

Beth Taylor of the career management company Meridan points out that redundancy is about not just loss of income, but of self-esteem.

&quotFor many people, their identities are connected with their careers and if you take that away before they are ready then it can be devastating.&quot

The toll on the family is also underestimated, she says. &quotOften we find partners or spouses have much higher levels of stress than the person actually going through it. They feel helpless and out of control.&quot

A wife of a former DLJ trader in London admits, &quotWhen you marry someone in the City, the risk that he may lose his job is there. However, I do not think I believed the risk would materialise.

&quotWe had just moved, we had a large mortgage and the kids were at private school. I know compared to other people we are extremely lucky because he got a package but it took longer than we thought for him to get another job. I felt the rug had been pulled from my feet.&quot

She felt it was vital not to let her husband and children know how worried she was. She also told only a few close friends about the situation. &quotThe hardest thing was going to the playground twice a day and pretending that nothing was happening. This is because I think the higher you go, the less forgiving your acquaintances can be.&quot

HR departments can help soften the blow, says Tucker. The way the news of redundancy is delivered is important, as is support such as outplacement services.

Robinson also believes that good communication is vital. &quotThe first thing is to get people who are known and trusted to convey the message. Also, it should be in small groups or on a one on one basis.

&quotA set written piece of work sent to everyone may appear as propaganda and only create more resentment and distrust. You have to convince people who are staying that the new organisation will be a place they want to work in. For people who are leaving, you have to explain why and try to help them.&quot