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After a Merger Helping Employees Move On

April 1, 1997
Related Topics: Mergers and Acquisitions, Downsizing, Featured Article
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To the casual observer, the catered reception at one of Bethesda, Maryland's finer hotels could have been just another business event. It could've been the kickoff of a marketing program; or a special pat on the back for record sales. As the evening came to a close, the well-dressed men and women promised to keep in touch.

Their camaraderie, however, had been forged through layoffs nine months earlier. Moreover, the company that invited them to the event was the same one responsible for eliminating their jobs.

Now, why would anyone want to share hors d'oeuvres and wine with those who let them go? The reasons are based upon Arlington, Texas-based LSG/Sky Chefs' fair treatment, serious investment and frequent communication with its employees after the acquisition of Bethesda, Maryland-based Caterair International.

LSG/Sky Chefs, a provider of in-flight catering services, has always advocated fair treatment of its employees. In 1992, for example, the company downsized as a result of the industry's competitive market, yet employees received transitional assistance, says Michael Z. Kay, president and CEO of LSG/Sky Chefs.

As plans for the acquisition unfolded, leaders at both companies were rightfully concerned about two things: lower morale and lower productivity. The uncertainty of one's future could provoke employee anxiety and vulnerability to rumors. Even high-level managers and executives might dust off their resumes and initiate an escape plan. In addition, stressed employees might become ill and increase their absenteeism. The LSG/Sky Chefs human resources leaders, therefore, designed these quality checks and measures to ensure a smooth transition:

  • A concise definition of selection/ de-selection processes
  • A thorough comparison of compensation parity parameters between the two uniting organizations
  • A thorough evaluation of skill sets
  • Development and implementation of effective communication processes
  • A well-defined schedule of event benchmarks.

"Integrating both of the communities was an immense undertaking," says Darwin Day, LSG/ Sky Chefs' director of policy and programs, and team leader of the career continuation project. "We were faced with geographic, financial, emotional and leadership issues from the beginning. So we had to find solutions that made sense, fit stringent ethical standards and met a very demanding schedule of events." The acquisition transformed LSG/Sky Chefs from a company of $468 million in annual revenue to well over $1.5 billion—quite a leap by any standards.

Before the acquisition, Caterair had 118 operations. LSG/Sky Chefs had 52. After the acquisition, the post-transition company had 93.

Once the acquisition was officially scheduled for September 29, 1995, HR teams from LSG/Sky Chefs initiated career planning for transitioning employees. They also formed a partnership with a professional career-transition consulting firm. The concept included utilization of a full-service career-transition center equipped with the following:

  • Individual and group career-transition counseling
  • Group workshops emphasizing networking as a primary tool
  • Resume preparation
  • Additional workshops on interviewing techniques and hiring myths.

Because Caterair's corporate offices were most immediately impacted by the acquisition, the two companies established the career-transition center in Bethesda. Also, LSG/Sky Chefs chose Dallas-based Reedie & Company/Manchester Partners International (MPI) to facilitate its global transition process. Among those included in discussions about the center's needs and operation were the vice president of HR for Caterair and several representatives from LSG/Sky Chefs, including Day.

The center opened on September 27, 1995, and operated through June 30, 1996. During its nine months of operation, 42 executives, managers, professionals and nonexempt employees used the center's resources. Out of the 42, 30 individuals were engaged in new career options prior to closure of operations on June 30. All those who weren't resituated in new positions by June 30 either were close to securing new employment or had chosen to pursue nontraditional, consulting or part-time career options.

"That's a tremendous success rate," say Day. "We recognize that in today's environment, people who are treated with respect, dignity and genuine concern during difficult transitions make the smoothest transitions. These employees have great value, and we wanted to do all we could to assist them."

Workforce, April 1997, Vol. 76, No. 4, p. 55.

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