How to Negotiate Salary Adjustment After Acquisition

Navigating workplace transitions can be challenging, especially after a corporate acquisition. Employees often face uncertainties about their roles, the compensation package, and employment contracts. Among these, ensuring your value aligns with the acquiring company’s direction is crucial.

Knowing how to negotiate a salary raise or adjustment post-acquisition on new terms is a critical skill for protecting your interests while promoting positive relationships with your new employer.

Why is there a salary adjustment after acquisition?

Acquisitions inherently involve the integration of two distinct corporate entities, each with its own compensation structures, benefits, and organizational cultures. Several factors contribute to salary adjustments during this merger process:

• Harmonization of compensation structures: The acquiring company pays employees equitably by aligning salaries and benefits to maintain consistency across the merged entity.

• Cost synergies and redundancies: The hiring company may restructure roles to eliminate redundancies, leading to shifts in compensation based on new responsibilities.

• Market alignment: The acquiring company might adjust salaries to align with industry standards or regional market rates, ensuring competitiveness and fairness in compensation.

• Retention strategies: To retain key talent, acquiring companies may offer salary adjustments, bonuses, or other incentives to encourage employees to remain through the transition period.

Employee rights after acquisition

Employees of acquired companies have specific rights designed to protect their interests during the transition. Key rights include:

Continuation of employment

Employees are generally entitled to retain their positions under the same employment contract unless there is a legitimate economic, technical, or organizational reason for changes.

The Worker Adjustment and Retraining Notification (WARN) Act requires employers with 100 or more employees to provide a 60-day notice before mass layoffs or plant closures, allowing employees time to prepare for employment transitions.

Information and consultation

Employers are obligated to inform and consult with employees about the new companies' benefit package, including a meeting or salary discussion. However, under the National Labor Relations Act (NLRA), employers must negotiate with unions representing their employees regarding significant changes affecting employment terms.

Protection against unfair dismissal

Employees are protected from unfair dismissal during and after the acquisition process, ensuring job security unless valid reasons are provided.

Retention of benefits

The new company must honor existing benefits, such as pensions and healthcare, unless legally modified with proper notice and consultation.

Challenges of negotiating a salary adjustment

Negotiating a salary adjustment post-acquisition presents several challenges:

• Uncertainty and lack of information: Acquisitions often involve confidential negotiations, leading to a lack of transparency. Employees may find it challenging to obtain accurate information about the new company's compensation policies and how their roles will be affected.

• Power imbalance: The acquiring company typically holds more negotiating power, which can make it difficult for individual employees to advocate for favorable salary adjustments.

• Cultural differences: Merging organizations may have different corporate cultures and compensation philosophies, complicating the negotiation process.

• Fear of Job loss: Many new employees hesitate to negotiate assertively, fearing potential negative impacts in an "at-will employment" environment.

How to negotiate salary adjustment after acquisition

To navigate contracts and salary negotiations effectively during an acquisition, consider the following steps:

1. Step 1: Conduct thorough research

   Gather information about the acquiring company, compensation structure, industry salary benchmarks, and the specific value you bring to the organization.

   Use tools like Salary.com's Market Data to access comprehensive compensation insights, ensuring your salary expectations are in line with market standards. For detailed benchmarking, Benchmark Pay Data is essential. It provides precise pay ranges that can strengthen your negotiation strategy.

2. Step 2: Assess your position

   Evaluate your role's importance within the new organizational structure and identify any unique skills or experiences that improve your value.

3. Step 3: Prepare your case

   Develop a compelling argument for your desired salary adjustment, supported by data on industry standards and your contributions to the company.

   If your role is affected by minimum wage regulations, Minimum Wage Data can provide legal compliance insights to strengthen your argument.

4. Step 4: Initiate the conversation

   Request a meeting with the appropriate business decision-makers, whether face-to-face or through just a letter, to discuss your compensation, ensuring you choose an appropriate time and setting.

   For convenience, access compensation data anywhere using Salary.com’s Mobile Access feature. This tool ensures you’re prepared even if discussions arise unexpectedly.

5. Step 5: Communicate clearly and professionally

   Present your case confidently, focusing on your value to the boss's boss and the organization and how a salary adjustment aligns with industry standards.

6. Step 6: Be open to negotiation

   Be prepared to discuss alternative forms of compensation, such as bonuses, benefits, or flexible working arrangements, if a direct salary increase isn't feasible.

Tips for navigating salary adjustment after acquisition

Successfully negotiating a salary adjustment involves more than just presenting your case. Here are practical tips to guide you:

• Keep track of developments within the old company and the new employer.

• Approach negotiations with a positive attitude

• If you believe your rights are being violated, consult with a legal professional specializing in employment law.

• Keep detailed records of all communications and agreements related to your compensation during the negotiation process.

• Understand that negotiations may take time and require multiple discussions to reach a satisfactory outcome.

While the acquiring company chooses its compensation policies, your proactive approach and persistence can lead to outcomes that respect your value and protect your interests. This approach ensures you not only maintain the same salary or better but also build strong relationships with the new organization.

Acquired employees should understand the reasons behind compensation changes, be aware of their rights, and prepare to address the challenges inherent in the new contract negotiation process.