My employer was acquired. How to prepare?

[curtain827]

My employer (a small, local company, around 50 people) was acquired by a giant company (over 300k employees worldwide).

Our CEO assured us nothing will change for now, we will remain our own company but 100% owned by that giant. They assured us no one will get fired and people tend to agree that he is a good guy so he's probably telling the truth.

The new overlords are coming over soon to have us sign new employment contracts, get a small raise, a signing bonus etc.

I haven't been with the company very long and this has never happened to me before.

What should I watch out for? Any pitfalls/traps/gotchas?
Should I negotiate a higher salary/package with the new owner (who is orders of magnitude richer)?
Would anyone have any experience to share with that situation?
What will it change for me in terms of opportunities, growth, politics..?

I'm a software engineer if that makes a difference.

Thanks!

[plog]

Your boss is loyal to his company and the new company knows this.  If things are going down, they would not let him be privy to it until shortly before they were implemented.  So, while your boss is a good guy, his assurances can't be fully taken as truth.  You should always have an updated resume and escape plan--regardless of current events. 

The big thing to look out for is redundancy from other parts of the larger organization.  Could the work you guys do be shifted somewhere else in the company?  If so, that's something to be leery of.  Are you a cost center or do you actually make the company money?  Cost centers are targets of layoffs.  Another thing to look for is if higher up in your original company are leaving or have a hard contract where they must stay x many months?  There's usually a transition period then higher ups start jumping ship.  If a lot of them take that first opportunity its a bad sign.

Now the good things.  A raise and/or a signing bonus is an investment in you.  No need to pay money to future deadwood.  So that's a good sign.  Future opportunities just got a lot better.  Companies usually want to hire from within--so the number of jobs you have a leg up on increased a lot.  You probably can't negotiate a much larger salary.  Companies like that have very formal pay structures.  You'll probably come in at Pay Grade blah blah blah which entitles you to this salary range.  You can point to your expierience, but with larger comapnies hands are usually tied for people giving out raises.  I would try to get into the best pay grade/category/whatever they have, even if its in the lower portion of that grade.  It's just a BS system, but the higher status you can get in that BS system will benefit you in the future.   

And again--always have an updated resume and an escape plan.  Even from a job you love that is 100% stable.

[curtain827]

Thanks for the reply.

Higher ups have a lock-in period of a couple of years, if they jump ship before they leave a ton of money on the table. From what the CEO said, the terms were put in the contract as conditions for selling the company and are binding: we remain independent (at least for the first couple of years, before the higher ups are released) and there are no lay-offs.

Any tips on how to negotiate a better pay grade? How do they decide which pay grade you fit in? How can I even know what the pay grades are?

[Spondulix]

The company my husband used to work for went through this. The corporation did exactly what they said - it's been a few years and they've pretty much stayed hands off from the day to day business and they still operate under the former name. There's been changes from an executive/operations standpoint and they have cut a couple projects because of redundancy. If anything, the business is probably doing better because of the capital and cause they have people with better business experience helping out at the top. The employees vested stock got transferred to the corporation, which can be a huge perk (and one you might ask about vs asking for a raise).

I've worked for a couple companies that were taken over (not on the corporate level). There were always signs that something was going wrong - in particular the owners were either physically or mentally absent from the job. If the new company starts doing inventory that can be a bad sign. If they have people coming to observe you that's obviously a problem. Especially in software engineering - I know a couple guys who were either flown overseas (or had someone flown in from overseas) to learn their job months before they were fired.

[Spondulix]

Also, there was a fair amount of turnover after that company got bought. The company climate changed some and others (who were probably already disgruntled or had reason to leave) took their chance to bow out. Maybe others will disagree with me, but I wouldn't go for the throat for a raise right now. If the opportunity comes up for a raise, definitely take it... but chances are there will be some movement within the company and opportunities with the corporation in the next couple years. Check online for past ad listings cause most corporations are required to post job listings online (and they'll probably promoting from within). If you're a team player about the transition now it may come back to help you more down the road - especially when there's not 50 other people trying to get a raise at the same time.

[plog]

Pay grades/rates/levels etc. are a made system for HR to keep a handle on salaries.  Most likely they will look at your title and say 'Your a Software Engineer, in our company that translates to PR-14, so we will start you in the middle of that grade which is $X, you'll be eligible..blah blah blah'.     

What you need to do is say 'Yes, technically my title is Software Engineer, but actually my job duties are more of a [insert BS title that seems more important here (e.g. Senior Software Engineer)], so I believe I should come in as a PR-11 (or PR-17 if higher is better).'

You'll have to find out about their made up HR pay system through them.  Check out their website and see what jobs are available, perhaps they give information that you can deduce that system.  If not there, then thier intranet should have that data once you have access to their intranet.

[curtain827]

Isn't it too late once I have access to the intranet etc? I dont suppose they'll do anything until the new employment contract is signed. I checked on their website and job offers but there are no pay grades mentioned there.

I'm not sure their ads are too realistic either, they are hiring new graduates (says so in the ad/job title) but are asking for 5 years of experience. What?

[neo von retorch]

300k? HP?

Anyway, when that happened to me, what sucked was that I had a good manager...that was promoted in the new company, and it left a big void. Some less ideal (for management) people were left to handle the developers and software projects, and it wasn't pretty. A lot of developers left, including me. That isn't a given, by any means. In our case, the smaller company was acquired in no small part for their leadership, so the leadership quickly ascended the ranks of the big guys (particularly in the U.S.)

Best of luck; I hope it brings you good challenges and opportunities!

[curtain827]

It seems they bought the company because we were able to achieve what they failed to do. So they bought the product and the expertise. Everyone  in a management position has some kind of lock-in/non-compete clause that pretty much ensures they'll stay with the company for the next couple of years.

[Rezdent]

They bought a software product to complement their existing software, correct?
In that case, they will likely start rebranding, and possibly teasing apart the components to integrate just the desired parts inside their existing platform.
That can be hard to watch.
I suggest learning more about how to support their products if possible.  That will make you more versatile and allow lateral movement in the future.

[frugaliknowit]

I think generically, a small company being gobbled by a much larger is "safer" for an employee than large being gobbled/merged by/with another large due to many redundancies.

Two of the other responses were particularly insiteful:  Plog and Rezdent.

[Distshore]

Hi,

I have been through several acquisitions on the buy side because that's the major part of my job - acquisitions.  Usually a big company acquiring a small one for a technology you are pretty safe if you're a technical person, less so if you're the CFO or HR person for the small fish. 

Often the acquirer will realise some small economies of scale by taking over your basic business infrastructure needs (logistics, controlling, HR etc.) but really needs the tech and commercial people to stay, because the tech is useless without the knowhow that's usually locked in their heads. 

Take your raise/signing bonus and be happy; there's always a higher turnover after an acquisition and the acquirer will often want the best people to stay on and take higher positions later after they've had a chance to assess their talents and motivation.  Hiring talent is expensive and a crapshoot, so if they find you're good (be proactive, help out, speak up, manage the project where appropriate etc.) you'll probably find more opportunities.  In my experience though, the squeaky wheels are usually the ones you want to get rid of because they demand a lot and don't contribute in line with that.  Possibly that's a biased opinion, but it's likely your acquisitions team will think similarly. 

So if you want to stay, show your value then ask for your raise, and be prepared with another job when you make that request.

[BTDretire]

 My daughter's company merged with an equal size company. By the next Christmas party, half the people that were in the picture from the previous Christmas were gone. She lost her manager, and then another, bonus's were cut, the family atmosphere disappeared, micro management of jobs started. She decided to go back to college and get another degree or, it looks like two.
  This was not IT, so YMMV, good luck.
               

[GetItRight]

The hammer will come down eventually. Could be a few weeks could be a year, but there will be a mass firing or a slow painful thinning of the herd. If you are a redundant or easily outsourced to corporate position (finance, IT, etc.) plan to be fired. It may not happen but unless the company is doing very well and the overlords are happy to just take a slice off the top, they'll be looking to cut expenses and gain efficiency.

I've been through several acquisitions and have not been fired but have seen many others fired. Went from having a team to work with to just me, several times. The difference between me and the ones fired in my department has mostly been I can do it all if I have to (though not as efficiently) and am willing to put in the time. Since I could do their jobs as well as my own, I stay, suffer for a while, then get a substantial raise and green light to hire help and rebuild the department. It's tiring but I think it has worked out well for me. Some good people will just draw the short straw and eventually do fine or better somewhere else, others will stay and the company will be stronger for it, and some were just dead weight.

[Spondulix]

Two of the other responses were particularly insiteful:  Plog and Rezdent.

Lol, you mean everyone in the conversation but me and neogodless. Let me guess... are you a software engineer? ;)