Mortgage executives who have undergone corporate integrations during the merger wave of the last two years have found that keeping employees informed is crucial to getting their cooperation during the transition.
"Communication has got to be the key," said James W. Noack, president of Monument Mortgage Inc., Walnut Creek, Calif.
"It's important you make sure everyone knows what's going on," Mr. Noack said at forum on mergers during a recent technology conference sponsored by the Mortgage Bankers Association of America.
Crestar Mortgage Corp. also subscribes to keeping employees in the know, said Brenda I. Wilson, senior vice president in the technology division.
The Richmond, Va., company has undergone two mergers in two years and follows a set procedure designed to foster the flow of information, Ms. Wilson said.
One person from each Crestar Bank unit is delegated as a merger coordinator, responsible for keeping other employees in the loop.
The use of line managers to handle this task has worked well, Ms. Wilson said. "The communication has been good and effective for us."
The approach was preferred to having matters dictated by someone in the executive suite. "When you have a senior vice president calling the shots and cramming down decisions, you get a bad merger," said one conference- goer who declined to be named.
Still, it may be impossible to establish a give-and-take with some employees, especially those whose company is being bought.
"In my role as acquirer, no one will tell me what they're really thinking," Ms. Wilson said.
Open communication and incentives can keep valued employees from running for the door when a merger is announced, one speaker said.
Fleet Financial Group found during its mergers that "people want to take a chance on the open market," said Anthony Cardoza, chief information officer of the banking company's mortgage unit.
To keep talent in-house, the company kept employees current on merger developments, Mr. Cardoza said.
Fleet also offered certain employees "stay bonuses" consisting of 50% of what they would have taken away in a severance package, he said.
Incentives may not be enough to keep some employees, especially if their work environment is dramatically changed.
"A lot of people base their value on their expertise with a system," Mr. Noack said. "If you yank that rug from them, they head for the door."
Staffers who stay on are not immune to feelings of insecurity either. An air of uncertainty can hang over the workplace, especially in the early days of a merger.
"There's a lot of anxiety," said a technology manager at a large northeastern bank that is in the midst purchasing a rival. "We spend a lot of time speculating."
