Mergers often make a seller’s investors cheer — and its employees fret.

Acquisitions typically give buyers a chance to cut costs and improve efficiency by closing branches and reducing headcount. Total employees at banks with less than $10 billion in assets have fallen by nearly 23%, due in part to consolidation, according to data from the Federal Deposit Insurance Corp.

While personnel decisions present challenges, they also provide an opportunity to identify talent and solidify the bank’s culture. There are specific things managers can look for to make the best choices for his or her bank, industry experts said. Identifying the right attributes can also help banks looking to hire employees from competitors.

An acquirer may want to "transcend" its existing culture, said Rod Taylor, president of Taylor Mead Management Consultants and Executive Recruiters. “The selling bank’s culture may help you expand into the future.”

Beyond practical concerns such as salaries, the selection process should include a review of each employee’s performance record, Taylor said. The goal is to make sure the institution has the best talent at every level of the organization.

Employees involved in continuing education and professional organizations put themselves in a better position to be retained, industry observers said.

“You have to constantly be developing yourself and your skills,” said Jim Edrington, executive vice president of professional development at the American Bankers Association. “You have to be constantly striving for superior performance and constantly networking internally and externally. You have to be constantly strengthening your relationship with customers.”

Certain areas get more attention than others when the time comes to swing the ax.

Back-office personnel in departments such as marketing, legal, auditing and human resources are viewed as having the most redundancy, while lenders and wealth managers are often left alone following a merger.

Employees who work for the acquiring institution shouldn’t assume they will keep their jobs. A number of banks are bought because they offer an acquirer a chance to improve in areas such as sales or technology, Taylor said.

Bar Harbor Bankshares in Maine went through the employee selection process after buying Lake Sunapee Bank in Newport, N.H., earlier this year.

Management looked beyond technical skills to identify people who “fit in with our culture,” said Curtis Simard, Bar Harbor’s president and CEO. The $3.4 billion-asset company sought to keep a community bank feel where employees often “know multiple generations of their customers,” he said.

“We, like most banks, made our decisions based upon … competencies we had in our organization and what Lake Sunapee had,” Simard said. “There were some redundancies but also sprinkled into that was really [a question of] who wants to remain with the organization and who believes in the vision we’re creating as a combined company.”

Managers typically look at whether someone has “invested their time and energy” into their careers, said Alan Kaplan, CEO of Kaplan Partners, an executive search firm. Those who continue their education by attending industry events, taking courses and participating in the community are showing their willingness to grow and learn.

“In a rapidly consolidating industry, the concept of job security is a thing of the past,” Kaplan said. “It says something for individuals who want to keep their skills fresh.”

Old National Bancorp in Evansville, Ind., aims to treat employees the same way it views each acquisition — as a partnership, said Kendra Vanzo, the company’s executive vice president of engagement and integration.

The goal is to be transparent about potential job cuts while staying attuned to “the talent that comes to us” from a seller, Vanzo said. Some of Old National’s senior managers, including Todd Clark, it chief information and strategic innovation officer, joined the $14.8 billion-asset company through an acquisition.

“Partnerships provide an opportunity to strengthen the team,” Vanzo said.

Old National offers classes through its online university and partnerships with colleges. It also fosters mentoring and resource groups while encouraging employees to join nonprofit boards to gain leadership experience. Management wants employees who are willing to invest time into their careers and have a passion for the company’s culture.

Bank employees can also develop skills on their own, industry observers said.

There are banking events at the state and national level that offer employees a forum to network and stay informed on emerging trends. Some bankers are willing to pay for their own classes, which can prove beneficial over the long run, said Michael Meakem, president of the Center for Financial Training. Social media and analytics are becoming more desirable skills, particularly for those in marketing roles.

“There’s a little bit for everyone out there,” Meakem said. Training “shows you have invested in your future and yourself.”

Community involvement also allows employers to hone their leadership skills. Bankers can find new employment through connections made while networking, Kaplan said.

It is critical for bankers to recognize the inevitability of industry consolidation and know whether their bank could be on the block, said Mark Angott, president of Angott Search Group.

“Don’t be blindsided,” Angott said. “If you’re in an area that could be consolidated, you better understand what your options are going to be.”

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Jackie Stewart

Jackie Stewart covers community banks and mergers and acquisitions for American Banker.