Category Archives: Communications

Employee communication considerations for M&As

This blog post is the fifth in a series of six that will highlight considerations for and the impacts of employee benefit plans on mergers and acquisitions (M&A) transactions. Click here for additional blogs in this series. To learn how Milliman consultants can help your organization with the employee benefits aspects of M&As, click here.

What about me? That’s the number one question employees are thinking about when they hear the first whisper of M&A activity.

• Will I have a job?
• What will my benefits look like?
• I was on track for that promotion; what now?

In her blog post “Employee benefit plan considerations for M&As,” Cheryl Frost writes, “In addition, appropriate, well-timed communication is critical to talent management—the most critical asset in the deal. Retention of key management is sensitive and important. Communicating the strategic vision and benefits of the transaction to employees is a key component to the success of any transaction.”

An M&A is the time for more communication—not less. Communication efforts are often spent on getting the attention of employees. During times of change, you have their attention. Use it! This is a unique time to reaffirm the value of the total benefits package available to employees and their families. Promote your financial and health benefits. Remind them about the Employee Assistance Program. These are benefits that are available any time and may be particularly helpful during times of change.

Six tips for an effective M&A communication strategy
If you’re already communicating with your employees on an ongoing basis, you have the foundation on which to build an effective M&A communication strategy. Be sure you:

1. Communicate early and often. Change causes stress. And stressed employees can cause loss of productivity. So get in front of it! Even if you don’t know the answers, it’s OK to say that. Just let employees know when they can expect an update, and then follow through with it.

2. Know where you stand. If you are not sure how employees are feeling or what you need to communicate, review the data. Some indicators of employee stress or disengagement include:

• Higher call volume to human resources (HR) or vendor call centers
• Trends in your benefit claims
• Spikes in 401(k) loans
• An uptick in sick days
• More traffic to your website or specific searches

3. Control the message. Make sure employees get the news from you—not the media or the watercooler. Use every communication channel you have available and make sure the message is consistent. Consider a microsite devoted to M&A information, and update it regularly as more information becomes available or changes occur.

4. Listen. Whether this means town hall meetings, webinars, focus groups, or a simple, dedicated email address, give employees an outlet for questions. This simple act involves them in the process, builds buy-in, and allows you to adjust your communication strategy in response.

5. Use straight talk. Share the facts. Help employees understand the business perspective on what’s happening and why. Let people know what to expect and when, and avoid platitudes or promises.

6. Keep your managers informed. Managers are often the go-to source for employee questions. Make sure to arm employees with positioning statements, FAQs, and where they can go for more information.

A successful merger or acquisition is supported by a thoughtful, well-planned and executed communication strategy. Get your communication consultant involved from the beginning.

Infographic: Five ways to motivate Millennials through employee communication

According to Gallup, Millennials make up close to 40% of the United States workforce. However, less than one-third of them are engaged at work. Encouraging Millennials to take action concerning their employee benefits can be a difficult task. Fortunately, there are several communication tactics organizations can use to motivate even the most uninterested Millennial. The infographic below, based on a blog post by Milliman’s Jessica Gonchar, highlights five of these tactics.

Recruiting a workforce with intergenerational strategies

By 2020, five generations will work together at some companies for the first time. Human Resources (HR) departments that prepare to meet the different needs of each generation will secure the best talent. A recruitment approach that aligns corporate business strategies, internal equity, and employee compensation can be an effective strategy. Milliman’s Anthony Halim offers perspective in his article “Effective intergenerational employee compensation approaches.”

Communicating a defined benefit plan conversion

Milliman consultants assisted one particular multiemployer defined benefit plan’s transition to a stabilized Milliman Sustainable Income Plan™ (SIP), formerly known as the variable annuity pension plan (VAPP). The conversion required a communication strategy conveying the new plan’s design to participants. In this article, Jessica Gonchar describes how the firm implemented an employee communications campaign explaining the basic principles of a SIP and how it differs from the prior plan.

Milliman Hangout: Milliman Actuarial Retirement Calculator™ (MARC™)

The Milliman Actuarial Retirement Calculator (MARC) is a pension administration and communication tool for pension plan sponsors. The system offers data storage, benefit calculation, correspondence management, a participant website, and more.

In this video, Milliman’s Kevin Hicks explains some of MARC’s benefits. He also showcases MARC’s participant website.

To learn more about MARC, click here.

Central States ruling highlights the importance of communication

tenBroek_HeidiOn May 6, the U.S. Department of the Treasury denied the application of the Central States, Southeast and Southwest Areas (Central States) pension plan for benefit suspensions. According to Treasury, the plan’s proposal was fundamentally flawed in three ways. The first two reasons Treasury gave were that the proposed benefit suspensions were “not reasonably estimated to allow the plan to avoid insolvency” and were “not equitably distributed” (the plan did not explain to Treasury’s satisfaction the variations in the treatment of different classes of participants).

Poor communication is the third way the plan’s proposal failed to satisfy the requirements. According to Treasury, the plan’s notices to participants were “not written in a manner so as to be understood by the average plan participant.” Treasury explains:

• “The notices extensively use technical language without adequate explanation”
• “Critical terms used in the notices are not defined in the notices but only by cross-reference to other documents (e.g., the plan document and the rehabilitation plan document)”
• “The cross-referenced definitions in those other documents are not understandable to the average plan participant”

Few pension plans are getting the kind of attention that’s being paid to Central States. But many plans looking to the possibility of benefit suspensions in the future can take this opportunity to learn from Treasury’s issues with Central States’s application. Remember that good participant communications need to be included in your calculations.

For more perspective, read Tim Connor’s article “Central States Pension Plan and the Multiemployer Pension Reform Act.”