If you’re looking to hire a new lawyer or a new accountant, consider the impact on the firm’s culture as a result of the merger.
Many mergers of firms in the accounting industry are followed by layoffs, severance, and even bankruptcy. Many businesses in industries like construction, manufacturing, and financial services have been hurt by the merger of the firms that do the accounting work. So when a merger brings two or more firms together, the result is often a lot of extra work for both sides.
These types of mergers often lead to layoffs of individuals in the merged firm, and there are even claims that some of these mergers are the reason that some of the firms were unable to hire enough associates to replace the former employees. In fact, a survey by the Institute for Human Resources Management found that many mergers of accounting firms were followed by layoffs in the accounting industry.
I guess that makes sense in some ways. In others, it’s not so clear cut. Most accounting firms have a number of different departments, or specialties. Some of these departments are involved in accounting, some are involved in human resources, and some are involved in the finance department. If a firm wants to merge, there’s a good chance you will be involved in more than one department.
This is the case for the accounting industry.
Mergers often cause employee layoffs, especially in the private sector where employees tend to have less bargaining power. This is the case for the accounting industry, too. I think its pretty obvious that a merger will not be successful in the accounting industry if all the departments involved are involved.
Just like some of the other industries, merging a company is a merger of two businesses. And I don’t mean that as a bad thing. A merger can add value by creating many new jobs and expanding the company. But the trouble is that mergers tend to decrease the incentives of employees to stick around. So if there is a merger, you are likely to lose employees.
For example, in the pharmaceutical industry, a merger between the two companies would have left the former struggling to compete with the latter. But if a merger had happened between the two firms, that same merger would have meant that the former would have had to fire a large number of employees.
Mergers do have their place in an industry. But before you go and merge, I’ve got a quick question for you.
Of course, no merger in the pharmaceutical industry will ever have to happen. But there are always companies out there with the same product, same problems to solve, and same number of employees that could work together to solve them. It is important to be aware of the industries that you work in and the industries that you could work in. You might be surprised at what you can find out there.