When two companies merge, the headlines often focus on the numbers of market share, assets, and strategic positioning. But behind every merger is a human story, one of uncertainty, adaptation, and resilience. For employees, a merger is more than a business transaction, it is a shift that can redefine careers, reshape workplace culture, and create new opportunities for growth.
In Kenya, one of the most significant mergers in recent history was the formation of the Kenya Development Corporation (KDC), which brought together the Industrial and Commercial Development Corporation (ICDC), Industrial Development Bank (IDB) Capital, and Tourism Finance Corporation (TFC). The journey to this merger started in 2013 when a task force was appointed to review state corporations with the aim of improving efficiency and aligning them with national development goals. Eight years later, in 2021, KDC was born a move that consolidated expertise, expanded financial services, and positioned the organization as a leading development finance institution. But what did this mean for employees?
For nearly a decade, employees lived with the question of what the merger would mean for their jobs, roles, and futures. Prolonged uncertainty often leads to anxiety, lower morale, and talent loss, as employees seek stability elsewhere. Organizations undergoing mergers must be mindful of this and work to shorten transition timelines where possible, ensuring that employees have clarity sooner rather than later.
Communication is the lifeline of any merger. Employees want to understand why the change is happening, how it will affect them, and what the future holds. Transparency from leadership fosters trust and reduces resistance. Mergers should not be shrouded in secrecy; instead, open dialogue should be encouraged so that employees feel informed and involved. Regular updates, town hall meetings, and an open-door policy can make a significant difference in how employees perceive the transition.
One of the biggest challenges in a merger is the integration of different corporate cultures. The institutions that formed KDC each had their own way of doing things, different structures, policies, and workplace norms. Without deliberate efforts to unify the new team, cultural clashes can create silos, with employees clinging to their former organizations. Conducting culture surveys, identifying strengths from each legacy institution, and crafting a shared identity help foster a sense of belonging in the new entity. Leadership must take an active role in shaping this culture, ensuring that the best aspects of each organization are retained while building a new, cohesive environment.
Training and skills development should not come to a halt during a merger. Organizations must continue investing in their people, ensuring they are equipped for new roles and responsibilities that may emerge. Change management training is particularly valuable, as it helps employees navigate transitions with confidence. Resistance to change is natural, but with the right support, employees can shift from uncertainty to embracing new opportunities. Investing in leadership development, mentorship programs, and cross-training initiatives can further support this transition, helping employees feel valued and prepared for the new corporate landscape.
Mergers also bring about structural changes, including adjustments to pay scales, grading systems, and reporting lines. In some cases, employees from different institutions performing similar roles may find themselves earning different salaries due to legacy structures. Addressing such disparities transparently and fairly is key to maintaining morale and preventing dissatisfaction from taking root. A clear and objective evaluation of job roles, combined with a standardized compensation structure, can help mitigate concerns and ensure equity within the new organization.
Some employees may choose not to be part of the merged organization, and that should be respected. Offering attractive exit packages allows those who wish to leave to do so on good terms, while also providing leadership the opportunity to bring in fresh talent that aligns with the new vision. For those who stay, career development opportunities should be clearly outlined, giving them a reason to be excited about their future within the company. Internal promotions, lateral moves, and training programs can help employees see the benefits of the merger and their place within it.
One of the most effective ways to ease the transition is through team-building initiatives. Bringing employees from different institutions together for workshops, networking events, and professional development activities helps forge relationships and break down barriers. For KDC, joint participation in industry events prior to the merger helped create informal bonds that later eased the formal integration process. Encouraging collaboration and teamwork fosters a sense of unity and ensures that employees see themselves as part of a collective effort rather than isolated groups from different organizations.
Three and a half years after the merger, KDC has demonstrated the benefits of a well-executed consolidation. The institution is financially stronger, has expanded its lending capacity, and successfully implemented its first strategic plan. A more robust business model has been developed, setting the stage for sustained growth. Employees have adapted to the new structure, and many have found fresh opportunities for advancement and professional development. The success of KDC serves as a testament to the power of strategic integration and a people-focused approach to change.
For HR practitioners and employees alike, mergers represent both a challenge and an opportunity. When handled with transparency, fairness, and a commitment to people, they can lead to stronger, more resilient organizations. The key is not just in the numbers, but in the people, who bring those numbers to life. By prioritizing communication, cultural integration, training, and leadership, organizations can turn a potentially disruptive experience into a catalyst for growth and innovation. The human side of mergers is what ultimately determines their success.
By Carol Misoi, Deputy Director, HR & Admin Kenya Development Corporation.