With price cuts already underway, customers and investors are speculating wildly on how the Amazon acquisition of Whole Foods will impact the grocery business and online retailing. The two companies’ business models reside on opposite ends of the spectrum, as do their corporate cultures. Known for its laser focus on efficiency, one Amazon careers page leads with the headline, “If you love to build, to invent, to pioneer on a high performance team that's passionate about operational excellence—you’ll love it here.”
Whole Foods, whose CEO John Mackey wrote the book “Conscious Capitalism,” has softer values at its core. The Whole Foods careers page reads, “Whole Foods Market attracts people who are passionate—about great food, about the communities they live in, about how we treat our planet and our fellow humans—and who want to bring their passion into the workplace and make a difference.”
How will these two companies co-exist under the same corporate umbrella, and how will employees manage the change? Both companies are asking for passion from their employees, but a passion for invention and operational excellence is different from a passion for food, community, and environmental and social values. Will slashed prices at Whole Foods impact employee wages, benefits, and working conditions?
First, a quick look at history: In 2009, Amazon acquired Zappos. Zappos CEO Tony Hsieh, author of the book Delivering Happiness, insisted that Zappos maintain its culture as long as it met financial targets. As a subsidiary of Amazon, Zappos has since revamped its culture into a holacracy, creating controversy and attrition—and all the while maintaining its original core values along with a 4.1 Culture & Values rating on Glassdoor. The Zappos Family careers page headline reads, “LIVE TO DELIVER WOW.”
Like many holding companies, Amazon is willing to let its subsidiaries maintain their culture. Even so, there’s no doubt many Whole Foods employees are wondering what’s going to happen to the the things they love most about their company as it gets absorbed by the efficiency-focused online retailing giant. Not only that, uncertainty around the transition could make hiring more difficult. Here’s a closer look at the issues that can arise during a transition:
Impact on Employees
The impact of a change and uncertainty in the workplace can result in the following for employees:
- Fear of one’s own job loss
- Fear and resentment about colleagues’ job loss
- Decreased engagement and/or performance due to fear and disagreement with company actions
- Dissatisfaction with leadership, blaming them for bad/selfish decisions
- Divisiveness among employees who favor the transition and those who don’t
- Exodus of vested employees receiving large payouts
- Management attrition due to redundancy or conflicts with new team
- Increased negative reviews on Glassdoor, resulting in lower overall satisfaction ratings and leadership ratings.
Impact on Hiring
Mergers, acquisitions or rebrands can also affect the perceptions of potential candidates, impacting the new company’s ability to hire. Candidate concerns may include:
- Confusion about the name and/or visual identity of the company
- Loss or deterioration of previous employer brand equity
- Confusion about the culture of the new company versus the old
- Uncertainty about which company information is current enough to be trusted, including benefit/salary information
- Recruiters and/or hiring managers not equipped to clearly define new roles and combined culture to candidates
- Decreased interest in applying upon viewing a string of negative reviews on Glassdoor when looking at reviews by date.
The Importance of Leadership
To ward off the negative impacts of a merger or company acquisition, it’s important that leadership engages in setting the tone for the transition. Tony Hsieh tried to be as transparent as possible through the Zappos transition.
In the coming months, Whole Foods employees will look to store managers, department heads and CEO John Mackey for inspiration, motivation, and guidance on how to cope with the transition. If leaders and managers exhibit a combination of enthusiasm, practicality and honesty about the difficult parts of change, employees will feel supported and stay engaged.
- The two factors most strongly correlated to CEO approval on Glassdoor are employee satisfaction and satisfaction with senior leadership.
Monitoring Engagement and Feedback
Companies that manage a transition well monitor employer brand metrics to assess the impact of the change and troubleshoot as issues they are identified. By regularly monitoring and sharing key employer brand metrics with company leaders, companies will be able to ease the transition as they celebrate wins and identify opportunities,. Quantifiable elements of the impact of a merger, acquisition or rebrand on the employer brand include:
- Employee turnover
- Hiring costs
- Engagement survey results
- Satisfaction ratings on Glassdoor
- Traffic to careers site
- Traffic to Glassdoor page
In addition to quantifiable measures, it’s also important to give employees an internal outlet for voicing concerns. By proactively listening and responding appropriately, employers can reduce the fallout that might otherwise end up on Glassdoor...or in exit interviews.
If Amazon and Whole Foods engage in this transition by considering its impact to employees and candidates, getting leaders engaged, and putting metrics in place, they’ll be well on their way to reinventing the grocery business, while keeping true to the Whole Foods mission of doing good for communities and the environment.
Our eBook, How to Manage Your Employer Brand Through a Corporate Transition goes into greater detail about how companies can manage a transition like the one Whole Foods is facing. In the eBook, we share examples of how VMware handled its employer brand (in conjunction with TMP Worldwide) through becoming part of the Dell Technologies family. We also share well strategies for creating a communications plan that reinforces company values and keeps employees engaged. If your company is facing a similar transition, download it today!
