A successful M&A transaction can be game-changing, while a poorly executed one can lead to failure and even burns businesses to the ground. When the stakes are this high, it’s better not to leave anything to chance – especially when it comes to the driving force behind your company’s growth: your workforce.
Efficient human capital management is crucial during this phase, and even during the due-diligence process, as it can directly affect whether the M&A transaction succeeds or not.
Making sure the parties involved are compliant with labor standards & local laws.
Identifying structural issues, cultural differences, conflicts in policies & procedures, and clashes in reporting relationships.
They can provide valuable information about the company’s talent and culture—along with typical assessments of employee benefits plans & compensation programs, employment contracts, policies and procedures, and more. They can also give great insight into the value of your workforce and can decrease the possibility of unhappy surprises once the deal is done.
But more often than not, post-merger integration (PMI) is misperceived as a simple task that can be achieved during day-to-day operations, and the importance of involving HR from the start is neglected. This is a common misconception and a recipe for failure. PMI is a process that requires rigorous planning from the beginning of an M&A process. And since every situation is unique, the integration plan must be tailored according to the company’s needs.
The rate of M&A failures is high and is often caused by different HR-related factors such as incompatible cultures and management styles, loss of key employees, lack of communication & motivation, and confusion regarding the company’s future goals.
Identifying the reasons behind the M&A and effectively communicating them to the employees who often see change as upsetting.
Anticipating cultural challenges from the get-go and assessing both company cultures to integrate them successfully.
Retaining top talent and deciding who stays and who goes in case of downsizing.
Human Resources professionals work on identifying these potential HR issues between the two companies, integrating both cultures seamlessly, and managing talent decisions. They can add significant value to the PMI process by executing well-thought-out integration strategies.
M&A deals are known to require great efforts in melting both cultures by taking the best from each company and setting a clear direction your teams will follow.
To facilitate the M&A integration process, our HR professionals offer a comprehensive array of HR services that specifically target any people issues your company may have before, during, and after the M&A process.
