The role of HR in mergers and acquisitions

mergers and acquisitions

Mergers and acquisitions both offer opportunities for increased company value. The former involves two companies joining together as a new entity, while the latter occurs when one company acquires authority over another through a cash purchase, stock swap, or another similar method.

The two instances involve a number of processes, and human resource professionals play a major role in bringing the people of both business entities together.

Some of the major reasons why mergers and acquisitions fail are because of employee-related outcomes, including different pay scales, lack of culture fit, differences in management styles, loss of important talent, and lack of communication.

The role of HR 

HR is responsible for establishing communication between the stakeholders and the necessary resources. HR professionals need to have discussions with management about changes to payroll and policies, as well as clearly explain these updates to employees. It is HR's responsibility to help employees ease into the new management styles and acclimate them to the company culture.

Speed up the implementation process with technology

Before you start implementing changes to facilitate the merger or acquisition, analyze the organization's recruitment tools. Your tech stack is key for navigating the talent pool and making decisions about bringing in new people and retaining good talent.

With the help of technology, you can get an overview of the workforce needs, review paperwork to assess employee knowledge and skills, and rework the compensation program for each role.

Let a new culture emerge

If two equal entities join forces through a merger, it would be unfair to let one company's identity shine over the other's. In order to make sure everyone feels included, it is crucial to create a brand new identity. This includes crafting a new vision and mission statement, establishing a refreshed employee value proposition, and building a new employer brand. Make sure this culture is clear and accessible for both new and existing employees.

Retaining key talent

A merger or acquisition often causes unavoidable redundancies in a workforce. It is important to look at the big picture and retain talent that is not just vital to a role or department, but to the organization as a whole.

Identify star performers by gathering performance reviews from multiple leaders, and combine that data with employee interviews, surveys, and analysis. You can also choose to re-recruit candidates into the new entity through testing techniques and interviews.

The news of a merger or acquisition can also stir up uncertainty amongst employees about their jobs, so it is important to manage their expectations. Be proactive about avoiding discrimination issues, show employees the career path that they need to take, and ensure that the decision-making is quick so that they don't jump ship.

Easing the transition   

People are a company's most important asset, and their trust is crucial for a successful merger or acquisition. The human resources team plays the most important role of communicating challenges with their employees, gathering feedback and taking it to the upper management, and ensuring a smooth transition throughout the merger or acquisition process.


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