How Can HR Truly Impact Mergers and Acquisitions Beyond Just Planning?

Hey all,

Very nice article on Role of HR in Mergers and Acquisition:

Got it on net, no idea who is the author.

Over the past seven years, the wave of mergers and acquisitions (M&A) has reached record levels in both the number of deals completed and the combined value of the merged companies.

Leveraging HR

Human Resources can add value to the M&A life cycle in the following ways:

# Pre-deal

- help to identify issues/planning due diligence

- plan due diligence for people/organization cultural fit

- help to educate the “deal” team

- help to develop acquisition guidelines

- Due diligence

- estimate people-related transaction costs

- estimate people-related ongoing costs

- identify/assess cultural differences

- estimate people-related savings

- recommend HR policies and programs

- validate intangible assets

- assess costs of integrating HR systems

# Integration planning

- develop strategies for employee communications

- design programs to retain key talent

- plan and lead the integration effort

- develop total rewards strategy for new entity

- help new organization cope with change

- define organization blueprint and staffing plan

- monitor employee attitudes and engagement

- manage selection and placement process

- manage de-selection/outplacement process

- outline people goals and guiding principles

- form people-integration teams

- help to manage labor relations

- advise on productivity/workforce synergies

- recommend assessment/selection method

# Implementation

- align HR policies, programs, and practices with business practices

- monitor progress of people-related synergies and ensuring workforce

momentum is sustained

- ensure incentive programs are designed to reward executives and key employees for achieving the goals of the merger

# HR should also encourage the new company's leaders to do the following:

- recognize and reward behaviors that support the new culture

- consider cultural behaviors that support the new culture

- align culture with the vision and business strategy of the combined organization

- identify the desired culture and gain agreement from senior management and opinion leaders of both organizations

# “Hope is not a strategy”

Identifying the role HR should play and the tasks in which HR should engage is a good start. However, successfully executing the role is something altogether different.

It is misguided to hand off these critical issues to your HR department and hope that it can execute successfully.

“Hope is not a strategy.” People must have specific skills, knowledge, abilities, and experience in order to succeed, among them:

- ability to evaluate another company

- ability to advise regarding employee sensitivities/attitudes

- M&A literacy and integration know-how

- ability to plan and lead complex integration projects

- knowledge of best people practices/systems

- knowledge of how to retain and motivate critical talent

- expertise with people/organization/culture integration

Its really worth reading.

Cheers

Archna

Hi,

Thank you very much for such detailed information. I would like to add some more to this.

1. Due diligence should be very clear.

2. Employee dissatisfaction should be avoided.

3. Conduct common understanding programs with the executive-level employees of the company you are going to take over.

4. Negotiate and help the Union Leaders understand the entire issue and their future positions after M&A.

5. Clear assessment of manpower should be done.

6. Understand the organizational structure/salary structure and try to reduce the disparity between the two companies.

7. Understand all the legal cases pending with the acquiring company and take full accreditation of the cases to determine the next steps.

8. Information should be sent to all the relevant bodies as per statute.

9. Proper audit regarding fixed and tangible assets should be done, and value should be determined accordingly.

10. Proper retrenchment policy should be implemented for excess staff.

These are the points on top of my mind.

Prabhakar Ch

Hyderabad

Email: prabhakarcherry@gmail.com

Hello All,

Please supplement me with how restructuring HR can be a good tool for Merger and Acquisition problems.

Regards,
Snigdha

Dear all,

We are in the process of acquisition with a multinational company. I have been asked to issue an appointment letter in the new company's name and obtain a resignation letter from the previous company.

It would be very helpful if I could get a sample letter on how to inform the employees about the acquisition. Since this is a very sensitive issue, I want the communication to be very clear.

Kind Regards,

Suchithra

Hi all,

I have attached a document which will shed more light on the role of HR in mergers and acquisitions. Hope this helps.

🌟

HR Issues in Mergers for Small Companies

Can someone tell me what the actual HR issues are for a small company that wants to merge with another small company, even though one of them owes some funds to the acquirer due to the merger? How can PF be transferred from the previous company to the current one? Should gratuity be paid to previous company employees who would move over to the new company before being added to the new company's payroll, or will it be considered continuous service? What are the legal issues regarding the merger of brands?

Please suggest.

Thanks,

Alok Urs

Appointment and Transfer Letters in Acquisitions

Do we need to give a separate appointment letter to the employees of the acquired company in case of an acquisition? Also, should a transfer letter be given from the original company? Please let me know your thoughts on this.

Regards

Hi, my company recently merged with another company, and that company wants to release offer letters to us. I am the HR person, so please, can anyone help me with how to issue offer letters?