HR's Role is Vital to M&A Success

Whether mergers and acquisitions take place with corporate conglomerates, small businesses, local government, or school districts, the initial reasons for combining entities don’t typically take into account the impact on the people involved. Yet, employee retention is a major concern in these situations.

According to Mercer’s 2013 Global M&A Ready Survey of 372 HR executives around the world, a majority (84% in Asia, 62% in Latin America, 60% in North America, and 47% in Europe) felt that people issues in M&A were more prominent than a year or more ago.

HR’s Broad Reach Impacts Many Areas Affected During M&A

In successful M&A, HR professionals participate in the process from the start to avoid having to fix problems later on. Areas HR’s participation is critical include:

  • Evaluating target companies before deals are signed
  • Developing the M&A strategy
  • Screening talent and culture
  • Assessing and selecting employees
  • Managing communication channels both up and down the organization
  • Incorporating employee feedback into integration activities
  • Monitoring performance to insure business is not negatively impacted by the merger

Ongoing training of both staff and managers is also an important part of successfully integrating people. Acquired employees will need to learn new procedures and processes. Managers must understand change management and how to deal with resistance, while taking into consideration the sensitivities of the staff.

Mergers and acquisitions are stressful on employees. Uncertainty around job security creates stress, fear and competition that can result in unnecessary costs due to reduced productivity and loss of talent. Having HR involved at the start, and all the way through, the M&A process can help ensure a smooth transition and have a profound and lasting impact on employee retention.