How HR Helps Influence Success of Mergers and Acquisitions
Studies show that the earlier HR gets involved in the merger and acquisition process, the greater likelihood of success. There are four stages to the merger and acquisition process:
- due diligence;
- integration planning; and
- implementation.
HR's involvement tends to be the heaviest in the last two phases. However, research shows that HR was substantially involved in the due diligence stage in 72 percent of successful deals and only 39 percent of those that failed. This suggests that HR's involvement is often too little and too late.
Early involvement. HR can improve its involvement in the early stages of a merger or acquisition by:
- Identifying issues and planning due diligence;
- Conducting due diligence regarding people, organizations and cultural fit;
- Educating the merger and acquisition team about people issues; and
- Developing acquisition guidelines.
Keep employees' trust and lead them through the change. Managing change requires HR to focus simultaneously on managing the business and providing effective leadership to people. Although doing so represents a tough balancing act, an effective HR department can lead employees to trust in the organization and through trust comes agility and resilience-not to mention results. An effective HR team will lead employees through a big change, including a merger or acquisition, by:
- It is especially important during times of change and transition to avoid offering employees canned answers and impersonal communication. Instead, employees should be provided with real answers and real feelings. HR should not be afraid to hide the feelings of stress that come with a big corporate change.
- Being empathetic and honest. HR should always acknowledge the human dynamic, the emotions that are sure to result from a merger or acquisition, and should be honest about the emotions that do arise and be willing to hear those of the employees.
- Give employees time to digest the change. Everyone needs time to digest significant change, no matter who they are or where they are situated in the organizational hierarchy. It's a mistake to make longstanding judgements about an employee based on his or her initial response to a change. Despite a difficult start, once an employee has navigated the emotions associated with change, he or she may turn out to be an organization's greatest asset.
- Give yourself time to digest the change. Not only is it important to give employees time to adjust to change, it is important that HR take the time to adjust as well. When HR exhibits reservations, a sense of loss, fear or some other emotion tied to change and their role in it, the ability to lead with authenticity and to help others cope and adapt is compromised.
- Keep your door open. Employees need to know that HR is there for them and that they are available to talk and give honest answers. Although HR need not know everything, it is important to let employees know that you understand where they are coming from because with empathy comes trust. If employees trust their HR department, they are more likely to follow it.
Open-door policy. HR should also maintain an open-door policy during a change so that employees have a place to vent. Employees will want to talk about their concerns, fears and thoughts about the transition. There is going to be considerable conversation about something that is big in employees' work lives, so they will need an opportunity to do so.
Develop a stress program. One way to relieve employee anxiety is for organizations to provide stress management programs. Stress is a natural emotion that people experience when having to adapt to a new situation. A stress program can help employees look at the workplace differently and adapt to the transitions.
Reprinted with permission. © CCH
<p>The earlier HR gets involved in the merger and acquisition process, research studies show a greater likelihood of success.</p>
/legal_compliance/how_hr_helps_influence_success_of_mergers_and_acquisitions.aspx