Challenges Facing HR in Merger & Acquisitions

By hrlineup | 30.01.2022

The Human Resource Department plays a major role in advising employees and the organization it represents on various matters. One of them pertains to Merger & Acquisitions. If a business is considering entering into a Merger & Acquisitions deal, most of its operations will definitely be affected and so are its employees and the employees coming in from the other business. To minimize the risks and issues that could come from such a deal, the HR offers hands-on advice and recommendations that a business and its employees can utilize to make the transition easy and successful.  However, the HR faces several challenges in doing this. Some of the challenges include:

The HR in Merger & Acquisitions may find it hard to identify and communicate M&A to the employees

People are generally skeptical about change and dislocations and this is one of the problems that employees face when the company they are working for decides to enter into an M&A deal. It is the duty of the HR to help them understand the change and its importance to the business so that they can be receptive to it and make it a success in the end. To do this, the HR needs to take time to make the employees understand why the transition is necessary and the benefits the business will reap from it. Employees also want to know how the transition will benefit them and how they could address the stress that comes with such a huge change. This may not be easy for the HR.

Forming an M&A team, choosing and coaching its leader

Another human resources role in mergers and acquisitions is in forming a team specifically for M&A that will handle anything related to the deal and ensure that everyone is doing their part to ensure its success. There should be a leader, who will focus on M&A only and not be involved in the running of the business. Choosing a team and a leader that will be sensitive to cultural diversity and lead others throughout the process can be a challenge to the HR. It may also be a hard task for HR to retain and motivate the key employees.

Deciding who stays and who goes

The third human resources role in mergers and acquisitions is in choosing employees who will stay in the company and whose services will no longer be needed. This is necessary in designing a new organization structure for the new business after the merger or acquisition. The HR needs to identify, retrain and work hard to keep the key talent. Integrating employees after acquisition will also be a challenge for the HR since he has to make sure that all of them are working for a common goal.

Integration of companies after acquisition is never an easy thing for the business involved, the HR and the employees. However, the HR does everything to make sure that the transition is smooth, stress free and a success despite the challenges they face.