What is HR’s Role in the Mergers & Acquisitions Process

No matter the size of your organization, the role of hr in mergers and acquisitions dictates the process’s success. Human resource plays a vital role in the process of two organizations integrating into one. Mixed feelings arise among employees that the hr managers need to handle with assurance.

Mergers in business terms mean two or more organizations are coming together to form one entity. Acquisitions are whereby a company obtains full control of another organization through purchase or other means. The success of mergers and acquisitions mostly fails due to hr’s management styles, poor communication, and motivation, lack of high talent, to name a few.

It is essential that the human resource identifies the organization’s problems, develop solutions, and advise the new management on implementing them. Below are the prominent mergers and acquisitions hr best practices you need to know.

• The new organization requires guidance to create new policies
• Retention of highly talented employees. This means you will have to dismiss other workers
• You cannot release workers without compensation. That said, a reasonable compensation strategy is essential
• A comprehensive program for employee benefits is essential. Consider creating one that fits the new organization
• Communicate with employees on the benefits of M&As. Let them know the vision and goals of the organization while answering any questions they might ask

Being on the frontline for human due diligence should be on every human resource manager’s mind. Investigate more information on the acquirer and help them make an informed decision during this transition process. Some of the information you need to consider includes benefits and compensation plans, were they working with trade unions, any litigation on employment, and financial capabilities.

The human resource department has its fair share of challenges when it comes to M&As. You must consider the proposals for parties involved in the process before choosing one that is more advantageous. Not everyone will agree with your choices. That is why you must keep communications open and be positive minded.

The following are some of the hr challenges in mergers and acquisitions.

1. While it is easy to communicate with employees about M&As, understanding the transition can be challenging. Most of them will blame you for their job loss if any, and this can be a difficult pill to swallow.
2. Selecting a team leader for the formed M&A team can be difficult. Make them understand that they have to focus on the M&A process and not management issues.
3. Integrating two or more cultures is not easy. This is because every organization has its rules for decision making and innovation. You must find a middle ground for these merging companies to co-exist.
4. Once you determine the new organization structure, deciding which employee to retain is essential and heartbreaking to those who have to leave.
5. The benefits and compensation plans differ in all organizations. You might find out that one organization was working with a trade union while another wasn’t. Hr managers need to come up with a new hr policy and practice.

Conclusion

The role of hr and acquisitions can bring about a massive success if hr professionals handle it with diligence. While the process can be upsetting to employees, making them understand the reason and importance of the M&A is essential for their wellbeing.

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