Mergers and Acquisitions - HR Issues
HR issues are typically the most overlooked of the critical aspects which will determine the eventual success or failure of a merger or acquisition. Ideally, they would be considered at an early stage: are the cultures of the combining businesses sufficiently compatible ? How good are the people in the business with which we plan to merge ?
Once a deal is agreed, every aspect of Human Resources comes into play, further complicated by the need to integrate two workforces and two sets of policies and procedures.
Practical questions are manifold. Most of them can begin to be addressed before the actual merger date – potentially with the assistance of a third party, like Mentaction, who will hold data from both businesses, sharing only what is agreed for release and keeping the rest confidential.
- For each aspect of business do the merging entities organise themselves in the same way or quite differently ? For example, a marketing function could be organised by product line or by customer segmentation.
- How, therefore, should the merged business be organised ?
- Are the grading and pay levels similar ?
- If the pay is quite dissimilar, is harmonisation appropriate and what is the best way to approach it ?
- How do we ensure continuity of the nuts and bolts of administration such as payroll and insurances ?
The list can go on and on.
We work with merging businesses in the UK and throughout Europe: formulating the questions; developing the answers; planning for the effective date of the transaction; and running the practical integration.