Mergers & Acquisition - Managing the HR Issues

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HRM, merger, Acquisition, business, markets, financial, legal, Organizational culture, national culture, Power Distance, Individualism Vs Collectivism

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On The Employee Front...

Organizations need to employ a little tact when it comes to handling human resources. There are two important steps to be taken by the management of both the companies. Identifying the key resources in both the organizations is the first step. Key resources does not necessarily mean the top people in the management cadres, but those, who have a following in the company as knowledgeable and trustworthy colleagues. They can manage a hold on at least some groups of employees in the organization. It is important to recognize them, take them into confidence and groom them as the change leaders. They should be given the responsibility of informally preparing the employees for the merger.

Communication plays a very critical role at the time of a merger. Communicating with the employees of both the companies is very important as they should not feel that they have been kept in the dark. It should be remembered that they are one of the most important assets of an organization and also major stakeholders. Communication channels should be open in all directions once the decision is taken on a merger / acquisition.

Employees should be informed of the decision and the reason behind taking the decision through a proper channel. The implications of the decision for the employees and the company should also be conveyed to them. Any queries or apprehensions of the employees should be taken seriously and properly responded to.

Retaining and motivating employees is another major challenge for the HR department of the organization. One important point to note here is that it is the most talented resources of the organization that leave it first. Therefore, prompt and timely action (and not reaction) is essential on part of the HR department. A wait and watch attitude can only spell doom as the employees wouldn't think on similar lines. They have their career at stake and they wouldn't want to take any risks on that front. The minute they get the information of their company going in for a merger or an acquisition, they start looking out for opportunities. Speed, alacrity and discretion on part of the HR department therefore become very critical.

From the horse's mouth...

This is what an employee of an acquired IT company had to say:
• Treat even the 'acquired employees' with dignity and respect. Give them a reason to believe that they are valued in the company.
• Keep your communication channels open in all directions. Let the employees know what's in store for them. Clear all employee apprehensions.
• If downsizing is part of the integration plan, convey the same to the employees, well in advance. Show your concern for the laid-off employees by providing employment assistance.
• Concentrate on retaining and motivating the key talent. Key resources would be the first people to leave organizations as they have the best opportunities outside.
• Respect the allegiance of the employees to their former employer. In this case, the acquiring company, which failed to follow these basics, lost nearly 70% of the workforce and struggled to win the confidence and trust of the rest.
All these initiatives should ensure a company involved in a merger or an acquisition, a successful integration, from the HR angle.