Mergers & acquisitions are ways for companies to grow, acquire talent, and technologies or obtain synergies.
Whatever the reason your organization might have, chances are, as an HR professional, you’ll encounter at least a few acquisitions throughout your career. HR can add a lot of value during the acquisition process and certainly should be involved.
Here are the top 5 mistakes to avoid that are within HR’s control. Doing so adds value by creating a much better experience for all parties involved: the acquired company, the acquiring business unit, and, for HR itself.
No. 1: Not being involved early enough
Human Resources can — and should — play an early and important role in acquisitions. There are many key decisions that can influence the rest of the acquisition’s success, which HR can guide and influence.
To be able to create an overall integration plan, HR needs to understand the incoming employee population: where they are, what they do, current compensation and benefits, and how all of these items fit into the current and future organization. Additionally, HR needs to help identify key employees and develop an appropriate retention strategy to ensure they will remain engaged and part of the new organization.
Not having HR’s involvement in this planning and analysis risks creating problems and rework down the road.
No. 2: Not understanding employees’ needs and concerns
Imagine for a minute that you are in these employees’ shoes: your work-world has been turned upside down, and there is a lot of uncertainty.
Acquired employees need to be regularly communicated to in an open and honest way, and they need to be treated with respect, whether they are being retained or not. They should understand timelines, next steps, benefits and compensation – all the things that can and will have a huge impact on them and their families.
A thoughtful and well-planned process can have an enormous influence on the incoming employees’ motivation, morale and respect for their new employer.
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No. 3: Not involving and empowering the incoming leadership team
If you are retaining the acquired company’s leadership team, you will want them to be motivated and excited about joining your organization. To do so, you need to involve them in your integration process immediately and ensure they understand items such as your culture, your critical HR processes and how to level, pay and review people.
If they aren’t involved in these decisions from the get-go, engagement and trust issues will become inevitable.
No. 4: Not working with the receiving business unit
You need to understand both the receiving business and the acquired company well in order to create a successful integration plan.
For example, working with the receiving business unit ensures there is a connection between the leadership teams. HR has a unique opportunity and responsibility to get to know the acquired company well. HR should ensure there are no internal equity issues being created or any precedents being set that the business will later have to live with.
No. 5: Underestimating the time, work that acquisitions & integration require
Acquisition work is a full-time job. To be effective and successful, you need fully dedicated resources that can really understand all the dynamics and complexities of the deal, execute in extremely tight timeframes, be able to respond to sudden changes and unexpected situations, and solve problems effectively and quickly. Having built-out processes, templates and proven integration and communication plans is invaluable.
Awareness and taking action on these common mistakes will make your acquisition integration much more successful and show the rest of your business just how much of an impact HR can really have.