The big H (hr) in mergers & acquisitions

HR’s strategic role in mergers & acquisitions

An old saying compares the process of mergers and acquisitions to trying to complete a large puzzle when your right hand and your left hand have never worked together. To put it mildly, mergers and acquisitions revolve around a multitude of moving parts.

Further complicating matters is the fact that there are suddenly two companies and additional stakeholders that now need to fairly and seamlessly work and communicate together in order to bring the deal to completion.

Ask any HR professional about topics of interest to them in the 21st Century, and regardless of their industry, you are going to hear that each is dealing with, or has dealt with, mergers and acquisitions, M&As. If you have been fortunate enough not to be impacted, you surely know someone who has. HR’s role throughout the M&A process has many critical touchpoints with our clients: from the organization’s executives, to each employee in your client group, to stakeholders in Legal and Finance, to vendors that provide severance and transition benefits, just to name a few. It can be a very scary and unsettling time …..

What is the definition of M&A? Simply put, it is when two organizations legally and officially merge together to become a larger powerhouse. Mergers happen for a multitude of different reasons, and it is critical in the employee communication process for HR professionals to ensure clarity and honesty about why the organization is going through an M&A.

This prepares the workforce for the massive changes that may lie ahead. Acquisitions can be scarier and even more confusing and unsettling because one organization is absorbing the other. If you’re the acquiree, it is incredibly challenging to keep your workforce (and your own) distractions and fears at bay.

  1. Human Resources won’t just have a seat at the deal table – they will have a voice;
  2. The employee experience and engagement, already altered by the pandemic, will be additionally transformed by M&A and leveraged more proactively to retain talent;
  3. As sales portfolios expand and contract, sales training will dramatically evolve and customer data management will influence the value of the deal;
  4. The need for enhanced data management and cybersecurity protocols will slow deal integration efforts;
  5. The ongoing war to attract and retain talent is forcing a more strategic approach to onboarding and commitment to workforce learning and development during deal due diligence.
  6. There is a need for a strong communication/planning approach and you have to avoid a lot of questions that stay unanswered for months.

The general trend in the labor market today is toward a smaller core of highly strategic personnel and an ecosystem of more temporary workers and companies. The wave of mergers and acquisitions is a land grab with cheap money that will have its equal and opposite pull toward streamlining. How will companies find the middle ground between hiring/integrating and downsizing? That’s the key question.”

I don’t make predictions, but I predict that each of these trends will impact HR in 2022 – one way or another. We’ll wait and see.