HR Factors to Consider When a Merger is at Stake

Mergers and acquisitions can generate very strong and very mixed feelings for everyone in a company. Excitement, anxiety, resistance, and enthusiasm are all valid, and could be felt to varying degrees by everyone at different stages. As the people-people of the company, it is the job of HR professionals to manage a smooth process from the start to the end goal of a single, cohesive, operational organization. Of course, such a goal is easy to declare. Getting there, however, is a different story.

There are many different things to consider when entering into a deal for a merger, and not all of them can be given equal consideration. The executives and deal teams of each company have their own priorities, and the people affected are, sadly, not always one of them. That’s where HR comes in. Here are four factors to think about for an imminent merger:

1. HR Should be Involved from the Start

Involving HR too late in the merger process can reduce the chance of a successful merger. Not only can procrastinating on personnel considerations make it more difficult to integrate the two companies together, but there are also financial matters and hidden liabilities that only human resources might spot. HR professionals can serve as advisors to executives from both companies, providing insights that may help the dealings happen more smoothly.

2. Differing Cultures can Cause Deal Failure

Various studies of mergers and acquisitions over the years put failure rates at anywhere from 70-90% – a staggering and worrying statistic. One thing contributing to this high rate of failure is culture clash. When a new organization is formed with two competing company cultures, the business goals around which the merger was formed tend to fall by the wayside completely. HR can help by identifying points of contention before the merger and working to resolve them before they become an issue.

3. Employee Concerns Should be Dealt With – Tactfully

For employees, mergers can be a scary time, and it’s up to HR to field concerns and control the flow of information about the deal. Navigating the line of discretion and being the point of contact for company employees is tricky, but over-sharing and making inaccurate promises are damaging to both the company and the deal.

4. Business As Usual Can’t be Neglected

The process of a merger is usually a period of high-stress activity for a company, and HR departments may be overloaded with a host of new responsibilities. Despite increased workload, it’s important that the usual, day-to-day HR responsibilities are remembered and completed with their usual timeliness and thoroughness. Part of a smooth transition is ensuring that normal operations are not interrupted, and HR needs to lead that charge.

With the volume of additional work that a merger brings, it could be a great financial and emotional decision to bring in outside HR expertise. Human resource management companies like HR Collaborative have a pool of prior experience with different mergers, and are great assets during times of transition. Check out our case study of a happy client and successful merger:

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