Four Tips for a Successful Merger or Acquisition
By Bob Adams and Joe Ruzicka | September 7, 2023
Mergers and acquisitions are an increasingly prevalent feature of business, with deal volume doubling in the past 20 years. If your company has merged or been acquired, or is the one performing the acquisition, the cohesion of the new team relies on leadership having ample preparation and communication both before and during the M&A process. A trusted human resources partner can help with the following actions.
Tip 1: Develop a plan around core priorities. This will almost always include establishing HR systems, merging benefit plans, communicating information to employees from both companies; examining and adjusting policies; examining pay scales and staff numbers; and having a contingency plan in place for possible redundancies.
Tip 2: Clarify the company’s leadership structure. People need to know not only who they’re answering to, including simple confirmation if it’s the same person, but also how the management chain looks as a whole. When it comes to the use of technology, the C-suite needs to ensure systems are not overwhelmed – or worse, down – in the first days or weeks of a merger or acquisition. Make sure due diligence is completed on the front end. Otherwise, it will appear to employees that the company is unprepared.
Tip 3: Confirm new processes. As one company, you will need a new handbook. Onboarding and training processes and materials will also need to be reconsidered. New hires who have done their research may have questions about the merger or acquisition, including what changed after the event. They may also carry certain expectations about the combined company with them based on what they knew about one of the separate companies.
Tip 4: Be realistic. Acknowledge that not everything will be the same and not every step will be seamless. In the case of mergers, the guiding question is typically, “Which culture will dominate?” This is important for managing expectations and assumed norms about vacation time and paid time off, and even items like dress code or scheduling. Compromises will be needed from both sides if the merging cultures and/or policies are different or not aligned. And don’t forget to take employee feedback into consideration. Utilizing anonymous surveys can help executives discover what was working with the existing culture and what could have been improved. Using that data can serve as a starting point for creating a merged culture of the things most meaningful to each organization.
Ultimately, you and your team are bringing together two separate workforces as one. For starters, this means reconciling separate systems, as mentioned above. Plus, previously separate leaders and two different cultures will need to mesh with one another. It’s essential to understand what employees expect. For acquisitions, anxiety will be the main emotion for the workforce of the company being absorbed. Will everyone keep their jobs, and if so, will those roles and expectations be the same?
You want clarity on your side. The question to answer is: “What should we communicate to employees – and how?”
An HR partner can manage the lion’s share of due diligence and empower leadership to reconsider all aspects of the newly formed organization’s needs. This will allow time for executives to digest, review, and manage any potential issues. This has the potential to dynamically shift overall satisfaction and sentiment from employees and leadership of a successful merger or acquisition.
