Hey all,
Very nice article on Role of HR in Mergers and Acquisition:
Got it on net, no idea who is the author.
Over the past seven years, the wave of mergers and acquisitions (M&A) has reached record levels in both the number of deals completed and the combined value of the merged companies.
Leveraging HR
Human Resources can add value to the M&A life cycle in the following ways:
# Pre-deal
- help to identify issues/planning due diligence
- plan due diligence for people/organization cultural fit
- help to educate the “deal” team
- help to develop acquisition guidelines
- Due diligence
- estimate people-related transaction costs
- estimate people-related ongoing costs
- identify/assess cultural differences
- estimate people-related savings
- recommend HR policies and programs
- validate intangible assets
- assess costs of integrating HR systems
# Integration planning
- develop strategies for employee communications
- design programs to retain key talent
- plan and lead the integration effort
- develop total rewards strategy for new entity
- help new organization cope with change
- define organization blueprint and staffing plan
- monitor employee attitudes and engagement
- manage selection and placement process
- manage de-selection/outplacement process
- outline people goals and guiding principles
- form people-integration teams
- help to manage labor relations
- advise on productivity/workforce synergies
- recommend assessment/selection method
# Implementation
- align HR policies, programs, and practices with business practices
- monitor progress of people-related synergies and ensuring workforce
momentum is sustained
- ensure incentive programs are designed to reward executives and key employees for achieving the goals of the merger
# HR should also encourage the new company’s leaders to do the following:
- recognize and reward behaviors that support the new culture
- consider cultural behaviors that support the new culture
- align culture with the vision and business strategy of the combined organization
- identify the desired culture and gain agreement from senior management and opinion leaders of both organizations
# “Hope is not a strategy”
Identifying the role HR should play and the tasks in which HR should engage is a good start. However, successfully executing the role is something altogether different.
It is misguided to hand off these critical issues to your HR department and hope that it can execute successfully.
“Hope is not a strategy.” People must have specific skills, knowledge, abilities, and experience in order to succeed, among them:
- ability to evaluate another company
- ability to advise regarding employee sensitivities/attitudes
- M&A literacy and integration know-how
- ability to plan and lead complex integration projects
- knowledge of best people practices/systems
- knowledge of how to retain and motivate critical talent
- expertise with people/organization/culture integration
Its really worth reading.
Cheers
Archna
From India, Delhi
113Very nice article on Role of HR in Mergers and Acquisition:
Got it on net, no idea who is the author.
Over the past seven years, the wave of mergers and acquisitions (M&A) has reached record levels in both the number of deals completed and the combined value of the merged companies.
Leveraging HR
Human Resources can add value to the M&A life cycle in the following ways:
# Pre-deal
- help to identify issues/planning due diligence
- plan due diligence for people/organization cultural fit
- help to educate the “deal” team
- help to develop acquisition guidelines
- Due diligence
- estimate people-related transaction costs
- estimate people-related ongoing costs
- identify/assess cultural differences
- estimate people-related savings
- recommend HR policies and programs
- validate intangible assets
- assess costs of integrating HR systems
# Integration planning
- develop strategies for employee communications
- design programs to retain key talent
- plan and lead the integration effort
- develop total rewards strategy for new entity
- help new organization cope with change
- define organization blueprint and staffing plan
- monitor employee attitudes and engagement
- manage selection and placement process
- manage de-selection/outplacement process
- outline people goals and guiding principles
- form people-integration teams
- help to manage labor relations
- advise on productivity/workforce synergies
- recommend assessment/selection method
# Implementation
- align HR policies, programs, and practices with business practices
- monitor progress of people-related synergies and ensuring workforce
momentum is sustained
- ensure incentive programs are designed to reward executives and key employees for achieving the goals of the merger
# HR should also encourage the new company’s leaders to do the following:
- recognize and reward behaviors that support the new culture
- consider cultural behaviors that support the new culture
- align culture with the vision and business strategy of the combined organization
- identify the desired culture and gain agreement from senior management and opinion leaders of both organizations
# “Hope is not a strategy”
Identifying the role HR should play and the tasks in which HR should engage is a good start. However, successfully executing the role is something altogether different.
It is misguided to hand off these critical issues to your HR department and hope that it can execute successfully.
“Hope is not a strategy.” People must have specific skills, knowledge, abilities, and experience in order to succeed, among them:
- ability to evaluate another company
- ability to advise regarding employee sensitivities/attitudes
- M&A literacy and integration know-how
- ability to plan and lead complex integration projects
- knowledge of best people practices/systems
- knowledge of how to retain and motivate critical talent
- expertise with people/organization/culture integration
Its really worth reading.
Cheers
Archna
From India, Delhi
Hi,
Thank you very much for such a detailed information. I would like to add some more to this.
1. Due deligence should be very clear
2. Employee dis-satisfaction to be avoided
3. Conduct common understanding programmes with the executive level employees of the company which you are going to takeover.
4. Negotiate and make the Union Leaders understand about the entire issue and their future positions after M&A.
5. Clear assessment of Manpower to be done
6. Understand the Org. Structure/Salary Structure and try to reduce the parity between the two companies.
7. Understand all the legal cases pending with the acquiring company and take full accreditition of the cases to take next steps
8. Information to sent to all the bodies as per statute.
9. Proper Audit with re to Fixed and Tangible asset to be done and accordingly value to be determined.
10. Proper retrenchment policy to be implemented for excess staff
These are the points on top of my mind.
Prabhakar Ch
Hyderabad
From India, Hyderabad
Thank you very much for such a detailed information. I would like to add some more to this.
1. Due deligence should be very clear
2. Employee dis-satisfaction to be avoided
3. Conduct common understanding programmes with the executive level employees of the company which you are going to takeover.
4. Negotiate and make the Union Leaders understand about the entire issue and their future positions after M&A.
5. Clear assessment of Manpower to be done
6. Understand the Org. Structure/Salary Structure and try to reduce the parity between the two companies.
7. Understand all the legal cases pending with the acquiring company and take full accreditition of the cases to take next steps
8. Information to sent to all the bodies as per statute.
9. Proper Audit with re to Fixed and Tangible asset to be done and accordingly value to be determined.
10. Proper retrenchment policy to be implemented for excess staff
These are the points on top of my mind.
Prabhakar Ch
Hyderabad
From India, Hyderabad
Hello All, Pklease suppliment me with how restructuring HR can be good tool for Merger and Acquisition problems. Regards, Snigdha
From India, Calcutta
From India, Calcutta
Dear all,
We are in the process of acquisition with a Multi national Company.
I am asked to issue appointment letter in the new company name and get resignation letter from the previous company.
It would be very helpful if i can get specimen letter on informing the employees about the acquisition. As it is very sensitive issue, I wanted the communication very clear.
Kind Regards
Suchithra
From India, Madras
We are in the process of acquisition with a Multi national Company.
I am asked to issue appointment letter in the new company name and get resignation letter from the previous company.
It would be very helpful if i can get specimen letter on informing the employees about the acquisition. As it is very sensitive issue, I wanted the communication very clear.
Kind Regards
Suchithra
From India, Madras
Hi all, I have attached a document which to throw more light on the the role of HR in mergers and acquisitions...Hope this helps :icon1:
From India, Madras
From India, Madras
Hi muntazir,
I am dinesh. I am MBA student doing project on The role of HR in mergers and acquistions. Can anybody share your materials with me. My submission date is very close.
Please mail me if there ia any material regarding HR issues in Mergers. My mail id is
Regards,
Dinesh.N
From India, Bangalore
I am dinesh. I am MBA student doing project on The role of HR in mergers and acquistions. Can anybody share your materials with me. My submission date is very close.
Please mail me if there ia any material regarding HR issues in Mergers. My mail id is
Regards,
Dinesh.N
From India, Bangalore
Hi seniors,
Can some one tell me what are the actual HR issues for a small company which wants to merge with another small company, even though one of them owe some funds to the acquirer due to merger.
How to transfer PF from previous to current.
Should a gratuity be paid to previous company employees , who would actually move over to new company before taking them on rolls of new company or will it get considered as continuous service.
Legal issues of merger of brand
Please suggest
Thanks
Alok Urs
From India, Kochi
Can some one tell me what are the actual HR issues for a small company which wants to merge with another small company, even though one of them owe some funds to the acquirer due to merger.
How to transfer PF from previous to current.
Should a gratuity be paid to previous company employees , who would actually move over to new company before taking them on rolls of new company or will it get considered as continuous service.
Legal issues of merger of brand
Please suggest
Thanks
Alok Urs
From India, Kochi
Do we need to give a separate appointment letter to the employees of the acquired company in case of an acquisition, and also should a transfer letter be given from the original company?
From India, Bangalore
From India, Bangalore
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