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
Acknowledge(1)
Amend(0)
115Very 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
Acknowledge(1)Amend(0)
Hi,
Thank you very much for such detailed information. I would like to add some more to this.
1. Due diligence should be very clear.
2. Employee dissatisfaction should be avoided.
3. Conduct common understanding programs with the executive-level employees of the company you are going to take over.
4. Negotiate and help the Union Leaders understand the entire issue and their future positions after M&A.
5. Clear assessment of manpower should be done.
6. Understand the organizational structure/salary structure and try to reduce the disparity between the two companies.
7. Understand all the legal cases pending with the acquiring company and take full accreditation of the cases to determine the next steps.
8. Information should be sent to all the relevant bodies as per statute.
9. Proper audit regarding fixed and tangible assets should be done, and value should be determined accordingly.
10. Proper retrenchment policy should be implemented for excess staff.
These are the points on top of my mind.
Prabhakar Ch
Hyderabad
Email: prabhakarcherry@gmail.com
From India, Hyderabad
Acknowledge(0)Amend(0)
Thank you very much for such detailed information. I would like to add some more to this.
1. Due diligence should be very clear.
2. Employee dissatisfaction should be avoided.
3. Conduct common understanding programs with the executive-level employees of the company you are going to take over.
4. Negotiate and help the Union Leaders understand the entire issue and their future positions after M&A.
5. Clear assessment of manpower should be done.
6. Understand the organizational structure/salary structure and try to reduce the disparity between the two companies.
7. Understand all the legal cases pending with the acquiring company and take full accreditation of the cases to determine the next steps.
8. Information should be sent to all the relevant bodies as per statute.
9. Proper audit regarding fixed and tangible assets should be done, and value should be determined accordingly.
10. Proper retrenchment policy should be implemented for excess staff.
These are the points on top of my mind.
Prabhakar Ch
Hyderabad
Email: prabhakarcherry@gmail.com
From India, Hyderabad
Acknowledge(0)Amend(0)
Hello All, Pklease suppliment me with how restructuring HR can be good tool for Merger and Acquisition problems. Regards, Snigdha
From India, Calcutta
Acknowledge(0)Amend(0)
From India, Calcutta
Acknowledge(0)Amend(0)
Dear all,
We are in the process of acquisition with a multinational company. I have been asked to issue an appointment letter in the new company's name and obtain a resignation letter from the previous company.
It would be very helpful if I could get a sample letter on how to inform the employees about the acquisition. Since this is a very sensitive issue, I want the communication to be very clear.
Kind Regards,
Suchithra
From India, Madras
Acknowledge(0)Amend(0)
We are in the process of acquisition with a multinational company. I have been asked to issue an appointment letter in the new company's name and obtain a resignation letter from the previous company.
It would be very helpful if I could get a sample letter on how to inform the employees about the acquisition. Since this is a very sensitive issue, I want the communication to be very clear.
Kind Regards,
Suchithra
From India, Madras
Acknowledge(0)Amend(0)
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
Acknowledge(0)Amend(0)
From India, Madras
Acknowledge(0)Amend(0)
Hi seniors,
Can someone tell me what the actual HR issues are for a small company that wants to merge with another small company, even though one of them owes some funds to the acquirer due to the merger? How can PF be transferred from the previous company to the current one? Should gratuity be paid to previous company employees who would move over to the new company before being added to the new company's payroll, or will it be considered continuous service? What are the legal issues regarding the merger of brands?
Please suggest.
Thanks,
Alok Urs
From India, Kochi
Acknowledge(0)Amend(0)
Can someone tell me what the actual HR issues are for a small company that wants to merge with another small company, even though one of them owes some funds to the acquirer due to the merger? How can PF be transferred from the previous company to the current one? Should gratuity be paid to previous company employees who would move over to the new company before being added to the new company's payroll, or will it be considered continuous service? What are the legal issues regarding the merger of brands?
Please suggest.
Thanks,
Alok Urs
From India, Kochi
Acknowledge(0)Amend(0)
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
Acknowledge(0)Amend(0)
From India, Bangalore
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
Social Compliance check list & legal,HR,Ethica l checking file.doc
HR-LEGAL FORMS.zip