"I don't think I've ever heard of any colleague of mine who's gone through a combination who said it's easier than they thought. Most people say it's more difficult than they thought." ~ Mike Sprouse, chief marketing officer for Epic Media Group
One of the greatest challenges—and learning experiences—for an HR professional is managing a merger and acquisition (M&A). The before, during and after phases of an M&A are filled with risk for the organization, and with confusion and anxiety for employees, so it’s imperative that HR understands how to handle the various challenges that will occur with each phase.
Companies face a lengthy list of risks during an M&A. The SHRM Online article Managing Pay Challenges in an M&A or IPO Deal states that “according to the March 2016 People Risks in M&A Transactions report from Mercer, people risks remain top of mind for both parties in an M&A deal, including such pain points as employee retention, compensation and benefit levels and overall talent management.” Data security is also an issue as disparate security and IT systems between companies represent a growing concern for merging organizations.
Another important M&A consideration is how to provide emotional support to workers during the process. Employees of an acquired company can experience shock, anger, disbelief and depression. While senior leaders typically have expertise in the legal and financial aspects of a deal, they are usually not as skilled in understanding or managing the psychological trauma an M&A can cause to employees.
And what about the culture clash? The Inc. article How to Merge Corporate Cultures states that the merger of two distinct corporate cultures “is like the first day of high school or a new marriage, because you have no choice but to navigate the unfamiliar situation.” A failure to merge cultures can cause morale to plummet, and can spill over to relations with clients and vendors—and ultimately affect the bottom line.
So what can HR professionals do to ensure the highest level of success for every phase of a merger or acquisition?