From
the newly published book Reaping the Benefits of Mergers and Acquisitions by
John Coffey, Valerie Garrow and Linda Holbeche.
Too
often mergers and acquisitions are brokered by legal and financial experts
without reference to the HR team. The latter then find themselves having to
find ways to deliver head count reduction, higher productivity through synergy
while ensuring that the company has the right skills to take the new
organization forward.
The
capacity to do this varies enormously from organization to organization. Some
companies have a highly skilled HR team, which is used to working at a
strategic level alongside the business. Others have little more than a small
personnel function dealing with contracts and pay.
One
thing is certain, that it is the people who will make the merger a success or
failure in the long term. The areas that HR will have to deal with, are
outlined below, will have an impact on the employment relationship and upon
subsequent employee commitment to the business.
Areas HR will have to deal with
|
Business mapping Baseline data Tracking |
Integration culture Vision, values |
Performance management |
Organisation development & design |
|
Industrial relations Consultation Trade unions |
|
Terms & conditions Tupe transfers Benefits Pensions |
|
|
Top team Succession planning Remuneration |
Assessment & selection Redundancy Relocation Retention |
||
|
Communication feedback |
Training and development Merger specific Future competencies |
HR systems Policies IT |
|
Establishing
credibility for HR
Mergers
can provide an opportunity for the HR team to claim a strategic place in the
organization. It is a time to demonstrate that the function can support
strategic goals and be instrumental in delivering a high performance
organization.
One
chief executive recognized the value of HR when he arrived in the acquired
organization for the first time to meet his new employees to present a
well-prepared five year business plan. He soon realized that staff were not
interested in detailed plans for the organization but in decisions that had an
impact on their jobs and security. The CEO rang Head Office and asked the HR
director to join him to deal specifically with the people issues raised.
HR
should be able to provide the bridge between the business needs and the
employees. While the senior team may have exhausted their energies in "doing
the deal", HR needs to plan the longer-term strategy for delivering the
deal. The Roffey Park research found that organizations that were strongly HR
led, anticipated and overcame many of the integration stumbling blocks that
beset other mergers. Some HR teams raised their standing within the
organization so that they became key players in subsequent merger discussions.
Soft
and hard issues during a merger
The
figure shows the complexity of a true HR role during a merger. HR may be viewed
by the business as dealing with "soft" issues, but the "hard"
issues risk taking over completely as beleaguered staff turn round a plethora
of contracts, rewards systems, benefits and pension schemes. As we show in
Chapter 4, employment legislation and the involvement of the trade unions
require a meticulous approach to these issues. Industrial tribunals are time
consuming and leave a sour taste for those involved as well as those remaining
and are detrimental t o corporate public image. Nevertheless, even the best
transfers can result in a tribunal and it is therefore essential that
documentation regarding contracts, consultation and correspondence is kept
updated and accessible.
Many
HR professionals told the Roffey Park research team that over 75 per cent of HR
time is spent on fewer than 5 per cent of the employees. These can include
staff in outposts on irregular contracts. One example was the case of an
African who, while not directly employed by the company, had always been
considered to be invaluable as a "man Friday" and had received
unofficial compensation for his local knowledge and help.
As
with other aspects of merger management, excellent project management skills
are a great asset for the HR team. Dividing the work up in terms of
accountability and delivery against a strict timetable is a valuable exercise,
particularly where joint project groups from both organizations can demonstrate
integration principles in their own roles.
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While
the "hard" HR issues risk taking over in terms of time and energy, HR
professionals should maintain the "body" but also keep an eye on the "soul"
of the organization. This is a demanding and often emotionally draining process
while HR personnel themselves may not be certain of their own future.
This
extract is taken from the newly published book Reaping the Benefits of
Mergers and Acquisitions by John Coffey, Valerie Garrow and Linda Holbeche.
To find out more about the book and to order direct from the publisher please
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