Less than 10 per cent of management time is spent on HR issues during merger
and acquisition (M&A) due diligence, a new survey reveals.
The European Mergers & Acquisitions Survey of European multinationals
from global HR consultancy Hewitt Associates found 40 per cent of respondents
do not have a defined HR due diligence process, and 77 per cent do not train
those who participate in due diligence activity.
Despite this, respondents identified core HR issues, including cultural fit,
as the most critical and difficult areas to resolve during integration.
The survey found the key HR integration challenges centre on cultural fit,
decision-making, alignment of compensation and benefits, and organisational
structure.
Asked to look ahead to their priorities for the next M&A, two-thirds of
respondents said that cultural fit merits more attention in due diligence and
integration efforts.
Philip van Elsdingen, a corporate restructuring and change consultant with
Hewitt Associates, said: "The survey demonstrates the critical role HR can
play in a merger or acquisition.
"HR can ensure that a company pays the right price for the target by
identifying HR liabilities and quantifying long-term integration risks and
related costs."
Jean-Luc Santerre, senior vice-president of corporate social development at
Schneider Electric and one of the survey participants, said: "It is
crucial that companies address the issues of cultural fit, organisation design
and change management early on in the merger and acquisition cycle – ideally at
due diligence – so that we can help make, not break, the deal."
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