One in five HR functions would not be ready to provide support if their business became involved in a merger or acquisition, according to research.
A survey by Mercer Human Resource Consulting of more than 200 HR professionals found the biggest challenge posed by a merger or acquisition is communicating effectively with employees - cited by 39% of respondents.
Managing the people issues, such as retaining key employees and identifying suitable roles, was deemed to be the most challenging aspect by 35% of respondents, while the rest (26%) said it was harmonising employees' pay and benefits.
All the signs show that merger and acquisition activity is on the increase, so HR needs to step up to the plate, said Peter Wallum, European partner at Mercer.
"Uncertainty surrounding deals can make employees anxious, so regular communication is paramount. If insufficient information is provided, employees will draw their own conclusions and companies risk losing key staff," he said.
The survey found that 24% of organisations involve HR at the strategy and deal planning stage of a merger or acquisition. Forty per cent of companies engage HR at the due diligence phase while 36% wait until deal implementation when the two organisations integrate.
The HR function should be involved as early as possible, Wallum added.