HR professionals should take a pivotal role in merger and acquisition talks as company advisers have a poor understanding of people management issues.
The findings come in a CIPD report jointly commissioned with consultancies Bacon & Woodrow and PricewaterhouseCoopers.
One in three of those surveyed considered advisers to the bidders had a limited understanding of HR issues, or none at all. For advisers to the target firm, this figure rose to nearly one in two.
Report co-author Judy Brown said HR needs to be involved in negotiations from an early stage.
“Chief executives and senior management must consider the need to consult with people managers along with lawyers and accountants when establishing merger deals.
“The key message must be that people managers should make their case more forcefully and people managers and board members should in turn consult more.”
Carol Bode was HR development manager at the AA when it was bought by Centrica in September 1999. She said merging companies need to undertake a risk assessment of people as well as financial issues.
“The problem is that it has to come from the top. It’s no good always saying HR should be more proactive and make their voice heard. Sometimes the reality is that you have to have an enlightened chief executive to get HR in there in the first place. The importance of HR always tends to be acknowledged eventually, but often it is in hindsight.”
Figures show merger activity in the UK by overseas companies rose from £9.5bn in 1996 to £31.5bn in 1998.
Frances Wilson, international manager of the Institute said personnel practitioners are being asked to give strategic input where they are credible. They need to demonstrate they are proactive, vocal, with high visibility: the kind of people the chief executive can talk to.”
The report, People Implications of Mergers and Acquisitions, Joint Ventures and Divestments, is based on 80 responses to a questionnaire sent to members of the institute’s international and compensation benefits forums.
Contact: Diane Sutton, e-mail: d.sutton@cipd.co.uk Tel: 020-8263 3271 www.cipd.co.uk
By Kathy Watson
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