Trends: mergers and acquisitions

Boots and Alliance Unichem’s partnership is the latest high-profile merger to hit the headlines. With 76,000 employees involved, the HR team will have its work cut out aligning cultures and dealing with the numerous people issues arising from the move. The thought of dealing with a merger or acquisition (M&A) may strike fear into the hearts of many HR managers – especially as they are often first in the firing line. However, evidence is building that M&As can be positive experiences for HR professionals, and may even help them further their careers.

Research from the Work Foundation, Cracking the Performance Code – How Firms Succeed, suggests that employee engagement is critical to the success of a post-merger organisation. Nick Russell, associate director at the Work Foundation, says HR professionals who lead on people issues can raise their profile considerably.

“Joining a new organisation can give HR the opportunity to gain leadership,” he says. “If the joining company has some catching up to do in areas such as performance management and reward, HR is in a great position to lead initiatives. If you can spot the potential, it can really help your career.”

Whatever the situation, Russell says there are opportunities for HR to shine. “If a well-run company takes over a floundering one, HR has the chance to re-evaluate values and get a new focus,” he says. “If the HR team is joining the flourishing organisation, it can provide the impetus to shape up a dysfunctional culture. If an equivalent company is acquired, there may be a clash of cultures, which can mean low morale and disillusion. However, HR can also show how it can turn this around.”

Alan Garmonsway, HR director at biotechnology company Xenova Group, has been through two acquisitions – Cantab Pharmaceuticals in 2001, and KS Biomedix in 2003. During both moves, he positioned HR so that it was central to the whole process. This included leading on internal and external communications before the acquisition, and aligning cultures after the event.

“The acquisitions I’ve been through haven’t felt like extra work, but they have been rewarding as I’ve been at the centre of the organisation dealing with issues critical to its success going forward,” Garmonsway says. “It has also given me experience of how different functions work, and helped build relations with functional heads.

“Both have been valuable learning experiences and have raised HR’s profile within the organisation.”

Practical tips 

  • Push for HR to be involved from the earliest point so you are fully involved in the merger or acquisition process.

  • Information about plans will be kept under wraps before announcements are made, so talk to senior managers to stay in the loop.

  • HR is best placed to look across the whole organisation. If you spot a potential problem, make sure you speak out and get noticed.

  • Internal communications are a good indicator of organisational culture. Set up a small project team to make sure you are getting the message right.

  • Economies of scale can mean more buying power post-merger. Use extra resources to implement new HR initiatives.

  • If you are invited to senior-level meetings, take the opportunity to build relations with functional heads and get your ideas listened to.

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