Companies tend to go through these processes for various reasons. Every company has its own specific way of reaching their goals. It could be because a company wants to increase market share, increase capabilities or even achieve diversification of products and services. However, mergers and acquisitions are a big change within companies. It is a complex event and one that needs to be dealt with closely. Every asset of the company is involved as it could mean a change in the system. That being said, people often do not like change. It is a process whereby the responsibilities of the HR in a company should be involved as early as possible. Sally Dixon, director of HR services at PwC says that there has been a “tendency to involve HR very late” and that it “doesnot have the same influence then”. HR involvement contributesto the aspect of people issues. These “people issues”can be defined under such rubrics as pension costs or benefits.
Company Culture
The HR’s role is vital when it comes to the company’s culture and what it stands for. The HR in companies plays a role in the process of “change”. They offer their contribution to help secure a successful merge and acquisition. The HR contributes in determining the cultures of the two companies that will eventually become one through a merger or acquisition. HR must have a strong grip on the cultures of the companies for them to understand how they can link into one. Cultural differences are a problem and may hinder a successful merger and acquisition. These differences may include how the two organizations measure and define “success”, employee benefits, and even how problems are dealt with within an organization. The HR’s role in securing this will then make the two companies align more lightly.
Role Changes and Structure
When companies merge or acquire one another, there is bound to be several changes to both parties. These changes might be getting rid of certain positions or combining teams and departments and making it into one. The whole process of changing the two organizations so that they can become compatible can take a long period of time. HR plays a key role in doing so, as they communicate to employees about the certain issues and events that will take place. They ensure that everyone understands the situation and what is needed for a compatible atmosphere.
Concerns Within the Company
Change has many different possibilities. During a merger or acquisition, changesare bound to occur. This often creates a state of uncertainty, which may lead to distress for employees. HR in the companies work on making a smooth transition for the employees by helping to calm them and offering necessary information, as well as dealing with questions asked by the affected parties. Part of their role is to keep a lookout for any rumours or layoffs that may inflict further distress towards the employees. The HR also takes note of the different reactions and opinions of employees, and gives feedback to management regarding the concerns addressed.
Overall, the HR of companies plays an important role in the process of merger and acquisition, as they help ensure a smoother process. HR departments factor in the concerns of employees of the companies and address them,in a time where distress amongst the company is almost certain. HR also ensuresthe M&A does not have any damaging effects towards the company.
Brodie Bavidge