5 Ways HR Can Ensure a Seamless M&A Transition

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Whether it’s an emerging startup’s acquisition by a well-known industry player or an international corporation’s massive merger years in the making, successful mergers and acquisitions (M&A) require a significant amount of time, energy, and resources from stakeholders across the organization.

During times of busy M&A activity, senior executives often focus on tangible assets like increased financials, improved products, and expanded client portfolios. As a result, focus can unintentionally soften on the company’s most valuable asset: its people.

Dedicating the same care and consideration to human capital as financial capital is critical to a smooth and successful transition, and who better to lead the charge on people strategy than HR? Thanks to its deep knowledge of the workforce and corporate culture and its experience in everything from processes to payroll, HR has the (often overlooked) power to help facilitate a seamless M&A transition.

Here’s how HR pros can leverage that power for the organization’s benefit:

1. Grab an Early Seat at the Table

HR should ideally be involved in the planning and due diligence process of any M&A deal. If HR is left out of early conversations, organizational leaders may make decisions without having all the necessary information and people-based insights. That, of course, leads to less than optimal outcomes.

HR leaders know the company, the skill sets of employees, and the behind-the-scenes processes that make the company run. When HR is involved in an M&A from the start, decision-makers have access to this vital information and can better guide M&A process development.

2. Communication Preparedness Is Key

A merger or acquisition indicates growth and should be a positive experience for a company. However, when communication between leadership and employees isn’t honest and transparent, uncertainty and confusion follow.

The best way to ensure a successful transition is to communicate truthfully, early, and often. Leadership at all levels of the company must be readily available to listen to and address the concerns of their teams. Being prepared with responses to employee concerns can prevent issues from snowballing. HR can be the catalyst for effective communication by equipping leadership with accurate and appropriate answers to likely or outstanding employee questions.

3. Provide a Central Source of Truth and Facilitate Employee Questions

Being available in person is important, but HR should also offer digital resources that are accessible around the clock to help facilitate a smooth transition. A robust employee engagement portal can educate all staff by serving as a source of truthful M&A-related information.

The portal should serve as a hub for company information, potentially including a letter from the CEO, an M&A timeline, FAQs, and any supplementary documents. It should be routinely updated with relevant information, and perhaps most importantly, it should offer employees the ability to ask questions anonymously. A Q&A section where employees can confidentially ask questions they might not be comfortable asking in person clearly demonstrates that the company values and appreciates what its employees have to say.

4. Implement a Change Management Strategy

The purpose of any change management strategy is to determine how the new entity will transform both as an organization and in terms of its people. HR often serves as creator, owner, and executor of the strategy, with some larger organizations even having dedicated change agents on staff to drive direction for new initiatives.

Execution of a change management strategy involves guiding leaders through the change process, identifying and collaborating with stakeholders, developing messaging, driving ongoing updates, and implementing mechanisms to help the change stick. Throughout the strategy’s deployment, communication with employees is critical, especially around elements that will affect their titles, roles, and responsibilities.

Additionally, communication should include changes employees can expect in regard to departments, systems, processes, workflows, and overall company culture. A change management strategy’s success can be determined by measuring adoption rates of change and gathering employee feedback through surveys.

5. Keep Up With the Day-to-Day

While the flurry of M&A activity can take up a lot of time and energy, it’s vital that HR pros keep up with the daily tasks they are responsible for, such as educating employees on the chosen human capital management system, communicating about the entity’s new or updated benefit offerings, and ensuring that everyone is paid come payday. Furthermore, developing standardized policies and a new employee handbook — key parts of HR’s routine duties — can put employees’ minds at ease during this transitional period.

Full integration between two companies can be challenging. It requires not only uniting people, processes, and policies, but also creating a positive, sustainable company culture that drives further success.

The HR department is uniquely positioned to help in these endeavors. When HR is included from the very first M&A discussions, the department can adequately prepare and provide value during all stages of an M&A transaction, leading to a stronger, smarter company with happier employees.

Michael Hoehne is chief people officer of AHEAD.

By Michael Hoehne