HR has a significant function in corporate mergers and acquisitions. The industry is vital to the success of these activities, as it takes on a strategic function. It should thus be included in the decisions that include them and their planning.
Mergers and acquisitions are undeniably challenging and complex processes in the business world. However, if the necessary steps are taken and taken with due care, they can boost company growth, open up new markets and increase operational efficiency.
Find out why HR is important in these processes and what its responsibilities and concerns are during their development.
What part does human resources play in mergers and acquisitions?
During the merger or acquisition process, the HR department performs numerous functions, ranging from the initial analysis of the operation to post-merger integration or the purchase of another company.
For example, the department must assess the human capital of the companies involved. This allows it to know which teams will be useful after the operation and what their responsibilities will be.
Likewise, it is up to him to identify risks and opportunities regarding the teams that work for other institutions, the policies used in these organizations and even the management strategies practiced.
HR must also ensure that processes are legally compliant, which involves both maintaining teams from other companies and dismissing employees who worked for them.
The sector is also responsible for facilitating the integration of different teams and organizational cultures. After all, this is essential so that the teams of acquired or merged companies are able to work together and under the same rules.
Given all this, HR participation in mergers and acquisitions is essential for the success of the transaction. It is also essential for effective management of natural changes to operations.
Advantages
HR involvement from the initial phases of merger or acquisition planning through to post-transaction integration brings a series of benefits to these processes.
Identifying synergies between teams
HR is able to identify synergies between the teams of companies involved in a merger or acquisition. To do so, it must analyze the skills, experiences and competencies of employees from both organizations.
From this, you can identify areas of complementarity and opportunities for collaboration. This facilitates more efficient integration, promotes knowledge sharing and maximizes employee potential.
Organizational culture alignment
HR facilitates the convergence of organizational culture in mergers and acquisitions. It must evaluate the standards, values and working practices of both companies in the operation. Therefore, it can determine areas of convergence and divergence.
This is interesting because it helps reduce conflicts, improve team cohesion and create a solid foundation that allows for long-term collaboration.
Minimizing talent loss
Talent loss is a concern that accompanies mergers and acquisitions. HR acts here to minimize this risk. This is done by developing retention , integration and engagement strategies .
Less traumatic transition
One of the main goals of HR during mergers and acquisitions is to ensure a smooth transition for everyone involved.
This includes providing emotional and practical support, clearly communicating integration plans, and offering resources and guidance throughout the process. This helps to keep the climate positive and stable.
How to prepare HR for acquisitions and mergers?
HR is a critical part when it comes to mergers and acquisitions. This means that the department needs to be equipped and qualified for the same.
He should have a good grasp of the processes and in addition acquire skills in communication, negotiation, change management and conflict management.
Additionally, you must be integrated into the leadership team responsible for the transaction from the beginning.
How to handle communication during the merger or acquisition process?
Effective communication plays a vital role in all stages of the merger or acquisition process. Well, not just in those stages, but in the day-to-day running of the company.
HR is responsible for developing clear and transparent communication strategies for all stakeholders involved. This includes its employees and employees of integrated or acquired companies.
It also concerns customers, suppliers and investors. This is important to ensure transparency in processes. It is also an opportunity to highlight the benefits of the merger or acquisition.
HR must promote the creation of open communication channels, regularly provide clarifications on operations and update those involved on their progress.
How to ensure talent retention during and after the transaction?
Talent loss is a natural concern in mergers and acquisitions. After all, professionals from the acquired or merged companies may not be interested in working with the new group. Or they may feel isolated.
Therefore, HR must work to avoid this scenario. The department must closely monitor metrics related to employee engagement and happiness. Likewise, it must devise strategies that can retain professionals.
These strategies are based on the company culture, employees’ needs, the potential of the company and the issues to be addressed. They may involve policies regarding goals, benefits, rewards, training, updating tools, etc.
In addition to implementing them, the sector must monitor them. This allows it to identify their effectiveness, as well as the need for suspension or adaptation to achieve better results.