A natural anxiety evolves when an organization goes through personnel and cultural changes as a result of a merger or acquisition. These changes have a direct impact on employees and their families, and if not managed appropriately, can be disruptive to the organization. Senior level HR advisors can play a critical role in the management of information between the acquisition team and the impacted employees mitigating the uncertainty that arises prior to and during integration.
In many instances, companies do not have senior level HR advisors as part of the leadership team to structure the HR initiatives critical to a successful transaction. If these initiatives are not set up thoughtfully, they can lead to negative impacts, both tactically and strategically, both before and after the close of the transaction. The employee impact of a transaction can be far reaching, affecting business goals and objectives, with costly consequences.
The experience, skills and knowledge of the employee base can be one of the most valuable assets acquired during a merger or acquisition. When parties to a transaction view HR in the merger and acquisition process as a strategic partner instead of as a cost center, they can more fully utilize HR expertise to communicate and align the many moving people parts of any transition plan. Effective early and consistent messaging during a transaction helps ward off employee anxiety about the transition and mitigate unplanned turnover.
Important roles HR plays in a Merger and Acquisition:
- Trusted Advisor. Early in the process, it is important to have HR participation when considering the impact of the transition on personnel. HR serves as a trusted advisor to executives and the deal team. HR should be at the table from the start to raise issues, help with HR planning, and provide actionable and timely input before and after the close.
- Communication Facilitator. Honest, forthright, timely and accurate communication to employees is key. This may include visual aids, town hall meetings, and FAQ’s which help employees understand how, what, when and where things are headed, and the progress made toward established plans.
- Change Manager. Change can be unsettling and disruptive to employees. An engaged HR team can provide accurate timely information during any big organizational change, helping manage rumors, retain critical staff, and maintain a sense of stability within the organization.
- Productivity Manager. Mergers and acquisitions can result in increased employee anxiety. It is difficult keeping employees focused and productive when they are distracted by what might happen to them. HR can be a calming force and keep employee behavior at a manageable level to avoid political activity such as jockeying for positions during the transition.
Employees will have a lot of questions when they first learn of a transaction, and in the following weeks. A word of caution – if you cannot provide accurate information to answer employee questions, don’t say anything at all. Tell employees you are working to get those answers and provide what information you can as quickly as you can.
Let your employees know what may or may not change, or might impact them such as payroll, benefits, vacation accruals, pension, scholarship programs for children, work schedules, locations, etc. Make sure they understand that there are a lot of moving parts to the process. Communicating how much progress is being made on the transition and what milestones have been met, will not only help ease anxiety, but will also develop a culture of trust and transparency.
If your company is about to engage in a merger and acquisition process, having an experienced HR advisor on the team can facilitate a smooth and successful transition. If you don’t have that resource on your team, let us provide you a consultation to help assess your needs during an acquisition or merger.