Lorem ipsum dolor sit amet, consectetur adipiscing elit. Vivamus convallis sem tellus, vitae egestas felis vestibule ut.

Error message details.

Reuse Permissions

Request permission to republish or redistribute SHRM content and materials.

Mergers & Acquisitions: An HR Guide for Success

Has your HR team been involved with any mergers or acquisitions (M&As)? If not, improving economic conditions and recent studies suggest that more M&As may be on the horizon.

According to Thomson Reuters Merger & Acquisitions Review published in June 2014, “second quarter 2014 M&A totaled $1.1 trillion—a 60 percent increase from the first quarter of 2014 and the first quarter to top $1 trillion since the second quarter of 2007.”

What’s more, results from a KPMG survey released in early 2014 revealed that, 63 percent of respondents planned to be acquirers in 2014. When dollars, stock price and company strategies are removed, mergers and acquisitions are all about the people. So human resource departments must take a leadership role in planning and executing them.

Following the tips below will lead to a more successful transition—no matter which side of the table you sit on.

Be a part of the strategy from start to finish. As soon as a company’s due diligence is completed and an action is possible, HR’s senior management (senior vice presidents, vice presidents or chief human resource officers) must insist they be brought into the conversation. HR is typically contacted by a legal representative or a person in charge of mergers and acquisitions. The earlier the involvement, the better to allow ample time for HR to assemble an acquisition team. Planning can’t begin too early. If HR is brought in too late, errors such as processing incorrect data or missing benefits enrollment deadlines can happen.

Bring stakeholders into the conversation. The unavailability of stakeholders can slow the process. HR leaders need to reach out quickly to their own internal stakeholders such as those professionals working in the benefits, payroll, HR information systems (HRIS) and compensation functions. The leaders from these areas will begin assessing correct job titles, leveling salaries appropriately, aligning benefit plans and eligibility dates, and analyzing employees’ data. Their expertise is critical to a smooth transition, but many calendars are booked these days. It’s advantageous to start scheduling HR project-update calls with the team early and regularly.

Work with clean, accurate data. Heard the phrase garbage in/garbage out? It’s imperative that the data shared between companies is accurate, up to date, and includes any special information. This is where little details must be made known, such as visa status or visa transfers (e.g., student or work visa issues). Are there any ex-pats, special contracts, local tax requirements or bonus agreements that need to be honored? Plan on using a secure data room to update, share and view documents. It’s much cleaner and more confidential than just sending files back and forth.

Document the process as you go. Whether or not this is your first merger or acquisition, it’s good to have a documented process or project plan for all to follow. No matter what format you use (e.g., a simple Excel spreadsheet), a project plan should clearly list the tasks, due dates, accountabilities and a tracking mechanism. For example, one task may be to have HR business partners provide HRIS with final, clean data by a certain date. After this is completed, other systems like payroll and benefits will be able to complete their tasks of employee enrollment and timely employee payments. Adapt any previous project plan you have to your merger and acquisition or, if starting from scratch, consider purchasing project manager forms from a source like the Project Management Institute.

Review lessons learned, and update any process or project plan documents created. There is always room for improvement and an opportunity to do things differently. Once the project is over, the HR team should meet to discuss lessons learned. This is the time to make changes to the project plan document that was created, and save it as a template for next time. The team might also want to reconsider whose responsibility it is for certain tasks, enabling everyone to create more bandwidth for these types of projects. HR also might want to survey the affected employees to gauge how satisfied they were with the process and onboarding. A key to success is to not reinvent the process every time another merger or acquisition occurs. Try to update the standard process after each event.

Always consider the employees first. Remember that throughout the process, affected employees will want to know, “What’s in it for me?” Everyone within all levels of the organization will ask the same questions regarding their pay, service time, benefits, location, job title, etc. What would you want to know if you were affected? Guide communications, onboarding and other transitional processes with those questions and answers in mind.

Steve Ostrom, PHR, formerly of Houghton Mifflin Harcourt, is a senior HR representative with Rockwell Automation and has been involved in multiple acquisitions during his HR career. A member of both the GOSHRM and ClevelandSHRM chapters, he can be reached via Twitter @sostrom.