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4 Best HR Practices That Won’t Put Your Acquisition Deals On Hold
The worth of corporate deals in India has doubled in 2018 to date compared to 2017, driven by big-ticket consolidation across various sectors
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Indian companies have been involved in M&A deals worth a record $97.6 billion this year. From overseas buyers with a giant retail firm to global corporations, multi-billion-dollar bets in India were the most talked about M&A deals of the year. Mergers and acquisitions look easy on paper and often they make good business sense. But when it comes to executing a successful merger, it’s the details that make or break the long-term success of these deals.
The integration of culture, employees, and more importantly the ideologies is truly an uphill task. When an organisation gets acquired or when they merge, the decision is usually based on market fit or betterment of products. The process of bringing two businesses together as one comes with several challenges, especially the employee differences and rise in the conflict in values. With their attention on settling the deal, organizations sometimes fail to realize the enormity of the impact on the number one company asset – its people.
Employees are the biggest assets of the organization. To make sure these assets are protected, it is imperative for leaders to consider HR as a strategic partner in the M&A process, and not treat the HR functions simply as an administrative. During an acquisition or merger, involve your HR leaders as strategic partners and include these 4 best practices in your workforce management plan:
1. Prepare your managers
Rarely do mergers or acquisitions come as surprises. Even when these types of business deals are planned meticulously, the news of an imminent change usually starts to circulate well in advance the official announcement. Since an environment of uncertainty and fear is not favourable to productivity and future growth, prepare your managers with the information they need and provide resiliency training to help them manage their own emotions and also manage the changing emotions of their team members.
Having the required tools and the information at hand to address the needs of the employees will help the organization remain stable before, during, and after the acquisition.
2. Develop a strategic communications plan
Consistent direct communication with the entire organization is one key to a successful acquisition or merger. In most cases, some redundancies in staff will occur and employee restructuring will be necessary to eliminate those redundancies. In anticipation of inevitable change, create an internal communications plan.
Adding to all company communications, managers and department heads should personally hold team meetings as well as have a quick chat with individual employees to keep everyone is informed as to what is happening. To ensure the right message reaches employees, arm your managers with FAQs and recommended responses. You can create a list of predictable questions that will be asked such as, “Is my job secure”. How managers respond to these critical questions before the employee restructuring will have a huge impact on the outcomes when they do occur.
3. Give Employees Plenty of Notice
It is advisable to give employees advance notice of the roles that will be eliminated. Before you create your impacted list, identify the skills sets you’ll require to move the company forward and basis the shortlisted skills set you can determine which roles are necessary, which are outmoded, which are redundant, and which are no longer required to reach company goals.
Once notification has been made, give those employees the tools to look internally or externally for new roles. Offering outplacement support before their last day at work will create an environment of trust within the organization for those who are being laid off as well as those who will continue. Companies that can successfully shift talent during an M&A are most likely to beat the high failure rate associated with acquisitions and mergers.
4. Severance and bonuses
In addition to the severance packages given to those leaving the organization, you must also consider the ways in which you can retain team members who are critical to your future success. Once recognized, you may want to offer retention bonuses to employees with the institutional knowledge and skills that will help towards future profitability.
Offering outplacement to every impacted employee, and not just senior management, is a best practice that all employers looking at long-term employer brand protection, limiting legal liability, and future business success should follow.
Taking heed of the company’s most important assets, its employees, will keep the optimism alive and position the organisation for future innovation, successful collaboration, and ultimately financial gain.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.