How often is HR involved when a company plans to acquire another organization?
How often is HR asked to provide insights when a company is about to be sold?
More often than not, the answer is seldom, or even more to the point, too late.
Based on my experience of both scenarios, I think HR should play a more vital role in these types of transactions, because as a department it is uniquely able to provide value-adding services that no other department can.
Three Unique Services HR Can Provide When A Company Is Being Sold
Labor law: HR knows the company’s staff. It has access to employee data such as age and tenure and can relate these to legal requirements such as notice periods and severance payments. It also knows about the legal requirements and timelines for any major reduction in force (RIF), so just by providing those to the executives, HR allows for a much higher level of transparency on costs and timelines.
Cultural insight: HR knows about the overall culture of the company and also how different departments might differ culturally. Some of these cultures may foster change; others abhor it. By providing those insights, HR can help find the right approach for any integration and transition.
Trust: HR is and should be the go-to place for any employee — and this includes managers — who wants to know what is going on, what might happen to their job or the best deal they can get. HR should be the trusted mediator, providing all sides with counsel and guidance, but also full transparency, not sugar-coating anything for anyone.
Three Unique Services HR Can Provide When A Company Is Acquiring Another
Assessment of legal liabilities: Revenue, number of customers and technical abilities are important topics in any due diligence, as is the number of employees in any given department and role. HR has a trained eye to assess beyond sheer numbers. Average age, tenure, established work councils — all these details make any form of restructuring more time consuming and definitely more expensive. Providing a clear assessment on any form of restructuring will help make any due diligence more realistic.
Cultural assessment: HR is able to apply tools of assessment to any given organization. Knowing how much the acquired company’s culture and its values match or differ from your own will provide a good indication of how difficult it will be to merge those cultures and where those fault lines are.
Coaching and mentoring of management: HR is the only department within an organization that can provide coaching and mentoring that is based on training, skill and — maybe most importantly — the experience of working together with management. This enables HR to provide very specific coaching and mentoring, tailor-made to the individual manager, their character, their needs and maybe even their anxieties. HR can also provide coaching for the new management to help them to better understand their new reports, and provide them with a cultural map that includes all the pitfalls, swamps and rocky cliffs.
I strongly believe that HR can provide massive support to any successful merger or acquisition and these three unique selling points of each scenario are only exemplary among many others.
For HR to provide these services to managers, employees and companies alike, there are some requirements.
HR should already be a valued business partner at the beginning of an acquisition. The department must build even greater trust with management and employees throughout the merger process. HR professionals are people too, and some of them might be the first to be let go when a company is being bought. Leaders should make sure this information is known by HR, so they can make a professional decision about how to help with the merger process.
Originally published on Forbes Human Resource Council – Link