Culture clashes and insufficient preparation are common reasons for failed mergers and acquisitions. Businesses that have recognised that staff are crucial to the success of any deal are now turning to HR to smooth the path to full integration.
Preparation and managing the change process effectively are what matters most with any merger. A recent survey conducted by Mercer HR found that just over two thirds (67%) of the 51 pan-European companies surveyed were engaged throughout the process. During the due diligence phase a quarter said they enlisted HR’s advice, with only 10% of respondents involving HR after the deal had been completed.
Mercer’s Peter Wallum commented: “Traditionally, companies have involved HR in the integration stage of mergers and acquisitions when most employee issues occur. More employers now realise that staff are crucial to the success of a deal, and they need to plan ahead so people issues are resolved quickly.”
Over a third of respondents said that all stages of a merger offered challenges. With the most, 37% saying that the integration stage was the most demanding. Culture clashes often occur between merging businesses; making people management a key aspect of any successful integration programme.
Acquisitions both from foreign companies buying into the UK and British businesses buying companies overseas has increased considerably according to recent Office of National Statistics figures, making the HR function increasingly vital.
Wallum adds: “While it’s encouraging that more HR functions are getting involved earlier in the deal process, it’s important they fully understand the people issues and prepare the business accordingly.”