Acquisitions – reducing the pain
According to a business recent confidence survey, mergers and acquisitions are on the rise again. However, according to research, more than 80% of mergers and acquisitions are unsuccessful at producing any benefits or maximising shareholder value.
The process of acquiring needs precise reading of issues concerning stakeholders and the employees who form the organisation are an important stakeholder to consider. Acquiring a company does not necessarily mean that you automatically own the people, their loyalty and work effort.
Companies need to consider these people issues, retention strategies for those people they wish to keep, lay offs for those people they don't and forming a new structure to reflect the new dynamic of the organisation. There needs be a fit between the strategic agenda and HR management.
Communication becomes vital in this process. Regardless of the communication style, it needs to be honest and genuine. This helps employees “find their feet” in the new organisation and feel able to make decisions of their own.
The handling of human resources will become the foundation for a successful merger and acquisition. How well equipped are you to manage these issues? fe 3 consulting has composed top ten tips for this transitional process.
- Set up a small integration team and create a project plan to integrate the two companies.
- Define a communication strategy and communicate effectively with the staff of both companies. Focus group discussion can be a useful way to encourage two-way communication. Consider as many mediums as you can - emails, direct mail to their home addresses, town hall meetings, posters and banners in the work place.
- Move quickly to set up the management structure of the post-merger organisation. Where there is more than one candidate for a position, ensure the criteria for selection are very clearly understood and fairly applied – otherwise you store up resentment for the future.
- Identify key people whom you want to stay or leave. Pay appropriate severance packages to people you want to leave. Identify star performers and retain them, they posses the tacit knowledge and know–how of the organisation and customers or clients. Methods of retaining employees may include career progression, salary increases, golden handcuffs etc.
- Deal quickly with issues such as pay roll management – everyone needs to continue to pay the mortgage!
- Train staff on dealing with personal change, organisational culture and uncertainty. Induction to the new organisation can also help people settle down more quickly and easily.
- Make the positive case for change. Address the advantages and benefits for the employees in both the organisations in order to deal with the inevitable feelings of resentment and loss.
- Get senior managers to meet with staff to get their views on the key issues. Not only will this given employees an opportunity to be heard, it will gather valuable information which will help with planning and executing the integration strategy.
- Create clear job descriptions, responsibilities. Link people with technology so information can be more easily shared.
- Create ‘exchange visits' programme.
Planning a quality integration implementation will help the company to smooth the transition process. Balance the issues, so that everyone knows whether they are part of the future organisation or not.
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