A survey of over 200 North American companies found that almost 80% of mergers and acquisitions completed in the last few years have met their key objectives, according to a company press release. HR functions have had a major part in this, the company said, and when HR executives are included in the process, the better the outcome.
Traditionally, HR executives have had a fairly limited role at the M&A planning stage, but this is changing. While two-thirds of participants in the survey reported being involved in M&A due diligence, while in the future this number is expected to jump to three-quarters or more. Thirty-six percent expect to be involved even earlier, at the pre-deal stage, in the next few years.
HR professionals were almost unanimous in what they considered to be the most pressing issues of the first three to six months of a merger, acquisition or restructuring. Eighty-seven percent thought ensuring effective leadership from the top team was a top priority, while 85% said choosing a top team should be a priority. Communicating effectively with employees (75%), retaining key talent (65%), and aligning the differing corporate cultures (47%) were also noted as priorities.
However, only 26% of the survey group rate themselves as fully prepared to meet the broadest array of challenges. Of this group, respondents were twice as likely to report an increase in employee productivity following an M&A than people not in this group. Employee morale was reported as increasing after such actions by 50% for the fully prepared group, as opposed to 20% for the non-prepared group. The prepared group was also much less likely to report declines in morale and engagement than the other group (28% v. 47%).
The group that considered themselves fully prepared was also higher performers when financial performance over three years was looked at, by a margin of 37% to 16%.
The survey, “HR Rises to the Challenge: Unlocking the Value of M&A”, was conducted in the summer of 2004 and polled 201 HR and business executives. The full survey is available on request from Towers Perrin ( www.towersperrin.com ), a professional services firm.