HR Integration Failures
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Within any M&A and integration, the HR/people element tends to be an afterthought.
Although integration teams succeed in integrating both companies’ HR systems, technology, and processes ‘on paper’, they don’t always devote much attention to the different stakeholder groups. This can create a ‘culture vacuum’ – where stakeholders from both the acquired & acquiring firms are ‘left in the dark’ & uncertain of their future in the integrated company. Such a conundrum can foster ‘merger syndrome’ & job anxiety – both of which can accelerate voluntary turnover & impede productivity.
So in order to have a successful HR integration, integration teams need to prioritize stakeholder involvement & communication from the start.
What are your thoughts on the topic?
I can understand that. Hr is key and we plan on it from the beginning. That said there are still issues that arise. Of ten in larger companies integration into HR systems etc are multi department functions and they often are not aware of the steps each other must take.
The original integration management team at our company worked to have a single point of contact from each functional team or workstream such as HR, comms, IT etc. These M&A professional worked withing each of their areas to establish a playbook. In some areas this worked and still does. However HR appears to have high Turnover and the expertise is lost.
My exerince is that expertis is lost when HR do not insure for those a kind of spesial treatment. e.g key employee for eanch deparment get a kind of bonus to stay within company for spesific periode of time for exmapel 3 years.
HR, Communications, and Change Management represent your three-legged stool and are essential to any successful integration. Great thoughts and commentary here, appreciate David asking the question.
Pretty good though there David. If I may add – in some acquisitions, the acquiring firm plans to take over the assets. There is an inherent belief that people would stay as long as money hits their account. But as in most cases, these transactions end up failing. I did encounter a client who refused to do a cultural and HR DD because they were ‘multicultural’ and it would not make sense. They believed that people integration would be automatic. It was not long before most people who did not fit the parent companies ‘culture’ left, and the first closed down in a few years.
Overlooking the human aspect in M&A integration can be a costly mistake. It’s not just about merging systems but about fostering a cohesive culture where everyone feels valued and informed. Prioritizing stakeholder engagement and clear communication from the get-go is key to smoothing out the transition and reducing uncertainty.
Integration teams could establish regular town hall meetings or Q&A sessions where employees from both companies can voice their concerns and receive updates on the integration process. This creates a sense of transparency and inclusion, helping to alleviate anxieties and build trust among the workforce.
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