10 HR Roles in Business Merger and Acquisition

In a globalized and increasingly competitive economic environment, businesses must constantly adjust and restructure to survive and grow. Radical forms of enterprise restructuring such as merger and acquisition (M&A) are a constant occurrence. Like any other forms of restructuring, M&A involves human costs and affects not only the employers and employees, but also other stakeholders. Lack of attention paid to the human dimension of M&As could prevent success and even lead to a complete failure. 

Merger and Acquisition explained 

Merger and acquisition are generally practised by enterprises to strengthen and maintain their positions in the global as well as national marketplace. Merger is a combination of two companies to form one, while acquisition is when a company is taken over by the other firm. EduPristine explained that M&A can occur in four situations, including by purchasing assets, purchasing common shares, exchange shares of assets, and by exchanging shares for shares.  

Why do employers do merger and acquisition? 

There are numerous reasons for companies to adopt merger and acquisition. Some of the most frequent reasons are as follows: 

• Mergers for market dominance, economies of scale
• Mergers for channel control 
• Growth for risk spreading, cost-cutting, synergies, and defensive drivers
• Survival, critical mass, sales maximization
• Flexibility and leverage
• Or gaining a core competence to do more combination 

See also: How Do Big Tech Firms in Singapore and Elsewhere in Asia Recruit Their Staff?

Companies that are successful and inventive in M&A will not only create value but also develop core competence in combination management itself. In turn, this opportunity can lead to job growth over time. When the M&A fails, however, jobs can be lost and the impact on employees and society can be significant. Failed M&A is likely to result in even more negative social consequences, Schuler and Jackson’s study revealed. 

HR roles in the merger and acquisition 

The HR department, in this regard, plays a pivotal role in the process of merger and acquisition between two companies. HR plays a key role in managing all crises as well as disputes that might crop up in an organisation, as and when the process of merger and acquisition sets off. According to Schuler and Jackson’s study, here are the main roles of the HR department before, during, and after the M&A. 

1. Developing key strategies for company’s M&A activities, including in the pre-combination, combination, and solidification and assessment. 
2. Providing arguments for and against M&A activity. 
3. Outlining social costs, for successful and unsuccessful combinations.
4. Managing soft due diligence activity, including gaining knowledge from the two workforces, understanding the potential impact on the companies’ multiple stakeholders, accessing the management team of the other company, conducting analysis, comparing benefits, compensation policies, and labour contracts, and assessing the cultural match between the two firms. 
5. Providing input into managing the process of change. 
6. Advising top management on the merged company’s new organisation structure
7. Creating transition teams, especially in terms of development infrastructure, process and design systems, address cultural issues, training, and staffing management. 
8. Overseeing communication aimed at realising a vision of the new organisation. 
9. Managing the learning process. 
10. Recasting, identifying, and embracing new roles and competencies for HR leader. 

Read also: HR Business Partner vs. Just HR: Which One Do You Want To Be?