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How can HR prepare for a Merger & Acquisition process?

There is no set way to lead a business through a Merger & Acquisition (M&A) process, but here are some top tips from ViewHR on how HR can be as prepared as possible in readiness for a change of owner:

Secure your own oxygen mask

Allow yourself some time to process the news of the upcoming sales process. Even if the news was expected, it is still a shock to know that the world as you know it is likely to change, and possibly significantly. Do whatever it is that you need to do to process this information; you need to be comfortable yourself before you support others.

Get your leadership cap on

Putting your own feelings aside, it is critical that the HR team show up as leaders, now more so than ever. Your leaders and employees will be looking to HR for guidance. You may not be able to answer all their questions but tell them what you can and acknowledge that you don’t have all the answers right now. Be as transparent as you can as employees will see right through non authentic leadership which may lead to a feeling of companywide uncertainty.

Data, know your numbers

Whist the hunt for potential owners in on, there should be a sharp focus on getting data cleaned and accessible. Data is king and there will be a requirement for you to provide employee data (anonymised of course). There will be significant interest in key people metrics like employee engagement, absence and attrition rates, average length of service etc.  

You should also be prepared to provide data about your people processes, such as recruitment and performance management. Equality and diversity statistics may also be asked for, as well as “people costs” factored into the businesses cost to serve.

ViewHR cannot stress enough the importance of being with regards to your data. Know your numbers and be prepared for them to be interrogated during the process, especially during due diligence.

Documentation, be organised

It goes without saying that your employee documentation should be up together going into this process. ViewHR would always suggest going a step further and auditing your employee files and HR documentation. During due diligence process, you may be asked for files at random. Potential buyers will want to see that appropriate paperwork, such as contracts of employment and right to work in the UK are held for every employee.

Poor data and missing files can be a big red flag for potential buyers. Do not let poor documentation stand in the way of a potential acquisition.  

Tie up loose ends

Potential buyers will want to understand any potential liability associated with their purchase. Close attention should be paid to any outstanding disputes, such as employee grievances, pending unfair dismissal or discrimination claims. A commercial approach, such as settlement agreements, may be considered to reduce potential liability for the new owner.

Keeping people and customers engaged

Potential buyers will be looking at many arears of the business, but high on most of their agendas will be customer and employee engagement and satisfaction. Galvanise your leadership community in understanding the significance of maintaining standards in these areas. This will be a significant challenge; the business is likely to be stretched already preparing for the acquisition, so it would be wise to bring in some external support to complement your HR and operational teams.

Preparing for a change in owner

ViewHR appreciates that an acquisition can result in a wide spectrum of changes for businesses. Some owners will mirror the operations of the previous owner; some will dramatically change because of the acquisition and some will, unfortunately, result in redundancies. ViewHR’s advice is to prepare for all eventualities. M&A processes by nature mean you are unlikely to know which road you are going down until very late in the process.

Whilst you may not know what exactually it is you are preparing for, you can agree on how you will execute your plans in advance. Again, communication is key. Decide how you will communicate any changes with your employees and have these channels ready for use. A multi-pronged attack is usually best, a mixture of written communications, face to face meetings (where possible), videos, visuals around the workplace etc is recommended.

Engage as early as you can with the new owner to understand their expectations. Get to know their preferred ways of communicating, their values and how you can work together in making the transition as smooth as possible for everyone involved.

Ask for help

Preparing for a merger or acquisition and maintaining customer and employee engagement will be a significant challenge, so it would be wise to bring in some external support to complement your HR and operational teams.

At ViewHR, we have experience with managing the M&A process across a wide range of businesses. If you are looking for support or have any questions, then please contact a member of the team today.