HR challenges post M&As

A firm grip on issues related to the critical aspects like leadership, employee communications, talent retention and cultural alignment are very important. If the HR managers can get these issues right, then retaining key people will be an easy task.

Retaining talent and key management professionals are the key challenge the human resources (HR) professionals often face after the management restructuring following mergers and acquisition (M&A). To ensure that the core teams of the two companies’ remain with the new entity, HR managers should follow certain dos and don’ts. For this, a firm grip on issues related to the critical aspects like leadership, employee communications, talent retention and cultural alignment are very important. If the HR managers can get these issues right, then retaining key people will be an easy task.

A plan to avoid mistakes


Central to a successful post-M&A HR strategy is to have a consistent plan for employees and communicating it to the staff clearly and regularly.  Such a strategy would help HR managers to avoid common mistakes and prevent talent attrition post-M&As.

A common mistake that HR managers should avoid post deal-making is imposing new organizational structures, systems, processes, and standards on the acquired entities without explanations. Often acceptance of new work culture by the employees of the acquired firm is considered as a given. Such an approach may face employee backlash leading to attrition. Therefore, for the post-merger integration to succeed, HR managers should define and communicate a clear vision, carefully consider the appropriate and realistic rate of change in career graph, and make sure they have leaders in place who understand and are committed to the role of being a change agent. Also, important decisions should be taken on time.

Anticipating challenges

To avoid employee concerns after M&As HR managers should anticipate potential challenges that the combined entities may face going forward. Such a vision will help frame solutions to address HR issues and employee concerns if and when they crop up.  Equally important is the need to communicate clearly with the mid-management and lower-rung employees who are not privy to the confidential information of the deal-making. This is important to eliminate anxiety among the staff.

Feedback loop

Communication plays an important role in keeping employee confidence and morale intact after any merger or acquisition. An effective communication tool is to hold interactive workshops or training sessions for all employees from all the companies that are involved in the deal. Another method is to maintain periodic e-mail newsletters to update key staff about the different stages of the M&A process and assuage their concerns. It is also important for HR managers to hold team-building activities and social events to get new team members acquainted and involved in a combined entity culture. The middle management should be briefed about each step of the M&A process so that they can keep their team members informed about what is happening at the organization level. Other important steps in post M&A man-management include developing macro messages, a detailed analysis of the key audiences, micro or issue-specific messages, appropriate media mix, a strategy timeline for smooth functioning and ensuring that the staff policies are implemented in the right manner.

Finally, having a feedback loop is most important for an M&A to succeed. A research paper published by the Innovative Space of Scientific Research Journals shows that 67% of mergers fail to meet their objectives due to indifference to employees’ concerns. To overcome this, employees should be given a chance to submit their feedback. An interactive e-mail newsletter may be one solution to address this issue. Bringing and making employees closer and make them feel valued will give the best chance for an HR strategy to succeed post-M&A.

In sum, for M&A to work successfully, HR managers should have an a priori plan to identify key employee concerns that may crop up in the future in a bid to retain key staff members after the merger. HR should also develop a rewards strategy for employees. Communicating these policies to employees clearly forms the core of the HR strategy. Timely implementation of these steps is important for any M&A to work successfully and bring synergy.