Overview: HR has a crucial role to play during a restructuring, merger or acquisition. They must assist in collecting and protecting human capital information, ease the transition from the current company culture to the new company culture, ensure employees maintain or transition into adequate benefits programs and address employee concerns regarding post-event structure, performance evaluation and infrastructure.
During the initial evaluation of a potential reorganization, HR helps determine whether the existing culture is compatible with that of the new or resulting company. Throughout the transition process, the HR specialist is often the point-person in transitioning employees between cultures while also helping them to migrate from and to benefits plans. Once the event is complete, the HR specialist has a key role in reestablishing policies and procedures, ensuring employees understand any changes and addressing employee concerns. At all times, HR is integral in ensuring the transition is smooth, problem-free, and that it does not create any issues in the future.
Trends: Once the reorganization event is complete, HR remains active in ensuring employee concerns are collected and addressed in an organized, efficient manner. Designating employees to manage and receive concerns from employees, while conducting periodic team meetings and maintaining an internal communications structure can go a long way toward managing employee expectations. If HR specialists are successful in addressing employee concerns, they may substantially improve the new company's chances of success.
Author: Michael Jacobson, JD, Legal Editor
Michael C. Jacobson discovers what issues force companies into mergers or acquisitions, what makes companies attractive for these types of deals, and what the risk factors for failure are.
Updated to reflect protected communications under the Defend Trade Secrets Act, effective May 11, 2016, and amendments to various notice-posting penalties.
Several Employment Law Manual sections have been updated to reflect New York City's new Grocery Worker Retention Act, set to go into effect on May 8, 2016.
Company restructures like mergers or acquisitions are a tremendous opportunity for HR professionals to really shine. HR needs to be proactive in preparing for the restructure and should take the lead in gathering information from both companies (or more) and conducting a comparison study or a "cultural compatibility assessment." The results of that study are so significant that they can affect the price of the acquisition, set the course of the new company's trajectory, or even raise issues that cancel a merger or acquisition altogether.
An employer may use this checklist to assist in the process of identifying, collecting and reviewing critical information to determine the risk factors involved in an organization merger or acquisition. This checklist may also be used to ensure seamless integration once the transaction has been completed.
This briefing for supervisors provides ideas and best practices on responding to the challenges faced during a corporate restructuring.
HR guidance on preparing for, processing and addressing employee concerns before, during and after a merger or acquisition.