Traditionally, Mergers and Acquisitions have had an unpleasant reputation when it comes to the feelings of the people caught up in them, creating images of large-scale job losses and brutal cost-saving measures. However, with the Great Resignation underway, in tandem with increased demand for skilled people, employees at the heart of the deal are rightly being viewed as a company’s most valuable asset. Those employees are often a key reason why that company may have been purchased in the first place.
This has led David Neikrug, CEO of Optimatum Solutions, to advocate his long-held belief that human capital must be at the center of the conversation during M&A.
A recent roundtable moderated by Neikrug, at ACG New York, sought to provide strategies to help operating partners recognize issues and behaviors employees experience during any M&A transaction. He emphasized the need to develop strategies which minimize the disruption and loss of momentum that low morale and employee disengagement can cause, potentially affecting value capture.
Some of the key takeaways from the roundtable were:
Communication is key and should be done early and often. Communication plans should be made prior to deal closure. Be as transparent as possible and convey what you know and don‘t know about future plans. Remember that employees are worried about themselves and their families. Consider what they need to hear, not just what you want to say.
M&A transitions take time and management is typically months ahead of employees in their understanding and acceptance of the deal. Therefore, avoid setting overly-aggressive timetables that do not take into consideration the change and stress employees are dealing with and the time needed to build trust.
The anxiety surrounding M&As can trigger strong reactions among employees, often because they don’t understand why it is happening and what it means to them. Management should strive to help employees understand the “why” behind the deal and the important role they play in the success of the new organization.
Transactions that include a mixing of cultures need to pay particular attention to recognize and acknowledge the contributions of both populations. Corporate “ways” are not always understood or received well by new employees. Establishing new best practices together is a strong signal of respect for both the newly acquired and existing workforces. Fostering mutual respect between teams can lead to increased collaboration and better outcomes.
Neikrug said of the event, “Today there is an increased focus within private equity to not only execute great deals, but to do them ’the right way.’ Investors are looking for greater transparency as to how employees are treated. The importance of prioritizing the human capital component of deals has never been greater.”
About Optimatum Solutions: Optimatum supports the HR workstream throughout the M&A lifecycle: from operational due diligence to day-one readiness and post-day-one synergies. They help sponsors leverage the aggregate purchasing power of their portfolio to capture value and drive margin expansion.
About David Neikrug: Based in New York, and with over 30 years of experience in the Human Resources and Employee Benefits sector, David supports organizations involved in M&A’s, ensuring sound due diligence and seamless integration. Through his understanding of ever-changing deal dynamics, David has been involved in integrations across industries as diverse as hospitality, retail, manufacturing, consumer products, financial services and pharmaceuticals.
Contact [email protected] for more information
Source: Story.KISSPR.com
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