HR and Mergers & Acquisitions

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Here’s a questions on M&A and Human Resources. Something I did over a decade ago. And it’s even more complicated in 2011.

The company I work for is considering “acquiring” another company. I put acquiring in quotes because it is in the preliminary stage and I don’t know the magnitude of the acquisition yet, we are still in the getting-to-know-you stage. If you were the sole HR person of my company (handling HR related functions), what questions would you ask the owner of the other company from the HR perspective? I have a few (basic ones related to size, types of employees, etc.), but don’t want to miss any major ones.

Schwoo. When I worked at Kemper, we had a division called Capital Development where we bought/sold/warehoused companies. I was the HR leader for that division. Really. I reported to both the CHRO and the CFO. I was 26 and I had no idea what I was doing. That’s why they put me there. Good ‘learning opportunity’ because we were acquiring technology-based insurance platforms & solutions and then laying off the employees. Sounds awesome, right?

This is also around the time I found my first gray hair.

My SPHR did not help in this process AT ALL but I had a great team of employment lawyers who did the actual ‘due diligence’ and focused on the financial aspects related to the workforce. They did research in the target market, evaluated and understood the workforce data and what it meant for benefit loads & whatnot, and they were hyper-concerned about risk.

After all, it was insurance.

I wonder — is your company public or private? How about the company you’re acquiring? Are you a US-based company? Do you have access to an employment lawyer?

Because holy crap it’s worth the money. And anything you ask ought to be tied into a broader strategic plan. What do you already know? What do you need to know to make this decision clearer? What existing employee litigation/risk load sits out there? Are you worried about increased pressure on your benefit plans? What’s the mix of the workforce? Are you buying the IP or are you also interested in buying the labor pool?

Double schwoo! I do not miss this.

There is a role for you in this process, but every acquisition I experienced was different. I know you can add value when it comes to constructing offers for new employees, creating a personnel integration strategy, and offering change management solutions. If you retain employees, you will have a ton of work to do around onboarding & training.

And good luck working with the HR lady at the acquired organization. She’s a real peach and she will totally appreciate reporting into you.

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