Challenges and pitfalls abound for HR professionals during M&As

Share information early and often to quell fears and rumours
By Marjorie Wallens
|Canadian HR Reporter|Last Updated: 01/17/2006

Although between 50 and 70 per cent fail to live up to their expectations, mergers and acquisitions continue to be a key growth strategy for companies. According to a KPMG study released last month, Canada played host to 1,064 M&A deals in the first 11 months of 2005, an increase of 22 per cent over the previous year.

Certainly, not all mergers and acquisitions are alike. However, among those M&As that require employee integration, one common predictor for success is the success of the human resource and communications component. According to a recent study conducted by the international consultancy McKinsey, people issues account for nearly one-half of all merger failures. This includes poor communications, cultural clashes and lack of employee support.

What are the communication pitfalls and challenges HR professionals face during a merger and acquisition? Because a merger or acquisition typically means reducing headcounts and downsizing, HR professionals are confronted with hundreds of tasks. These range from maintaining a motivated and productive workforce in the face of employee anxiety and upheaval, to planning for a successful integration. It is not surprising that communications can get lost in the pile, which means management must make it a priority.