The Role of HR in International Mergers & Acquisitions (M&A)
If you are managing a business & considering International Mergers and Acquisitions activities in the near future, it is imperative that you’re aware of the HR best practices
M&A transactions are a significant milestone for any company. Whether to increase market share, expand globally, or strengthen a business strategy, international Mergers and Acquisitions are often a central part of non-organic growth plans.
However, the process is considerably complex, involving finance, legal, IT, and of course, HR.
HR plays a crucial role in this journey, way before the transaction date to ensure a smooth transition post announcement that will enable the acquired/merged entity to continue operating effectively, with all employees aware and focussed on the strategic goals of the ‘new’ business.
M&A projects can be categorised into 3 phases, the pre-M&A activities, the M&A transaction itself, and ensuring success and stability of the business or businesses post-M&A event.
So let’s take a look in detail at what a successful HR M&A strategy should look like.
Pre-M&A HR Strategy:
There are many considerations involved in a pre-M&A HR strategy. Here are a few key responsibilities that the HR function will focus on to craft the pre-merger strategy:
1. Workforce Assessment
- Employee Data Collection: Compile comprehensive records, including contracts, compensation structures, benefits, and compliance with labour laws for both/all entities (where possible).
- Talent Assessment: Evaluate the skills, roles, and performance of employees in both organisations to identify key talent, potential redundancies, and skill gaps.
- Cultural Assessment: Assess organisational cultures, communication styles, and values to identify potential areas of conflict or alignment.
2. Compliance and Union/Works Council Consultation
Compliance across international labour laws is a major issue in cross-border M&As. Many regions, especially in Europe, require HR to coordinate with local unions or works councils.
These consultations are critical to addressing job security, employee benefits, and restructuring to prevent legal challenges that could delay or complicate the merger.
For any International employees that are employed via work permits and/or visa sponsorship, this situation needs careful consideration to ensure any M&A activity does not affect their employment status.
We at Beyond Borders HR pride ourselves on our ability to ensure compliance by facilitating discussions with union or works council representatives around the world, addressing regulatory requirements, and creating strategies to integrate labour agreements into the new organisational structure. This proactive approach protects our clients from potential disputes and builds a foundation of trust among their employees.
3. Integrating of Cultures
Merging two corporate cultures is challenging, with different management styles, communication practices, and core values often clashing. Leaders frequently cite cultural integration as a top concern since friction can hinder collaboration and productivity.
Through cultural due diligence, we help assess each organisation’s values and practices, providing innovative and personalised integration strategies that respect each work culture.
Our approach has a proven record of enabling leaders to create a unified environment that balances cultural differences, fostering collaboration and engagement among employees.
4. Communicating Expected Changes
Throughout the pre-merger phase, communication is key. HR works on crafting a communication plan that will keep employees informed about what’s happening, why it’s happening, and what’s expected.
When employees are provided with well structured communication from management, they’re less likely to feel anxious or uncertain about their future, which is crucial for their buy-in, morale and ongoing productivity.
Involve senior leaders in sharing the vision and addressing concerns to build trust.
We are strong advocates of keeping open communication channels and transparency in all processes. Providing avenues for employees to ask questions, voice concerns, such as town hall sessions or anonymous surveys that support the normal day to day management of employees.
This helps keep all involved stakeholders keep their peace of mind and focus on the actual challenges instead of continuously tackling arising misconceptions.
5. Employee Retention and Engagement
This is an important element to ensure consistency once the announcement of the M&A event takes place.
Identifying and incentivising key talent to stay, using retention bonuses, further career development opportunities or clear future roles is a must have strategy in your armoury.
6. Contingency Planning
Identifying and preparing for any worst-case scenarios, such as mass resignations or operation disputes are highly recommended.
During the M&A Process:
The M&A process can take anywhere from a few months to several years, depending on the size of the deal and the number of variables. Hence, it is usually a very turbulent time for all involved parties.
During this period the HR function plays an active role in keeping the operations steady by handling real-time concerns and supporting a steady transition.
1. Staying Compliant
Legal compliance is a top priority, especially during this phase. The legalities of employment contracts, employee benefits, and new organisational policies require careful attention, especially when these aspects may already differ widely between the merging entities.
CHROs and VPs face immense pressure to ensure every detail is compliant while still aligning with the company’s overarching goals.
We stay involved throughout the process, guiding companies through the legal requirements of each region, managing compliance needs, and helping draft new policies that satisfy both organisational and legal requirements.
2. Retaining Top Talent
Top performers are invaluable, but M&As often create uncertainty that leads to talent attrition. Losing key personnel can destabilise the newly combined company, impacting productivity and morale.
We work with HR leaders to identify high-potential employees and create retention programs, such as growth opportunities, competitive compensation, and role clarity.
Our retention approach not only keeps talent on board but also enhances employee confidence in the company’s direction.
3. Supporting Cultural Integration
Building a cohesive work culture is crucial yet often overlooked. Many leaders worry about maintaining morale during integration, as uncertainty can lead to disengagement.
Our experts help maintain cultural alignment by hosting joint workshops, team-building activities, and cross-company meetings that allow employees to collaborate and form a shared vision.
This support fosters an inclusive, productive environment where all teams feel valued and understood.
4. Employee Benefits and Compensation Alignment
The aligning of employee benefits and compensation is crucial for ensuring a smooth transition and the long-term success of the business.
Misalignment in these areas can lead to confusion, dissatisfaction, and a loss of trust among employees, potentially driving key talent to leave the organisation at a critical time.
Post-Merger HR Strategy:
After the dust settles, the focus shifts to making the merger sustainable and beneficial for all. Not handling post-merger challenges expertly can derail what the merging companies set out to do.
This is the time to focus on value creation, and build & maintain momentum in achieving the business objectives. The role of HR at this stage is unquestionably crucial.
1. Restructuring Roles and Responsibilities
Restructuring roles to align with the new organisation’s needs becomes essential. Leaders often struggle with defining roles and ensuring each team member feels engaged in the company’s mission.
We offer post-merger support to refine job descriptions, clarify responsibilities, and establish new reporting structures. By creating clarity around roles, we help our clients eliminate redundancies and promote a more productive, cohesive workforce.
2. Keeping in touch with Works Councils and Unions
Communication with works councils, union representatives and key stakeholders does not end post-M&A event. Ongoing dialogue is essential to address any concerns, ensuring employees feel heard and supported.
Our team facilitates regular check-ins with works councils, unions and employee representatives, addressing new feedback and making incremental improvements that align with the organisation’s evolving needs. This sustained approach helps maintain trust and fosters stability within the workforce.
3. Thriving in a Shared Culture
Fostering a single, united culture is a long-term effort. Leaders need consistent strategies to encourage collaboration and maintain employee engagement, so the company operates as one unified entity.
We champion initiatives such as feedback loops, value workshops, and leadership training to promote a shared company identity. Through these programs, we enable our clients to embed values that resonate with both legacy teams, fostering a strong culture that drives the company’s goals forward.
4. Monitoring Progress
To gauge the M&A event success, HR must continuously monitor metrics like employee retention, productivity, and overall satisfaction. Without these insights, identifying areas for improvement can be challenging.
We provide support through tailored performance tracking and feedback collection, allowing companies to adjust and refine their integration plans based on real-time data. This way, our clients can ensure a high level of engagement and alignment with the company’s vision.
How Beyond Borders HR can help you with International Mergers & Acquisitions
In international Mergers & Acquisitions, HR’s involvement is indispensable to ensuring not just legal compliance but also cultural cohesion and employee well-being. By addressing both pre- and post-merger challenges—particularly consulting with works councils and unions, our team helps build a resilient foundation for your organisational growth.
Through strategic planning, effective communication, and sustained employee engagement, our expert HR professionals drive successful mergers, supporting a future-ready, globally integrated workforce which is ready and set to hit go on achieving your business objectives.
With Beyond Borders HR, you can rest assured that your International M&A activities are in expert hands while you focus on growing your business.
