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  • Post-Merger Activities of Human Resources Teams

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    People Post-Merger

    One of the most difficult issues facing Human Resources post-merger is the prospect of employee layoffs. When two companies come together as one, there is usually some degree of overlap between the functions and roles of the combined organizations. This is especially true with back-office functions like accounting, technology—and yes, HR. Some eliminations may be required. Here is one way to prepare for and handle this task, step-by-step:

    1. Assess the newly merged company’s requirements for jobs and talent. Your HR department should be ready to present a recommended approach for employee evaluations—one that shows management the roles and job functions in both organizations, and the overlap among them. Develop a protocol for handling skill and functional redundancies, so you can quickly determine which employees should be retained.
    2. Draw up a termination agreement for each affected employee. The agreement should explain the reasons for the layoff, terms of the severance package (if any), and final paycheck amount.
    3. Implement the transition plan by:
    • Informing employees who will be losing their jobs. Typically, layoffs should happen all at once. This helps to contain overall disruption and limit litigation risk. It also helps sow the seeds for a relatively swift return to business as usual. A member of your HR team should meet with each employee in a private setting and have his/her final pay arrangements ready. This is also the time to have the employee sign the termination agreement, to help protect the company from potential litigation.
    • Selecting, arranging and facilitating outplacement and counseling services for employees who will be leaving.
    • Bringing retained employees together for a meeting. Explain why staffing changes were made, and reassure retained employees of their importance to the company. This ensures that retained employees understand the reasoning behind management’s decisions and that they have clear and immediate guidance on their new roles and responsibilities.
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    Game Plan

    To help prepare for the task of post-merger staffing changes, you may want to check out a few expert perspectives. This report in the Cornell HR Review—features remarks from John Lynch, Senior VP of Corporate HR at GE—and discusses important people strategies. And this booklet PDF by Price Waterhouse Coopers explains how to integrate and maximize your people after the deal.