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Focusing on HR aspect of M&A could improve deal’s outcome: Towers Perrin


December 21, 2009   by Canadian Underwriter


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Those companies that place an emphasis on the ‘people’ aspect of a merger and acquisition are more likely to have a successful deal, research from risk management firm Towers Perrin suggests.
Towers Perrin surveyed more than 400 senior HR and business executives globally, including 118 Canadian respondents. It compared the integration practices of companies that considered recent M&A transactions to be successful in meeting primary goals with those that believed their deal was less successful.
Two examples that helped pinpoint specific differences that contributed to overall success include:
•    the relative importance of employee-centric thinking; and
•    early involvement of the HR function in driving this thinking and helping business leaders focus appropriately on people issues.
Companies judging their deals successful involved HR more often in all phases of the transaction than did those with less successful deals. This was true from the target evaluation phase (57% more often) through due diligence (58% more often) to integration planning (37% more often) and integration implementation (33% more often).
“By contrast, companies judging their deals less successful seemed to undervalue HR’s role, not just in the early phases of a transaction, but also during implementation – when employee communication and buy-in are most critical,” a Towers Perrin release says.
Forty-two per cent of the successful deal makers measured employee engagement and 39% measured talent acquisition and retention — both are critical elements in a transaction’s success. By contrast, only 28% of companies with less successful deals viewed these as important factors in determining overall success of an M&A deal.


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