A manufacturer of conveyor belting was interested in acquiring a company that provided maintenance and repair services to its conveyor belts. This acquisition would add another 400 employees to the company’s population of approximately 600 workers. The business plan for this acquisition called for a sales approach where individuals from both organizations would visit potential customers together to present a new total system solution. From a people perspective, this meant that the two organizations needed to seamlessly integrate. Furthermore, the company wanted to use this opportunity to implement some of the best practices of each company to create a top-notch organization.
The human resources side of mergers and acquisitions can be crucial to the success of the integrated company. By considering human resources issues, the organization expected to:
- Increase probability of retaining key people and competencies;
- Ensure benefit and retirement costs and savings were fully captured;
- Promote smooth transition for key human resources processes, such as payroll, training, and communications; and
- Understand what cultural advantages and barriers would be created through the acquisition.
The client asked Findley to evaluate the major human resources functions of each company and provide recommendations on policy and plan changes that would support a seamless integration. The Findley team evaluated health and group benefit plans and costs, pay and incentive plans, and retirement plans along with policies and culture issues to determine the best practices for the new combined organization.
To learn more about both companies, Findley reviewed benefit plan documents and records. We also interviewed key management to further clarify key policy issues and practices. These interviews allowed us to capture thoughts on cultural differences and communication issues. We presented our findings to the management team, which included the new vice president of the acquired service company.
During the analysis, it was clear that communications would be key to the success of the transition. Findley developed a communication strategy that included employee meetings, printed communications, and a website designed to provide up-to-date information as new decisions were made. Our consultants developed the site to include a Question and Answer section that allowed newly acquired employees to post questions directly to their new vice president and to the human resources team. Findley also gathered feedback through brief polling questions.
The acquisition was completed within two months after Findley presented the study findings. The company implemented some recommendations that required immediate action. For example, Findley continued to support the company through the merging of retirement plans including communications for the plan design changes. The company also conducted an audit of exemption status shortly after the acquisition was finalized. Other recommendations from Findley’s report will be integrated into the company’s long-term strategic plans.
The communications during the transition were successful. Employees regularly visited the transition website. There were nearly 600 website hits and employees posted over 25 questions during the weeks after the transition. The client passed along this compliment about the transition communications from their executive director in Australia, “This is just first class. I applaud all who worked to put this together. Wow, this makes me proud of you guys!!!”
As a company prepares for an acquisition, human resources issues must be examined so the new organization will be successfully integrated. Through this process, you can expect to achieve enhanced financial performance and control over your human resources risk management issues.Findley Proof