|
Tips and Answers to Your Questions
Due Diligence
Which are the key areas to be covered in HR due diligence?
We often say that the people are the most significant and important resource of any organization, yet due diligence sometimes focuses on the corporate, financial, and legal dimensions of the deal while ignoring the people issues. Financial motivations are only a small part of the picture in most nonprofit mergers, while the success and failure of consolidations are profoundly connected to the people involved — so HR due diligence is critical. Even the types of questions you ask in this process will highlight and affirm the priority of the people issues in the merger process.
Elements of HR due diligence tend to be determined by the level of HR functioning within the merging entities. If the HR systems are primarily transactional in nature, then the process will focus on risk management issues, recruitment systems, record keeping, record retention, workplace safety, aligning compensation systems, benefits integration, and any potential outstanding employee relationship claims.
On a higher, more strategic level, HR due diligence can, and should, deal with issues related to corporate culture, talent retention, training and development integration, career management, employee communication strategies, compensation issues in transition, stay pay, promotional opportunities, workforce composition, past change management initiatives, and finally the interface of technology and people issues.
When presenting HR due diligence findings to the merging parties, the report can have greater impact if:
- The issues are clearly delineated and tied to merger success
- The indirect costs (talent loss, training costs, recruitment costs) are presented
- Best practices are introduced as a key to merger success
- Use of narrative from the employees’ perspective is utilized
- Cultural competence is exhibited during the due diligence process
If/when the merger goes forward, the role of the integration manager becomes key to success. This individual should have a critical role in the due diligence and planning of the people issues in a merger.
|
