HR Due Diligence for Successful M&A Projects

Research consistently shows that a due diligence process that includes a careful review of important HR and people-related issues, identifying potential risks and opportunities for improvement, is far more likely to yield a successful M&A outcome. Hutchison Group consultants have decades of experience helping companies achieve their M&A goals — providing expert assistance with due diligence and transition strategies to lower costs, improve productivity and facilitate a smooth transition.

Many M&A Projects Fail to Realize Full Potential

People-Related Issues Cited Among Principle Reasons for Failure

According to recent studies, 83 percent of new mergers and acquisitions fail to achieve their financial objor ectives. Not surprisingly, approximately 65 percent of the companies surveyed cited people-related issues among the principal reasons for failure. To help ensure the success of the acquisition, a thorough HR due diligence should address the following issues:

• Identify opportunities to improve productivity and labor costs
• Review employee compensation against industry standards
• Identify restrictive work rules and complex job structures
• Determine vulnerability to future union organizing (nonunion locations)
• Negotiate new competitive labor agreements (union locations)
• Assess key management and executive personnel
• Develop comprehensive transition and integration plans
• Identify needs for employee and management training
• Research and secure valuable government incentives

Key Changes Must Be Accelerated to Capture Value

Mergers and acquisitions represent a “unique window of opportunity” to rapidly implement change, reduce future costs and create a positive work environment. However, key changes must be accelerated to capture value. Unfortunately, due to the magnitude of these projects and aggressive timetables for completion, few companies have the adequate people resources to identify and fully capitalize on opportunities for change. As a result, many potential savings and improvements are never realized.

Hutchison Group can provide the additional support required to ensure all opportunities for improvement are realized, helping to create a sustained, competitive advantage for your new business. Our team of professionals has decades of experience helping our clients evaluate potential mergers and acquisitions — identifying potential risks and opportunities for enhancing company value.

Maintain Union-Free Status or Negotiate New Labor Agreements

While we are highly regarded for our ability to negotiate new competitive labor agreements during acquisitions, for those organizations with a nonunion workforce, we can help to discreetly determine vulnerability to future union organizing. Given our experience, we have learned to identify key warning signs and recommend proactive steps to reduce your risk of a union organizing campaign. Failure to do so can result in having to engage in a costly and disruptive union campaign that can create deep and lasting divisions within the workforce, not to mention the negative impact on company performance, should the union prevail.

Reassure the Board of Directors and Shareholders

As an added benefit, proper due diligence serves to help to reassure the Board of Directors and Shareholders that management has been diligent in capitalizing on opportunities for improvement and avoiding potential risks that might negatively impact share price or company valuation.

We Can Help Ensure Your Acquisition’s Success

For over 30 years, our team of labor relations consultants has had the privilege of working with some of the world’s best companies, helping them achieve their M&A goals, reducing costs, improving labor relations, negotiating innovative labor agreements or maintaining union-free status. For a complete list of our clients and services please visit our web page at www.hutchgrp.com.