Human Resource Management in Mergers and Acquisitions

Subject: Employee Management
Pages: 3
Words: 818
Reading time:
3 min
Study level: College


Mergers and acquisitions (M&A) involve the joining of companies and their assets such as sharing expertise, acquisition of technology, and diversification of products to increase their competitive position, market dominance, and growth. Avinadav, Chernonog, and Perlman (2018) argue that the main objective of the M&A strategy is to exploit the strengths of the organizations and establish a large market share. Some of the significant factors in M&A are a modification of organization culture, synergy, and mobilization of resources. Thus, this essay examines three articles on M&A and highlights the role of HRM involvement and the reduction of force as the key success factors of the strategy.

What main point(s) about merging companies do the authors make particularly relating to HRM?

The Central Role of HRM in M&A Success

HRM plays a central role in ensuring the success of the M&A deal through active involvement at the initial stages of the identification of the complementary company and due diligence at the final stage of complete integration. Tarba and Cooper (2016) hold that the involvement of HRM is a key success factor in the M&A deal and must be considered at every stage of the process. Avinadav et al. (2018) explain that HR professionals facilitate the long-term success of M&A by advising management on human resource matters, identifying potential problems, and ensuring clear communication to all. Additionally, HRM helps to integrate HR practices, talent decisions such as layoffs, and cultures of the two organizations to guarantee the adequate functioning of the new framework. Since uncertainty and resistance affect a merger or acquisition, HR facilitates efficient transition through communication, counseling, and planning of financial compensation for the affected parties.

Early Involvement of HRM

Early involvement of HRM in the M&A deals positively influences the success level of the transaction. HRM needs to be involved in the initial stages of merger and acquisition to conduct due diligence and develop a model of M&A success. Thus, early involvement helps HR professionals to make adequate strategic preparations to avoid costly mistakes involving human capital requirements, layoffs, compensation, and friction in production. Additionally, HR participates in the early engagement of employees from both sides of M&A deal to adjust and streamline the takeover process,

Provide actual employer best practices (and employer name), if possible.

Bank of Punjab and Centurion Bank of India merger to form Centurion Bank of Punjab

The companies involved HRM in all stages of the M&A process to formulate essential policies to guide through the transition process

B. Reduction in Force (RIF)

What main point(s) about RIFs do authors make particularly relating to HRM?

Skill Retention

To create an overall integration plan, HR must understand the incoming employee population and skills to avoid losing key talents and skills. Additionally, the HR professionals’ role is to identify key departmental employees and develop a strategy to retain and engage them in the new organization. According to Makri (2017), the success level of M&A depends on the capacity and effectiveness of HRM to retain an adequate level of skilled workforce from both organizations. Makri (2017) asserts that HRM communicates to employees about the changes in reporting lines, different positions’ roles in the organization, and their contribution to the new organization’s functional team. Thus, HR must identify key employees in all departments and develop an appropriate retention strategy to ensure that they remain engaged as part of the new organization team.

Eliminating Positions

HRM plays a vital role in adopting and developing an effective work structure. In redesigning the new organization outlook to eliminate the risk of failure and avoid losing key departments, HRM must create a comprehensive integration plan. The process constitutes an evaluation of the significance of various departments, assessment of employee skills, enumeration of the population, and integrating two organizations’ structural differences into one robust system. HRM must work with the management and employees to alter the job descriptions of various positions, combine teams, and ensure employees understand their roles in the newly altered organization.

Provide actual employer best practices (and employer name), if possible.

The company adopts, identifies, and retains a skilled workforce through effective planning. For example, the acquisition of small technology firms such as AppyDynamics and Jasper Technologies by Cisco.


In enhancing their market dominance, M&A is one of the efficient strategies adopted by organizations to pull resources together and enhance their competitive position. However, to ensure a successful process, HR must be involved at the early stage and throughout the process to ensure the long-term success of the strategy. Some of the critical HR roles in the M&A deal include due diligence, adequate communication with human resources, proper planning of the integration process, and skill retention, and policy formulation governing the transition process. In the reduction of force, the HR professionals must adopt suitable processes to ensure the retention of skilled employees and critical functional units in the new organization essential to the maintenance of business excellence.


Avinadav, T., Chernonog, T., & Perlman, Y. (2018). Mergers and acquisitions between risk-averse parties. European Journal of Operational Research, 259(2017) 926-934. Web.

Makri, E. (2017). Group processes, intergroup relations and human resource practices in mergers and acquisitions post-combination: A critical review and research agenda for the future. Environment and Social Psychology, 2(1), 46-58. Web.

Tarba, S., & Cooper, C. (2016). HRM practices in strategic partnerships. The International Journal of Human Resource Management, 27(20), 2305-2309. Web.