Let Aspen HR identify any HR compliance gaps and potential improvements and cost savings to your employee benefits program.
HR due diligence is crucial in mergers and acquisitions. Some of the challenges that can arise, such as financial, legal, and even cultural issues, will reduce workplace morale and productivity if HR due diligence is not exercised. HR due diligence is so important because it helps acquirers get a better understanding of the company’s employment practices, liabilities, and culture.
This process helps in discovering HR-related liabilities and risks that may have an influence on the business’s financial performance after an acquisition takes place. For example, HR due diligence may reveal problems like a failure to comply with employment rules, inadequate HR policies and processes, employee conflicts, or potential legal challenges. These problems might cost the acquiring company a lot in terms of penalties and legal fees if they are not resolved before the purchase.
Aspen will provide the following services at your request:
Identify any areas to update the employee handbook
Review opportunities to automate and improve existing HR processes
Review of employee claims: EPL, wage, hour, etc.
Review of job application, new hire packet, and process, to ensure compliance with updated laws and forms
Review all existing job descriptions & roles to determine exempt/non-exempt classification and give recommendations for rectifying any misclassifications
Analyze employee turnover, online employee review, and any other employee engagement reports
Provide compensation benchmarking, based on title, industry, and location
Provide a comparison and analysis of the target company’s employee benefit program
Provide complementary Predictive Index profiles and analysis of key leaders
Let us help you navigate the complexities of HR due diligence in mergers and acquisitions!
When you’re acquiring or merging with a new company, it helps to have an HR due diligence checklist that can help guide you through the process and make better decisions. With a checklist, you identify HR challenges and opportunities and resolve them before they occur.
This involved reviewing the target company’s employee benefit program and plans with the goal of identifying areas to improve and reduce cost. Specifically, we will perform the following review;
This involves assessing the target company’s approach to managing and developing talent to determine its strengths, weaknesses, and potential areas for improvement.
Some important factors to keep in mind with talent management are:
This involves assessing the target company’s work environment, culture, and values to determine if they align with the acquiring company’s culture and values.
When analyzing company culture, look at:
This involves a thorough review of the target company’s HR policies, practices, and procedures to ensure that they comply with relevant laws and regulations.
Some examples of what’s involved in HR compliance are:
This involves examining the target company’s organizational structure to understand how the HR function is organized and how it fits within the overall organizational structure of the acquired company.
When reviewing the organizational structure, some things to consider are:
Without appropriate HR due diligence, potentially damaging concerns may go unnoticed until the acquisition is complete, leaving the acquiring company responsible for dealing with them.
When two companies that have completely different sets of HR policies and practices merge, issues can creep up quickly. With HR due diligence, these problems are identified so that the companies can merge more seamlessly.
Legal fees, fines, and damages may be significant if potential liabilities in the HR department are not identified. For instance, the acquiring business can be held accountable for any employment law infractions made by the target company after the purchase.
Cultural differences between the two merged businesses may result in post-acquisition HR problems. This can involve misalignment of the company’s values, workplace practices, and communication procedures, which can result in disputes among workers and a decline in productivity.
When HR due diligence is deemphasized, employee retention may become a problem in the future. As an example, an acquiring company’s workers may be more inclined to leave, taking their knowledge and expertise with them, if the organization does not appropriately address employee concerns throughout the purchase.
Mergers and acquisitions can bring numerous benefits, such as increased market share, improved efficiency, and expanded offerings. But without HR due diligence, there can be a wide range of challenges.
HR due diligence can help prevent problems from occurring before they even arise. For example, if there are compensation inequities between employees, this can lead to many conflicts after an acquisition takes place. Analyzing and resolving these issues early on can reduce the turnover associated with these disparities.
Legal issues can be another challenge. Addressing violations in labor law or safety regulations can help prevent legal problems.
Cultural conflicts, talent retention issues, compensation and benefit differences, legal compliance issues, and communication difficulties are just a few of the HR problems that can arise during mergers and acquisitions.
One of the main HR reasons for the failure of many mergers and acquisitions is the lack of attention to HR throughout the entire due diligence process and integration phase.
