Merger and Acquisition (M&A) activity is expected to increase over the course of 2025, specifically within financial services, as companies look to grow.
HR professionals report that with current increasing work pressures they are not fully prepared to handle these complex transactions and conduct the appropriate due diligence required.
Specifically to HR, due diligence includes a comprehensive review of the company’s policies, liabilities and risks associated with the employees. Looking at the culture and the people is critical in ensuring that the deal is successful and integration of people is engaging and inclusive. Understanding the business, mitigating risk and identifying potential issues, can help to ensure a successful transaction, and may require adjustments to the original deal.
The type of data and information gathered as part of the overall due diligence includes:
- Employee data
- Employment contracts outlining the terms
- Compensation and benefits structures, and entitlements
- HR policies and procedures e.g. staff handbook
- HR practices e.g. recruitment
- Disputes and past tribunal claims
- Cultural processes e.g. hierarchy structures, company values
From a timing perspective, HR professionals involved in the due diligence should be notified immediately of the potential M&A, to ensure that there is sufficient time to request the relevant data e.g. company policies, employee data. In a recent survey it was reported that ‘less than one in five respondents believe their HR teams have been properly included in preliminary negotiations.’ It is recommended that a focus group is set up, involving all of the areas of the business in the due diligence scope e.g. finance, legal, operations, to plan and engage in the process. The HR due diligence can be conducted by the internal HR teams or outsourced to a HR consultancy and legal team.
For more information on the Merger and Acquisition (M&A) and the Merger and Acquisition post completion service offered, reach out to our employment team on 0345 646 0406 or fill in our online enquiry form. Nockolds can provide a M&A service, incorporating the employment/HR requirements.