Compensation Opportunities in Mergers and Acquisitions

Abstract

Anyone that has spent more than 30 minutes perusing the findings of M&A studies conducted over the past 10-15 years has seen the pattern … over 50% of all mergers, acquisitions and other corporate restructurings do not achieve their desired level of success, primarily due to people issues.

These studies conducted by McKinsey, Watson Wyatt, Accenture, PwC and Mercer, reviewing well over 1,000 mergers and acquisitions, consistently found that roughly two-thirds of companies failed to reach their profit goals following a merger, and less than half met their cost-cutting goals.

Given that key value contributors (who might leave due to uncertainty) make up a very large portion of deal value, and that direct / indirect staff costs typically comprise 70-80% of total operating budget (hence productivity dips cost millions), it’s easy to see why organizations treat M&A events as potential game-changers.

This paper explores A relatively new discipline within Human Resources: HR-M&A: the set of increasingly formal and well-developed processes and tools for proactively managing the people-related risks and opportunities inherent in M&A deals.