Two-thirds of employers track benefits costs in M&A deals

Some 70% of companies track the costs of consolidating and harmonising employee benefits during a merger and acquisition (M&A), which can have a significant impact on post-deal costs.

While some employers do review key HR issues such as benefits, remuneration and leadership, others fail to quantify these for negotiation purposes. More than three-quarters (77%), for example, identify management capabilities but only 5% quantify the risks, according to the Hewitt Human Capital Risk Management During M&A Transactions research. This also revealed that 82% of companies fail to use HR risk data to negotiate the deal price during the M&A process.

Francis Stickland, head of corporate restructuring and change, Europe at Hewitt Associates, said: “The overarching goal of any acquisition is to create additional value and these results clearly illustrate the opportunity for HR directors to influence deal makers. As our research shows, an increasing number of deals are taking full account of companies’ greatest assets – people. In our experience, this can only be done with a structured HR risk evaluation and management process, plus quantifying human capital risks properly during the due diligence stage.”