Human Resources (HR) professionals can, and should, take more of a business minded approach during mergers and acquisitions (M&A), says Towers Watson, a global professional services company. The role of the HR practitioner shifts during times of change, but the right, responsive communications can have a resoundingly positive impact on the outcome of an M&A deal.

A Towers Watson survey shows that 59% of respondents admitted to having only a minor impact on revenue growth related to M&A. HR practitioners instead focus on employee engagement and talent acquisition and retention, which they understandably recognise as their strong points. However, the research shows that M&A deals are more likely to be successful if HR seek to understand financial incentives and goals.

Steve Allan, M&A practice leader at Towers Watson, says, “We see time and time again that deals perform better over the long-term when HR teams are engaged early. But, in order to be effective at the table, HR professionals needs to earn the respect and confidence of the core M&A team by demonstrating strategic insight and speaking the same language as the deal-makers, who are mostly likely to have a finance background.”

The survey shows that the HR function was more involved in influencing the effectiveness of senior leaders, clearly defining metrics for success and creating an M&A centre of excellence during some of the more successful deals. This demonstrates a great opportunity for HR practitioners to grow their influence at a time when M&A activity is particularly high.

Jessica Norton, director of executive compensation at Towers Watson, says, “A key area where HR teams can make a big difference is around leadership retention planning. For example, during deals there is a tendency to focus on retention structures, these are typically a short-term tactic to buy time while the details are firmed up. HR needs to take a more strategic approach focusing on leadership engagement and empowering leaders to drive change, leveraging the window of opportunity that deals create.”

The HR Contribution to M&A Success survey took responses from 50 organisations, all of whom have completed mergers or acquisitions in the past four years.