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Six Tips for Managing Relocation through Mergers and Acquisitions

M&AAccording to a 2012 report by Ernst and Young on M&A activity, mergers and acquisitions are expected to increase in 2013. I can believe it as many of my clients today are either in the middle of a merger or have gone through one recently.  Certainly, mergers and acquisitions are an important tool in the corporate strategy tool belt as companies aim to capitalize on new innovations, reduce costs or enter new markets. But, mergers and acquisitions are tough. More than 50 percent of mergers and acquisitions fail and more than 80 percent fail to enhance shareholder value.

There are many reasons why acquisitions fail but they all boil down to an inability to achieve total synergy between the buyer and the company being acquired. One of the notable issues is a failure to successfully integrate resources and processes. Human resources is one such area and, as an extension of that, so is relocation. This is especially worrisome because HR and relocation touch valuable talent that can play an important role for a successful transition.  Since we have seen so much M&A in Europe lately, I thought I would share some tips for successfully integrating relocation resources and processes after a merger.  For a better chance of success, most of these actions should be taken before the ink is dry on the deal.

Take control. First and foremost, a global HR team should be identified so that they can take a leadership role in defining the parameters for relocation procedures moving forward. Assuming that the acquired company should adopt the relocation program of its buyer is short sighted.  It’s quite possible that the two companies have best practices to share, especially if the merger involves new markets. It will be up to the HR team to analyze both relocation programs, determine any commonalities and/or obstacles, synthesize findings into a plan of action and monitor implementation progress for at least year.

Make policy decisions right away.  As part of the process mentioned above, global HR must define relocation policies right away – or, even better, before the M&A even happens. Then, they must ensure all teams understand the global policies and procedures. It’s likely that valuable talent from both companies will be moving among the different locations and mergers are hard enough without losing employees because of policy inconsistencies, a lack of communication or inattentive supervision.

Define roles. This is the time to decide who will handle relocation among the different locations. Will relocation be handled through headquarters or the local offices? If it’s decided that local offices will handle relocations, how will they be managed? It will be important to set rules and ensure that new offices are following protocol.

Map out the supplier network. First, you will need to decide if headquarters will handle supplier relationships or if the local offices will build and manage their own network. If you will be working with a third-party relocation company, will they handle all of the moves or will you divvy up the program among several companies? If you need to go to RFP for a new third-party provider, you should do so before the merger is finalized. This will ensure that technology and payroll systems are integrated in time for any resulting relocations.

Invest in cultural training. When merging companies from different countries, it is important to invest in cultural training for both the transferees and the HR teams that will be working together. For example, a few years ago we worked with a Swiss-German company that acquired a Chinese company. Germans are very meticulous and rule oriented. The Chinese, however, are not as stringent. They often strayed from protocol and reverted back to traditional practices, such as paying suppliers under the table. This practice was very difficult for the Swiss-Germans to understand, so we arranged for cultural training so they could better understand why their Chinese partners participated in this practice and how they could best communicate that it needed to stop. While this didn’t change the rules, it did diffuse some frustration. We accompanied corporate HR to China to re-establish and explain the rules and then followed up frequently to ensure everyone is following the protocols set in place.

Define consequences for enforcement. When you are integrating relocation among a variety of locations new and old, structure is critical. Defining relocation program management parameters and policies is only one half of the equation. Enforcement is the other half. Decide on consequences for failure to comply and communicate them clearly in person and in writing to all parties involved in the relocation process. Be sure to follow through if needed. No one likes to play a cop, but a failed relocation is expensive and valuable talent is very hard to hold on to during a merger.  It’s simply not worth it to risk losing anyone because of internal compliance issues.

Have you managed relocation through a merger and acquisition? Please share your tips below.