Canadian HR Reporter

CANADIAN HR REPORTER November 2, 2015 12 HR LEADERS Angelica Marshall human resources director at Impark in Vancouver The parking management provider has about 2,500 employees in Canada F or Angelica Marshall, HR director at Impark in Vancouver, HR is defi nitely a key stakeholder when it comes to mergers and acquisitions (M&As). "We start with due diligence all the way through the integration," she says. Early in the process, people can get caught up in the fi nances but there's a place for HR there, says Marshall. "Part of that is ensuring that C-level employees — from our top-level employees and the executive team — that HR is sitting at table as being part of that. I think also being able to demonstrate that we can provide costing to support whether that number that the owner has given us make sense. I think that that's a key way for us to start to get in the door because initially the people and the culture and all that stuff is important but the key thing is ensuring: Does that number make sense? And HR can defi nitely play a part in that," she says. HR's role in due diligence includes reviewing collec- tive agreements and looking at the terms and condi- tions and future costs that may be coming out of that. It's also about reviewing benefi ts. "One of the things that we really look at is what are their benefi ts programs, how can we align them to ours and what (are) the costs going forward?" says Marshall. Due diligence also is about the payroll systems, in terms of how a company is paying people, whether it's in compliance, whether there are any large litigation claims or trend factors that have happened for claims over the past fi ve years, and what is that pro- jected cost going forward, says Marshall. It's also about looking at key employees and determining if that should be part of the pur- chase agreement. " at could mean listing them, what their roles are, how do we retain them, because there's a lot of intellectual capital in those individuals," she says. Cultural compatibility is also a big part of the process. So as part of integration, step one is doing orientation with staff to walk them through the cultural values, she says. " ey provide support during transition and we need to them to be onboard so that the staff can migrate over to what our culture is but not have it be a humongous shift for them. I think that puts strain on employees and causes us to have a lot unnecessary turnover so it is a factor when we're looking at acquisitions." It's important for HR and senior leaders to be as transparent as possible with all the items they've predetermined are going to happen, says Marshall. "HR can also give support to the senior leader that's going to be speaking because it's very easy to get caught up in the fi nances and running 100 miles ahead as to what the integration's going to look like... but there's a lot of pieces to get there. And the number one thing is to make sure that the staff feel excited and confi dent and are embracing that change of being purchased because that's a hard place to be," she says. "HR plays a key role in making sure that that fi rst 90 days is calm and that we've don't have a lot of attrition. Because it's easy to get that turnover, people get fearful." HR can also help when it comes to retention of key leaders during an M&A, and that includes documentation, coming in with a letter of continued employment letting them know next steps, says Marshall. "(It's about) transparency, taking away that anxious feeling from them, that 'I'm go- ing to lose my job, all this stuff 's going to happen.' Letting them know if there's going to be title change or reporting change on day one; being able to provide a document to them as opposed to just a conversation if at all possible, I think, puts people at ease." Retention bonuses can be very useful tools in these types of situations — as does giving people your time, she says. " e fi rst couple of days that you're there on the ground tends to be swallowed up in a lot of those types of meetings, but ensuring that we have enough time and we make the time, the person doesn't feel rushed so they can really come back and ask questions if they have them — it just settles the water a little bit." But it's important the original employees and leaders aren't forgotten, says Marshall. "It's HR's responsibility to also watch those key leaders and make sure that they're getting the support they need as well because it's very easy in these types of situa- tions… to see that burnout in that management group, so I think HR needs to also keep a pulse on their own employees, not just the purchasing employees... It's very easy to get stuck in that acquisition mode and forget that there's still people doing their regular jobs on top of it." Stephanie Hollingshead vice-president of HR at Sierra Systems The 700-employee IT ser vices and management consulting rm is based in Vancouver U ntil a deal is actually being implemented, HR's role has been seen as fairly peripheral, according to Stephanie Hollingshead, vice-president of HR at Sierra Systems in Vancouver. "It has really been seen as a fi nance and legal activity, looking at the valuation, the ne- gotiation of price and… HR is brought in, but it's often almost a done deal at that point." at should change, she says, especially when considering cultural compatibility. " e company's competitive advantage is really what shapes its culture and so you want to look at the two cultures and if you're going to merge two very non-compatible cultures through an M&A, you're really risking losing that competitive advantage." At a previous employer, Hollingshead says she watched one company purchase a bigger competitor and the two couldn't have had more opposing cultures. " e merger was a disaster, the company lost money for several years after that." By getting involved earlier in the process, an HR person can look more at those culture pieces, and ask good questions around it, including the ROI — not just from a fi nance perspective but "What will we need from the acquired people or our own people even to get the desired ROI that we're looking for?" she says, such as skills and knowledge retention or development. To ensure HR is involved earlier on in the process, it's about asking really good ques- tions of the CEO to convince him to bring HR into the discussion, says Hollingshead. "Framing them around liabilities, risks, costs — those things exist from a people perspective as well, we've got employment contracts, severance liabilities, any golden handcuff s for key people. Just asking key questions would help get that foot in the door." HR's involvement in the whole process boils down to the people-related assets and liabilities. ere are the more common ones such as employment contracts, policies, lawsuits, disability claims and human rights claims, along with compensation and benefi ts costs, potential future cost increases, and assets such as retention rates, key people, knowledge and competitive advantage, says Hollingshead. HR defi nitely could provide more in the area of fi nance, she says. "If HR can insert themselves and speak in the language of business, talking about metrics and returns and assets and liabilities, and speaking in that manner, I think they have a better shot of getting involved upfront and looking at some of those pieces that have historically (been) and continue to be tougher to measure." Pushing for success metrics is one way HR could better infl uence the eff ectiveness of senior leaders, she says. "And even just metrics in general — I'm not sure I've seen great metrics on an ac- quisition anyway… really a holistic view of them, including retention/engagement of key people or key teams might be a success metric that's important." Another infl uential tool is to use stories to illustrate the importance of issues such as retention of key people and getting them onboard quickly, says Hollingshead. "It's those pieces that make profi tability. It's not the widgets that you're buying, it's the people that will change so I think just using stories to illustrate the importance of that upfront with the C-suite would get their attention." HR also plays an important role when it comes to supporting managers, she says. "Merging fi nances, merging products, that's the easy part. I think merging people is where things get messy and that's where things fail because of human behaviour. So I think a strong HR leader understands the human element and can help guide the managers, help guide the se- nior leaders in the area, through the integration, re- ally look at the cultural integration, thinking beyond day one, thinking in the fi rst six months to a year. "Without that oversight and view on it, those things often don't get purposefully looked at, they just occur and I've seen examples of it really going sideways." It's so important for HR to support the ac- quired employee teams, says Hollingshead. "It's a new environment for them (so it's about) really helping to provide them with information, being a bit of an olive branch for them or a safe place to ask questions, and help- ing them connect with peers in the new organi- zation, helping them fi gure out where to go to build relationships and navigate those infor- mal rules of engagement. I think that would help bring people onboard faster — they could see the positive, they can become ef- fective as soon as possible. I'm not sure we do a great job of that."

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