More than 25 HR Leaders met in Malaysia at the offices of American Express in Kuala Lumpur last week as part of The Chapman Consulting Group 2014 Global HR Networking Series. American Express HR Director, Carolina Bogado Gomez, hosted the session, where the discussion focused on the challenges around talent retention, particularly in an M&A context. Leaders from a number of organisations were present including Alstom, AmBank, Berjaya Group, Dell, GlaxoSmithKline, IBM, Jacobs Engineering, Manulife, PWC, RHB, Shell, Towers Watson and T-Systems.

Constantly Changing Landscape

It was generally agreed that we are all operating in an increasingly volatile business landscape, where mergers and acquisitions have become commonplace. The group was unanimous that when managing this type of organisational change, the most important point is to get the buy-in of the business to involve the HR team as early as possible. It is critical to give the HR team a head start on developing and implementing an integration plan well in advance.

  • Integration

It was also agreed that integrating new employees is the most crucial HR factor in any M&A, particularly when it comes to retaining key talent from the acquired organisation. To achieve this, there must be a plan in place, which not only instils the new company’s culture, but also makes employees feel as if they are part of something successful. A merger or acquisition needs to be positioned as an indication of success, so the incoming employees feel as if they’re a part of something positive. More often than not, employees being brought into the new organisation see this in a negative light, which can result in problems. Some leaders even mentioned the use of a branding expert to help with employee ‘buy in’ when going through this type of change. Taking positive elements of the acquired company’s culture can also prove beneficial when shaping the new organisation, and it can help to engage those employees moving across.

  • Ambassadors

Identifying key stakeholders who can be your ambassadors during the change process can help influence and get the buy-in of the broader employee base. Mary Chua of Towers Watson said, “Organisations need to look at influencing the informal leaders at all levels of the organisation when a transition is taking place, not just the senior leaders. The effect that these so-called ‘influencers’ have is often underestimated. Although they do not always hold senior positions, they have the ability to sway opinion, and can be very influential.”

  • Employee Involvement

It is also important to try to involve key talent in shaping the values and culture of the newly amalgamated organisation. Companies should consider nurturing a bottom up culture and value set, rather than reinforcing a top-down culture. One HR Leader also flagged the importance of “educating the acquirer about the acquiree.”

  • The Bottom Line

HR Leaders must also be aware of the anomalies between the differing HR systems, policies, procedures, and in particular the compensation schemes, as this can prove costly. It may be necessary to evaluate the HR team responsible for managing the change process to determine whether you have the right combination of talent. Many in the room reinforced that the right mix of operational and strategic/innovative thinkers is necessary, as situations inevitably arise that require ‘thinking outside the box.’ The quicker the tricky situations can be resolved, the more money the business will save. The point was also raised that no matter how good your integration plan is, the business leaders will eventually define success by looking at the bottom line savings.

  • Gen Y talent

The session then turned to a discussion of Gen Y talent in this changing macro environment. In the current global, increasingly urbanised environment where social media is all-pervasive, the general consensus was that by offering more flexibility at work, organisations could potentially increase output and retain their ‘stars’ of the future. This flexibility may include working from home and/or allowing flexible work hours, but it should be noted that this would mean different things to different people, which takes time both to establish and to manage. It was agreed that allowing variable work hours and locations does require a high level of trust that can be abused if not overseen properly; therefore, the process needs to be handled carefully and will only suit certain groups of employees.

Conclusion

Many thanks go to everyone who attended the session, and particularly to those who presented, as well as our host, American Express. All of the HR Leaders present offered great insight into the obstacles being faced at present, and how their organisations are meeting those challenges. We look forward to reconvening at the end of the year.