Even if the new owner wants to keep everyone in the HR function, turnover still may be high because of a loss of autonomy after the takeover. A University of Denver Graduate School of Business study of acquisitions found that a majority of the CEOs of the companies involved had left within a few years. In hostile takeovers, the turnover was close to 100%. "We found a significant relationship between turnover among CEOs and the dissatisfaction that CEOs expressed in the amount of autonomy they retained after the takeover," says Kim Stewart, assistant professor of management at the university, who ran the study. Other executives are likely to experience this kind of dissatisfaction, although perhaps not to the same degree as is the case among CEOs. The top HR person in the acquired organization may find him- or herself demoted to a function run by the VP of HR for the acquiring company.
What can you do to protect your job? Just as protecting the company from takeovers begins before an unfriendly suitor appears on the horizon, so too does the HR professional's defense of his or her job.
Jim Wright, corporate director of employee and labor relations for Atlanta-based Georgia-Pacific, says, "In any merger, staff functions are particularly vulnerable. If there's complete duplication, some people will be surplused. Those people who remain will be the best. HR people should maintain state-of-the-art skills, so that as selections are made, they'll be fully qualified to participate."
Be aware that the buying company may not have much of a game plan or know what it should be doing. The acquired company may know more intrinsically about making the transition and may have more technical expertise, according to Mark Alch, senior VP for New York City-based Drake Beam Morin Inc. and managing director for the organization's Orange County and Inland Empire operations in California. The acquiring company usually won't make changes in the first year. Then preference will be given to people who fit in with the new organization's culture. "People who are neither resilient nor flexible are expendable," Alch explains.
A generalist is more likely to survive the takeover than someone who has delegated completely the responsibility for most of the functions of human resources. "If you've let someone else run the services of human resources, you don't bring much to the table," says Sewell.
Human resources people who have experience in another area-such as operations, sales or marketing-that can be useful in other roles, are more likely to have a place in the new organization, according to Alch.
HR may be needed to provide team-building for the new organization. See what you can do to aid the merger effort, even if it's only temporary.
"Demonstrate a positive, professional approach," says Irene Sinteff, HR administrator for Volex Interconnect in West Bridgewater, Massachusetts, who operated the entire human resources function for Component Manufacturing Service before its sale to Volex. "Look for unanswered needs and begin addressing them. Keep focused and be organized to handle the additional workload that comes with integrating different systems and procedures," she recommends.
The VP of HR may have been the contact person for the acquisition team. If dealings between human resources and the new owner have been cordial, the acquiring company may be more inclined to keep this person with the organization.
The hopes of finding a place in the new organization may be good for most HR people who work to ensure the well-being of the company. In some cases, they actually may improve after the takeover. "My tenure with Volex appears to be better than it was with CMS because of the better future for the organization," Sinteff says.
The reporting lines in HR haven't been defined clearly yet, but as of now, the HR manager from the first company that the Volex Group purchased in the U.S. appears to be in a better position to head the HR function, according to Sinteff. "He has had six-plus years of history with the CEO of Volex U.S.A. and has the CEO's respect," she says. The human resources manager is giving Sinteff considerable latitude, knowing her background and energy level. "I'm anticipating that the growth of Volex will mean positive things for both our careers," she says.
Personnel Journal, June 1993, Vol. 72, No. 6, p. 91.