m&a human capital insights : fti consulting
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About FTI Consulting FTI Consulting is an independent global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. FTI Consulting professionals, located in all major business centers throughout the world, work closely with clients to anticipate, illuminate and overcome complex business challenges and opportunities.
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1Micellaneous factors include: headcount, budget, bandwidth, accountability, process, people strategy, etc.
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Improving Change Management practices was cited as the biggest opportunity during HR M&A integration
Survey MethodologyFTI Consulting conducted an informal and online survey in 2016. Audience/participants (~70 individuals), included leaders from corporate development, M&A integration and functional specialists in the technology industry
Nitin Kumar Senior Managing Director +1 408 915 8627 [email protected]
TECHNOLOGY SECTOR
Results are based on surveying several business, M&A integration, corporatedevelopment and HR functional leaders in the technology sector.
66%of companies reported that they did not have a specific approach to assessing and integrating culture in a deal. Reasons included:
Lack of leadership support to invest enough in culture during M&A, light culture due diligence often glossing over integration risks and lack of internal resources to assess or manage culture
HR leaders felt that their ability to influence deal issues was lowest during target screening and highest duringintegration planning
34%
26%
24%
13%3%
Culture alignment Employee engagement
Employee retention Executive Retention
Other
38% respondents were
involved in an acqui-hiretransaction over the last 12 months
77% did not believe that NPV of
acqui-hire > organic hiring
61% of HR Executives would not
execute acqui-hire transactions again
33%42%
of companies’ critical employees separated faster than non-critical employees soon after M&A
said retention bonuses were not effective in Silicon Valley
39% 25% 24% 12%
Improve Change Management
Practices
Leadership Selection
Enhanced HR due diligence
rigor
Misc. Factors
24%46%
57%75%
51%10%
32% 17% 2%16%
66%
22% 26% 24%33%
0%
20%
40%
60%
80%
100%
120%
TargetScreening
PurchaseAgreement
Synergies IntegrationPlanning
IntegrationExecution
Always Never Rarely
Deal Continuum
Ability to align cultures was cited as the highest measure of success for HR M&A
Critical employee retention appears to be the biggest challenge during HR M&A integration
Acqui-hire deals did not result in the expected transaction value
Infl
uen
ce o
f H
R
81%felt de-risking pensions was the biggest risk area during due diligence while executive compensation was rated lowest