HR Due Diligence
The interaction between individual personalities in tight-knit management teams often takes on a life of its own. The Management Team Audit is designed to understand these dynamics and to generate essential data for improved teamwork and for ensuring the optimal development of personnel in the management team.
If companies are planning a merger or change in ownership, the following questions will appear on the agenda:
- What is the value of the new company?
- Which synergies or economies of scale can be exploited?
- How should the tangible and intangible assets be valued?
This is the mandatory part. The free section is about focusing on soft
factors. Studies on the failure of M&A transactions consistently conclude
that intensive due diligence tests in the “strategic,” “commercial,”
“financial,” “tax,” “legal” etc. fields were performed but “cultural,”
“organizational” or even “human” due diligence checks are handled superficially
This can turn a good opportunity for a M&A transaction into an expensive misadventure, for example if the management is not up to par, the culture cannot be integrated, structures are ineffective, important high performers have left the company, there is an unfavorable age structure, or if the bonus and pension commitments bear high risks.
The Human Resources area plays a central role in M&As. The expected personnel and organizational potentials and risks need to be assessed in an intensive HR due diligence review. The following issues should be taken into account:
Is the value system compatible?
|Does the corporate culture fit the takeover company?|
Is the management team "ready" for new goals?
|A takeover usually means
new strategies, goals and tasks.
Can management meet the changed requirements?
Where are the unknown risks?
|Where are the behavioral risks that could damage the integration process?|
Who has which development profile?
|Are there leadership potentials that could be unearthed? What needs to be done to master the challenges of the future?|
What are the risks in the existing HR systems?
What are the target control tools in the organization? How appropriate are the compensation systems? How is employee potential developed?
Steinbach & Partner supports companies in the M&A phases through “HR Due Diligence Reviews” and “HR Post Merger Integration.” Prior to the closing, we perform management and HR system audits, while in the integration phase we evaluate the leadership qualities of managers (360° method) and point out areas that need development.
Phone +49 (0)711 24 84 78-0