Role of Human Resources in demerger

Introduction: While there are many definitions for demerger, let me put it in a simple manner.

Demerger: Demerger is the converse of merger and acquisition. The act of splitting off a part of an existing company to become a new company, which operates completely separate from the original company. A demerger can take place through a spin out by distributed or transferring the shares in a subsidiary holding the business to company shareholders carrying out the demerger.

Reasons for demerger: Every demerger has its own unique reasons based on the organization goals. Here is a few of them:

• Strategy to enable others to exploit opportunity effectively to optimise returns when the parent company is unable to do so;
• To make financial and managerial resources available for developing other more profitable opportunities;
• Selling of unwanted or surplus or unconnected parts in the business as a restructuring strategy to get rid of sick part of the company.

Stages of demerger:

1. Pre-demerger: Based on strategy, the management appoints a team of employees for developing and execution of the plan.
2. Due diligence: Due diligence is done on possible reorganization, compliance to be followed, status of accounts receivables, payables and etc.
3. Dis-integration: This is the most crucial part of entire demerger process and includes identifying key talent, budgeting for various systems, filing of demerger in court of law, applying for new licenses, registration of demerged company under various compliances, communication to employees.
4. Post demerger: This is the final stage and an important and delicate stage in a demerger. This is called as a delicate stage as the newly appointed or current management has to meet the expectations of employees, market share holders, manage profits and growth.

HR Role in demerger: The role of HR in demerger is more or less the same in merger & acquisition but it is very delicate as the threat of demerger is always loss of best talent. HR plays a key role by helping people on

• Coping up with change and culture
• Formulate the various policies, procedures and systems in place
• Design organizational hierarchy structure
• Provide assurance on Job security
• Registration and Compliance of local labour laws

 Best practices to be followed by HR during and after demerger:

• Identify leaders from the parent company who would lead the demerged company for effective implementation and communication of the same to employees.
• Identify key talent and skills which are required for demerged company.
• Redesign or remap the hierarchy structure.
• Manage the change of culture.
• Organize employee engagement activities.
• Explain the new set of policies and procedures.
• Educate managers and conduct employee counseling.

Role of Human Resources in Merger & Acquisition

While there are many definitions for merger, acquisition, let me put it in a simple manner. Merger and acquisitions are often made as part of a company’s growth strategy.

Merger: Merger refers to combining of two companies where one new company will continue to exist. Merger is combining of two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock. It can also be defined as an arrangement whereby the assets of two or more companies become vested in or under the control of one company.

Acquisition: Acquisition refers to buying of assets of one company from another company. A action in which a company buys most, if not all, of the target company's ownership stakes in order to assume control of the target firm. Acquisition is purchase by one company of controlling interest in the share capital of an existing company. 

Reasons for Mergers & Acquisition: Every merger and acquisition has its own unique reasons based on the organization goals. Here is a few of them:

• Synergy
• Acquisition of technology, assets or talent
• Increasing capabilities & sharing expertise
• Increased market share
• Diversification of products and services

Stages of Merger & Acquisition:

• Pre-merger & acquisition: Based on growth strategy, the acquirer searches for an appropriate partner to assess potential targets and develops a plan for execution.
• Due diligence: Due diligence refers to the investigation made by a buyer to gather all relevant facts and information that can influence decision to enter into a transaction or not. The acquirer does thorough research of the credentials of the company, its market valuation, status of accounts receivables & payables etc.
• Integration: The acquirer creates a comprehensive plan for integrating the two companies. This happens either at the time of or completion of due diligence.
• Post-merger & acquisition: This is the final stage and most crucial part of a merger & acquisition. It can take months or sometimes even years based on the organization size, geographical locations and the complexity in the agreement.

HR Role in Merger & Acquisition: Success of merger and acquisitions depends on the people who drive the business, their ability to drive, lead, and formulate strategy, execution and implementation. It is very important to involve HR professionals in merger & acquisition as it involves people and has an impact on key people issues. HR professionals play an active role in the change process by offering their interventions to help ensure a successful merger and acquisition.

HR plays a vital role in   

• Employees coping up with change and culture
• Organizational hierarchy structure
• Maintaining the productivity by placing of right people at right place
• Alignment of compensation, benefits and welfare schemes
• Job security
• Relocation
• Compliance of local labour laws
• Employee communication
• Taking care of personal records

 Best practices to be followed by HR during and after merger & acquisition:

• Identify leaders from both the companies for effective implementation, transition and communication of the same to employees.
• Train managers on the nature of change.
• Explain new roles to the people.
• Orientation programs on policies and procedures.
• Orientation programs on performance management, compensation, benefits and welfare schemes.
• Identify the skills of people and mapping them appropriately.
• Town halls & Team building activities.

The Art and Science of Interviewing

Job interview is the most important aspect of finding the right employee for organization. The objective or goal of hiring is not simply employing a body. Interviewing is both an Art and Science. Art and Science are two vital aspects of a successful interviewing. The Science includes the work you have to do before beginning the interviewing and the art is how you conduct the interview.

The Science of Interviewing:

• Prepare for the interview: Review the job description. Make a note of the skills, qualifications that are required for the position. Understand the scope of and growth of the position in terms of learning, hierarchical. Review the resume of the applicant you are interviewing.
• Determine the interview process: List down the levels of interview, Determine if the interview is conducted by an individual or a panel of interviewers. Identify the interviewers. Trace out the best interviewers in your organization for each position. Determine the goals of an interview – is this a collective decision or which interviewer will make the decision. How many applicants are to be interviewed and shortlisted for each position, meaning you would shortlist the first applicant if he/she is a good fit or you would wait till you shortlist at least 3 or more applicants.
• List the organization’s culture, characteristics: Take a note on the company culture, growth of the company, the learning and growth opportunities provided by the company, benefits and perks provided by the company (technical interviewers can skip this section and pass this on to a Human resource professionals in the organization). Take a note at the qualities of the most successful people in your organization. Remember technical skills can be taught but not the attitude.
• Develop questions that are relevant to the position: Use the interview to determine whether the applicant possesses the skills, experience and qualifications required for the job. Prepare the questions (open-ended questions) which require the applicant to provide information and describe their experiences. Based on their responses, you can determine whether their skills and experience match the job position offered and also if he/she is a right fit for the organization.

 The Art of Interviewing: Remember YOU are in a position of branding the organization and YOU would want to be in a position of determining if this is the right applicant. The rules of an effective interviewing are as below:

• Schedule and venue of the interview: Ensure the time and venue of the interview is communicated to the applicant in prior. Let the applicant know the duration of the interview. This would allow applicant to plan accordingly. Also, it is suggested that YOU are also on time and ensure the venue of the interview is clean and proper air flow is available.
• Build trust and rapport with the applicant: Building trust is about genuinely caring for the individual, treating them with respect and demonstrating that they are important. Greet them and show the applicant the place of interview by yourself. Introduce yourself and make them feel comfortable at the interview.
• Effective Listening and allow a positive conversation: Listening is very important aspect in an interview. This would encourage the applicant to express his thoughts, experience. The main trait of a positive conversation is to listen carefully and ask thoughtful questions. Don’t be interrogative. A two –way conversational interviews put the applicants at ease and assist you in learning the most about them.
• Take notes:  Always take notes of important experiences, achievements explained by the applicant. Inform prior to the applicant that “I would be taking notes and do not get distracted”. Taking notes will help in summarizing your observations and compare with the other interviewers or at times comparing the skills and experience of any other potential applicant(s).
• Ensure to provide an opportunity to ask questions: Interview is an opportunity for not only you but also the applicant to learn more about the company, scope of the job, work environment, your expectations and etc. The type of questions that an applicant asks will give the hint of the type of the persona they are.
• Provide feedback and do not make them wait: Once the interview is done, take time to review and assess the fitment of the applicant. It does not matter, even if it takes 30 minutes. But ensure you provide the feedback to the applicant even if it is negative. Be prepared with the reasons for not selecting the applicant.
• Ask references: Get references from the applicant and call them to know more about the applicant.
• Avoid judgement for the first 20 - 30 minutes: Most of the time, we tend to decide in 10 - 15 minutes. Avoid your judgment for at least for first 30 minutes. This would give enough time for YOU to gather information about the applicant’s skills, attitude, experience, qualifications, responsibilities handled and etc. 

Interview Etiquette

Acing an interview requires a combination of preparation and excellent behavioral skills. Remember first impression always leaves a best impression.

Interview can be classified as three stages:

1. Pre-interview
2. Interview
3. Post – interview

Dos of an interview in each stage:

1. Pre-interview:

• Research about the organization: Do a research about the organization in terms of products, services, size, geographical locations and etc.
• Read the job description: Read the job description given by the recruiter. Ask questions to the recruiter for any clarifications. Prepare a set of questions to be asked in the interview such as scope of the job, growth.
• Resume: Prepare a well presented resume. Carry at least 2 or 3 copies in a file holder.
• Interview details: Get the address of the interview and if possible visit the venue one day prior to the interview. This would help is getting acquainted with the parking lot so that one need not waste time in parking his/her own bike or car. Also, get the interviewer name and designation. Do some research to know more details of the interviewer in the social/ professional media sites. This would help in knowing the seniority of the interviewer and also the seriousness of the company to fill the position. It is always suggested to understand the levels/process of interview. This will help in anticipating the time required to complete the interview.
• Time Punctuality: Be at least 20 – 30 minutes before the interview time.
• Cell phone in silence: Ensure your cell phone is in silent mode or it is better to switch off.

2a. Interview:

• Dress code: Most of the companies follow a dress code and prefer a formal dress code. Even though some companies do not have a formal dress code, it is better you are in a formal dress code.
• Firm Handshake: Wait for your interviewer to initiate a handshake and offer to be seated. Ensure your grip is firm but not crushing.
• Body Language & eye contact:  Body language is very important in an interview. Do not slouch or lean or cross your legs. Sit and stand up straight. Maintain an eye contact with your interviewer(s). Do not appear too nervous or too confident. If you are too nervous they will think that you are not confident. At the same time, if you are too confident they can think you are over confident or some time not a good fit for the team.
• Smile and being polite: Always have a smile in your face. This shows you are approachable. Be polite and if necessary, use the words “please”, “thank you”.
• Conversation, listening and questioning: Although it is important to be in conversations, you should not have a one-sided conversation. The main trait of a good conversation is to listen carefully and ask thoughtful questions.
• Money discussion: Although money is important. Wait until the end of the interview and discuss about the compensation, perks, benefits and etc.

2b. Interview at Dinner/Lunch: At times, interviews can be conducted over a meal (especially for mid/senior level positions). While you follow all the above mentioned, a few more to be followed to leave a best impression in the interview.

• Do not drink: Refuse drinking politely even if your interviewer offers you a drink.
• Dining Etiquette: Use all the table manners. Stick to food which can be eaten with fork, spoon and knife. Take only small bites of food and never talk with your mouth full.
• Selection of menu: Stay away from the expensive food items in the menu irrespective of how delicious it may sound.
• Bill payment: You are not obligated to pay as you are invited for the dinner/lunch. Offering payment would be inappropriate.

3. Post – Interview:

• Thank you note: Write a thank you note. It demonstrates professionalism and gives you an opportunity to restate your interest in the job and company. A preferred way is to a hand written. However, e-mail is also acceptable. Ensure to get the correct e-mail Id’s of the interviewers.

Don’ts of an interview:

• Dress code: Wearing jeans, bell bottom pants, t-shirts and a rearing type of dress is not suggested.
• Showing up late: Never be late to the interview. It shows ou are not capable of planning.
• Not reading the job description or not researched the company: Reading the job description given by the recruiter will help you to assess your skills and map to the job. Research about the company will help you to assess your fitment to the company in terms of culture, company’s growth, vision, mission, values and etc.
• Lying & complaining: Avoid lying or flattering about you, your previous achievements. It is always better to be honest in the interview. Avoid complaining about the people or any other. This might switch off the interviewer.
• Slating your current company or boss: Avoid slating your boss in spite of you are badly treated. This might make you look bad. Interviewers would want to listen to you and thinking about how it would be working with you.
• Body Language: Body language plays a vital role in an interview. Avoid keeping your legs crossed. Do not lean and avoid nail biting, hair twirling. Crossed legs indicate that you are not comfortable and not approachable.     

While the above are the etiquette to be followed by interviewee or applicant attending interview, there are etiquette to be followed by interviewers which can leave a lasting expression on interviewing. My next blog would be on etiquette to be followed by interviewers titled "The art and science of interviewing".