Buying an SME, and afterwards?

If you have just acquired an SME, you are probably looking for new synergies to boost the efficiency of the created structure. Here are a few tips for inventing useful procedures.

Acquire an SME, yes, but then what?

An executive pursuing a business acquisition aims to create an entity that is greater in value, resources, and capabilities than the sum of the two individual companies. However, acquiring an SME (Small to Medium-sized Enterprise) is not the final goal. The transaction itself is not the sole factor in success. It’s critical to identify points of convergence and opportunities for synergies to ensure the acquisition’s success.

This approach aims to mitigate, or at least minimize, the most critical challenges encountered during the transition period: managing human resources, securing employee buy-in to the process, and preparing them for change.

Acquiring an SME: The Critical Role of HR

When you acquire an SME, or any company for that matter, you’re integrating an entire workforce, complete with its own work methods and culture, into your team. Understanding these methods and culture, and assessing their compatibility with your own, is where Human Resources play a crucial role.

1. Retaining Key Talent

Post-acquisition, it’s not uncommon for employees from the acquired entity to contemplate resignation, driven by fear or uncertainty about the future. Therefore, it’s essential to identify and retain individuals who are instrumental to the success of the operation. But how can this be achieved?

• Rewarding employees for their efforts
• Building trust through transparent communication
• Maintaining open and formal communication channels
• Providing a specific retention arrangement

2. Review salaries

The compensation of the different elements is a key issue in retaining talent within the company. A thorough analysis of the compensation policies of both companies should be conducted. You can then define a model that is applicable to employees of both companies.

3. Imagining performance evaluation

After the decision to acquire an SME, it is important to ensure that employees continue to perform their duties throughout the transition and to regularly evaluate their performance. An appropriate performance management strategy should be developed.

Read also: Planning the transfer of a business

Change management

Before, during or after the acquisition, some employees may oppose the changes brought about by the operation. Uncertainty about what is new is a source of anxiety that needs to be addressed with closer people management. The effort must come from above and the prospect of future benefits must be clearly stated. At each stage of the transition, strategic information that is useful for the success of the operation must be shared.

1. Integration of corporate cultures

The integration of the SME’s culture into the new structure is the key to the success of a merger and acquisition. How to implement it?

• By communicating early and often
• By examining cultural differences
• By developing a cultural integration plan
• By analyzing the positive and negative changes for all stakeholders

2. Transparent communication

While interpersonal communication is valuable, formal communication channels must be maintained at all costs to include everyone. Proactive and transparent follow-up helps to create a climate of trust and plays a decisive role in staff motivation.
Are you planning to acquire an SME? Contact the Actoria experts who will accompany you through all the steps of your takeover.