Guest Opinion: Nick Foster, vice president of human resources, Oracle UK, ROI, SA. Topic: Mergers and the benefits package

The merger between Boots and Alliance UniChem, as well as NTL鈥檚 long-awaited takeover of Telewest, are a sure sign that mergers and acquisitions (M&A) are back on the business agenda. Takeovers can spell good news for customers, board directors and shareholders, but the reality of an M&A is, for many companies, very different from the financial sense displayed on the balance sheet. All too often, the cultural difficulties of combining two companies can pose an obstacle to the success of the merger. The challenge of amalgamating two different organisations is acerbated by the fact that HR directors are rarely involved early on in the M&A process. Most of the initial focus is on customer retention, product strategies and tax structures. Of course these discussions are absolutely vital to ensuring the future success of the combined organisation, but to postpone the planning required for successful workforce integration is to invite failure. Integrating an acquired company within the confines of legislation such as the Transfer of Undertaking (Protection of Employment) is always going to be a challenge, even for the most experienced HR director. Ensuring benefits packages and conditions of employment are of equal value is a time-consuming and complex activity. Many firms opt for an ongoing process of aligning benefits from the acquired firm to the acquiring firm鈥檚 scheme, but this can go on for years. This grandfathering approach is just about manageable – provided resources can be allocated on an ongoing basis – when a company makes a one-off and fairly small acquisition. But in more acquisitive sectors, such as IT and retail, or business process outsourcing, this is not an option. At the other extreme, there is the option of buying out employees, where a company compensates newly-acquired staff for the value of any lost benefits. This is extremely difficult to maintain across multiple payroll systems and multiple locations. And even when a benefit is bought out, employees from the acquired company still regret losing that perk, which does not bode well for staff retention and morale for the combined entity moving forward. The administrative fallout following a merger or acquisition is a burden that most overstretched HR departments could do without. A flexible benefits scheme can alleviate much of that burden, as well as being a useful tool in easing the cultural integration of two companies. Flex offers staff from the acquired company greater individual choice. Take income protection, for example. Employees used to a particularly generous scheme need not forgo the cover that they have enjoyed if the acquiring company operates a flexible benefits scheme. With flex, employees can select the level of income protection that most suits them, or they can choose another benefit in its place. It is important that existing staff do not feel that they are treated less well than incoming employees. And a company car scheme is one of the most blatant manifestations of an unequal benefits package. With flexible benefits schemes, employees make personal decisions: they choose a vehicle that is right for them, whether it happens to be a sports car or an estate. That way, no eyebrows are raised when two employees at the same level drive very different cars. Flex plans are also a useful tool when acquiring a particularly valued employee. Extra benefit points can be awarded so that the individual can purchase a benefit they have been accustomed to, helping eliminate barriers to joining the company. By awarding points rather than an increase in base salary, firms avoid the pitfalls of out-of-line salaries and accusations of preferential treatment. It is well documented that a firm鈥檚 workforce is its most valuable asset. During a merger, this is doubly so. It may not always be possible to win the hearts and minds of all employees, but flexible benefits schemes certainly allow employers to discreetly and privately make allowances to accommodate staff. The right benefits structure is a powerful tool in helping to ease the M&A process l