Staff engagement, cultural fit top HR factors in India: M&A study
3 min read . Updated: 11 Jun 2013, 12:26 AM IST
PremiumIndian firms differ from their global counterparts who look at talent retention to measure deal success
Mumbai: Employee engagement and cultural alignment are the top human resource-related factors that Indian companies use to measure whether the purpose of an acquisition has been achieved, according to a study by consulting firm Aon Hewitt.
For KEC International Ltd, a Harsh Goenka-led RPG Enterprises company, people of the target company and their knowledge of engineering design was the main attraction when it acquired a US-based tower firm, SAE Towers, in 2010. As a result, employee engagement became imperative; and since the company felt that employee engagement should start right at the top, it started by clarifying that it will not disturb the leadership structure of the acquired company.
“It was a US company serving customers in the US. We thought that we shouldn’t make it into an Indian company that serves US clients. We did our due diligence and found the existing management of SAE were the right people for the job. So we reposed faith in them," Yugesh Goutam, executive director, human resources—infrastructure sector, RPG Enterprises, said in an interview.
Language and culture is another factor that can act as a bridge or a barrier when it comes to two companies in different parts of the globe joining forces, as Vineet Sahni, former director (he quit the company in May after Mint had spoken to him) at Varroc Engineering Pvt. Ltd—one of India’s top three auto component makers that acquired US-based Visteon Corp.’s lighting systems business in 2012—found out.
Like KEC, Varroc also held an open house to address the concerns of the company it acquired and to make them feel at home. One of Visteon’s employees observed that the Indian management of Varroc would sometimes converse among themselves in Hindi and they didn’t like that.
