5 Due Diligence Issues for Your Credit Union Merger

5 HR Due Diligence Issues For Your Credit Union Merger

No doubt you have examined the employee benefits of your credit union merger; noting the new organization will offer members better benefits and more opportunities. As you plan and work out the details, there are due diligence actions that must be considered by your HR (human resources) department which will ensure you are prepared for the merger. The initial HR due diligence task requires information concerning whether your state has specific employee prerequisites for credit union mergers. Beyond that, the following five areas should be examined for proper due diligence.

1. Culture: What does the employee culture look like post-merger? Try to be objective about the similarities and differences between the two organizations. Does either have a mission statement? Is it something employees believe in or just something they read in orientation? Policies should be examined by both organizations to decide what will be kept and what will be changed for the benefit of both parties. Having a definition of the post-merger culture along with a mission statement can help you rally the employees and get them excited about the merger.

2. Organizational structure: Employee concern about the structure of the new organization may be a cause for concern. Staff at all levels of the existing organization want to know where their department and their position fit within the new organization. Contractual arrangements should be considered to determine how they will be addressed when the merger occurs. By defining a post-merger organizational structure, both you and your staff can see the big picture.You should also determine if employment can be guaranteed, for how long, and what severance if any can be offered for those who choose to leave and those who are asked to leave. Not everyone may on board for the merger, but addressing everyone’s expectations may help you gain support and loyalty as you move forward.

3. Compensation: As you create the new organizational structure, you will need to plan for post-merger compensation. Evaluating employee salaries and determining how they will or will not change helps with your merged credit union income statement. You also need to consider compensation changes and bonuses related to the merger, as well as future bonuses. Create a basic plan that can be shared with employees.

4. Benefits: Examine current benefits between both organizations. Look at the cost and methods of consolidating benefits’ vendors, and consider finding new vendors for a post-merger plan. Employees will be concerned about their benefits package. Have a plan that is easily understood that highlights the pros and cons of previous and new benefits.

5. Communication plan: Early communication and leadership meetings with management from both credit unions will help acclimatize everyone to the new environment. By creating a communication plan early, you create a road map that keeps employees informed from the beginning, through the actual merger, and into the post-merger.

Corporate culture, compensation, and benefits are the primary reason people value their place of employment. During a merger it is important to keep existing employees informed to the extent it affects their positions as the due diligence is performed.

The HR due diligence process enables you to answer employees’ questions once the merger announcement is made. It is essential employees be proponents of the merger as they will be in the front line talking with members to gain information. By keeping them in the loop, you will have a staff that is optimistic where the merger is concerned and that will in turn encourage members to vote in favor of it. Successful credit union mergers as a general rule benefit members with compensation, benefits, and opportunities.