The merger or acquisition (M&A) of entities is a complex project that requires strategic coordination and planning. Integration of your human capital management (HCM) function including people, processes, policies, and technology is an integral part of any M&A project. It is crucial to not let the HCM aspect of the integration get minimized as this can create significant risk to achieving a successful merger or acquisition.
It is crucial to not let the HCM aspect of the integration get minimized as this can create significant risk to achieving a successful merger or acquisition.
Key areas of focus for a successful integration with a People Focus include:
Strategic Planning
Begin by clearly identifying your goals and developing a comprehensive integration strategy to achieve them including your human capital objectives. Key Performance Indicators that align with stated goals should be identified and selected to monitor project health and progress.
Stakeholder Communication
Creating a communication plan that includes both internal and external stakeholders promotes information exchange, transparency and trust. Clear communication helps to manage expectations and allay employee concerns. Lack of clear communication can result in loss of key talent that is essential to realize the success of the project and to deliver expected ROI.
Program Management
Defining the program scope to highlight pre and post close phases as well as longer term priorities improves integration success and expectations management. Creating a project/program charter and project plan provides a roadmap for the complexities that will be navigated. Designating a cross-functional team to lead and facilitate the integration identifies resources as well as areas that require supplemental support. HCM workstreams should be part of this overall Program Plan Development to ensure that people integration priorities are considered and resources are adequately planned to deliver desired outcomes in a timely and efficient manner. Coordination with M&A Program Management promotes leveraging preferred tools allowing for better communication and KPI reporting.
Risk Management
From a program perspective there will be a host of risks to assess and mitigate to minimize disruption and maximize ROI. Risks from an HCM perspective include cultural alignment, retention of key employees, downsizing of roles, payroll functionality, technology platform compatibility, data integrity and accuracy, compliance standards, and management reporting. Merging HR technology stacks is a complex and detailed oriented process. Often, we see this as an area where outside consultants are brought in to manage the process.
Resource Allocation
Resources include financial, human, time and technology investments required to support a successful integration. Ensure that the HCM workstream portion of the project is adequately resourced and that a realistic timeline is projected.
HCM workstreams should be part of this overall Program Plan Development to ensure that people integration priorities are considered and resources are adequately planned to deliver desired outcomes in a timely and efficient manner.
Considering how your People Functions and Systems fit in with the proposed M&A in the planning stage will reduce risks and avoid costly missteps later in the integration process.
For examples of HRComputes experience in support M&A integrations, please look at this M&A case study.
Schedule a time to chat if you’d like to discuss your organization’s M&A Human Capital Manager.