AOL and Time Warner. Heinz and Kraft. eBay and PayPal. Google and Android.
And most recently, Adobe and Figma.
In the business world, mergers and acquisitions are a tale as old as time.
Whether it’s gaining market share, economies of scale, tax advantages, or talent acquisition, two businesses find many reasons to come together as one.
Downsides to the Upsides?
But M&A aren’t all upside.
The Time Warner and AOL merger lasted nine years before Time Warner gave up trying to integrate with AOL and spun it off again. eBay and PayPal split after 13 years.
Internally, challenges include keeping employees retained and engaged.
HR Can Help
What can HR do to increase the odds of success during a merger or acquisition?
While each M&A is different with different phases, for the sake of simplicity, we’ll boil it down to four stages:
Evaluate and Diagnose
- Research compatibilities, strengths, and weaknesses of each organization and its staff.
- Create research-based HR guidelines for the deal to move forward.
- Advise the management team on critical issues that may become deal-stoppers.
- Assess what HR can actually do, given schedule, budget, and staffing constraints.
“Having HR involved at this stage is critical to understanding challenges and issues outside the traditional legal and financial focus of due diligence – such as corporate culture mismatches that will need attention during integration,” says Amy Garden, Global Head of People at Rizing.
Plan and Enable
- Develop strategies for overcoming the identified potential roadblocks.
- Document current HR technology stacks and create a roadmap for aligning and merging them.
- Create a blueprint for the merged company, including alignment of organizational structures, job descriptions, salaries, and benefits.
- Estimate costs of retention bonuses, pension buyouts, healthcare plan migration, etc.
- Create a plan to communicate expected changes to employees.
- Evaluate business process improvement opportunities.
- Create a roadmap that includes milestones to celebrate achievements and places where activities will improve the employee experience.
- Leverage corporate HR systems to help the process move forward.
- Create awareness sessions and other training for employees and managers as part of an overarching organizational change management plan.
“Planning will ensure that opportunities to create or unlock human capital potential are identified and built into the roadmap early,” says Garden. “Executives must address several transactional matters in every integration, but an early focus on value-adding activities is critical to employees and leaders embracing further changes.”
Integrate and Manage
- Communicate the who, what, and why of the merger with employees.
- Emphasize career development opportunities brought to light by the M&A.
- Assess employee attitudes and engagement levels.
- Implement business process improvements and integration of HR technologies.
- Align HR policies, programs, and practices using selected HR systems.
- Create employees surveys to identify concerns, address gaps and enhance engagement.
“During the Integration phase of a M&A, we ensure our employees are on the same People systems where they can experience some quick wins of enhanced HRIS functionality and feel part of the broader team,” says Garden. “This allows us to combine employee data to create insights into the target organization. It also speeds up other integration activities when we have one source of truth for employee information.”
Attain and Sustain
- Advise leadership on culture, working environment, and communications.
- Course-correct internal communications based on feedback.
- Maintain ongoing change management programs.
- Develop relevant KPIs, provide and maintain HR dashboards.
- Provide reports on issues like gender pay gap to help the now-larger company remain compliant with relevant laws.
“By keeping a pulse on employee sentiment, we can adapt our communications strategy and tailor our change management activities to what our employees are telling us, rather than applying a generic change management methodology,” says Garden. “Throughout a recent acquisition, we used Qualtrics for a monthly survey to understand how our employees felt and what information they needed. Combining company cultures is one of the biggest challenges in a merger or acquisition. Without a solid listening strategy, an organization is flying blind.”
How Rizing can help during an M&A
Built on SAP Analytics Cloud and SAP Data Warehouse Cloud, Lyra is the only end-to-end analytics solution that harmonizes legacy system data with full integration to SAP SuccessFactors.
During an M&A, use Lyra to aggregate data from disparate HR systems and produce reports for the combined organization.
Rizing’s Employee Experience Insights with Qualtrics lets you listen to your employees’ experiences with SAP SuccessFactors to provide data points and analysis of how your people and your organization perform. From there, we can create an action plan to move you forward.
During a M&A, use our Qualtrics technologies to compare companies coming together and find commonalities, spot differences, and test assumptions.
Employee Technology Experience
Rizing’s Employee Technology Experience (ETX) program monitors the experiences and behavioral elements that affect progress on transformation projects, providing a view of project health with outputs that integrate with SAP Organizational Change Management (OCM).
The ETX methodology, deployed on Qualtrics, leverages SAP® ACTIVATE methodology to deploy listening points across the project lifecycle to selected audiences.
During a M&A, use our ETX program to bring alignment to disparate employee experiences.
People Analytics Maturity Assessment
Rizing’s People Analytics Maturity Assessment Tool (PAMA) measures where you are from a people, process, and technology perspective and helps you define the roadmap to analytics excellence.
During an M&A, use PAMA to measure maturity levels at each organization, find disconnects, and develop a roadmap to one unified company.
Business Transformation Services
Through business process design, change management, training, and strategic analytics, our business transformation experts are experienced at bringing clients through large transformation projects.
Want more guidance on the role of HR during a merger or acquisition? Download our free eBook, Why a people-centric strategy is key to a successful Merger or Acquisition.