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In the past year, we’ve seen Amazon acquire WholeFoods, CVS buy Aetna, and T-Mobile and Sprint announce their merger. Global M&A hit a 17 year high in the first quarter of 2018. Clearly, M&A is a critical growth strategy for many organizations—but they’re not always successful. More than half of all M&A deals ultimately fail. While the decision to acquire a new company comes from the top of the organization, HR can play an important role in ensuring the overall success of an M&A. This blog details 3 ways HR can support the business strategy and help drive value from an M&A.
1. Shorten time to value
Immediately following an M&A, a business faces pressure to quickly achieve the expected benefits. At the same time, employees are fraught with anxiety. On top of the administrative aspect of onboarding an entire company at once, HR is consumed with answering questions, easing fears and addressing uncertainties—all of which delay the value of the M&A.
The smoother the employee experience during this time, the sooner everyone can get back to productivity—and the sooner the business can realize the benefits of the M&A. HR can ensure this transition period is smooth and fast for employees (and HR staff) by:
- Providing acquired employees with frequent, consistent communication
- Building an automated onboarding process specific to the acquired employees, as it will likely differ from the process for traditional employees
- Personalizing policies and processes for the acquired population so time isn’t wasted searching for the right information
- Using analytics and insights to anticipate employees’ needs and questions
2. Reduce onboarding overhead
While an M&A leads to more profit in the long-term, there are some short-term costs that HR can directly influence and reduce, which contributes to the overall ROI of the deal (every bit helps!). Those costs include:
- Onboarding costs. Onboarding hundreds, sometimes even thousands, of employees at once requires extra headcount to create and deliver communications as well as manage the process. This is where technology can help reduce the administrative burden on HR by eliminating manual steps involved in tasks such as requesting acknowledgements, completing paperwork, account provisioning, etc.
- Turnover. After an M&A announcement, employees are hyper concerned about changes to their job responsibilities, compensation, management and career progression, resulting in a time of high turnover. By proactively communicating with employees about these changes, HR can retain talent and avoid costly attrition.
- Real estate: Along with new employees comes all their paperwork. If an HR department hasn’t converted to digital files, an M&A may be a good reason to do so. It can save on the costs associated with finding space for (and moving) decades of paperwork.
- Printing and mailing: It may not seem like a big expense, but printing and mailing thousands of employee files can quickly add up. Using a digital platform with eSignature can practically eliminate this cost.
3. Mitigate risk
Even though the corporate strategy teams have accounted for the overall risk of an M&A, there is still potential risk when it comes to HR compliance. When absorbing so many new employee files, it can be hard to keep tabs on everything and see which files are missing. To minimize risk, HR must pay special attention to these compliance best practices:
- Track new employee paperwork. Be sure all acquired employees complete and sign the necessary forms and paperwork. Consider using a platform that makes it easy to see what paperwork is missing.
- Centralize employee documents. Managing compliance is exponentially easier when all employee files are digitally centralized in one place, making it easy to see who’s missing what.
- Manage retention policies. Each new employee file comes with an associated retention period. This isn’t anything out of the ordinary, but it can get tricky when the business acquires employees from a new geography, which can mean a whole new set of guidelines.
HR is paramount to the success of an M&A, which means it’s an ideal time for them to act as a true business partner by contributing to real business gains. To understand how an HR Service Delivery platform can help you act on all the tips we describe above, check out our new eBook, HR’s Role in Mergers and Acquisitions: How HR Can Smooth Time to Value, Smooth Integration and Mitigate Risk.
