A lot of the time, mergers and acquisitions are thought of as financial, operational and legal projects only. Which means the human impacts can be overlooked. This is especially unfortunate because research shows that one of the biggest issues that companies face during these times is people-related difficulties. And HR teams that are struggling to manage these issues get all the blame and none of the authority to fix it.
HR leaders are consistently tasked with retaining talent, integrating cultures, harmonising processes, and maintaining employee engagement during these periods of uncertainty. But could the right HRIS be the solution to this high workload and higher expectations?
People challenges are some of the greatest risks during any merger and acquisition activity. Which means people teams play an enormous role in managing that risk. The uncertainty and anxiety that comes with any major business change are compounded by the unique difficulties of joining two teams that may have overlap or very little in common. There can be major cultural clashes, policy and process inconsistencies and a disconnected employee experience – especially if there isn’t a strong (and consistent) communication plan in place. These issues can lead to an unwanted loss of key talent.
Beyond that, the people integration takes time. Where finance and operations may be able to merge quickly or easily, people are less likely to do so. It takes a long time to bring people together effectively. And failing to do so can have immense, long-term consequences.
A lot of the time, the acquiring company expects the new organisation to take on its existing systems, but that's not always the right call. When you're combining companies, it's always much more than just merging data and finances. It's about the people. And even the best tech can't fix people problems. Some of the most common issues mergers and acquisitions face are:
Expecting a platform chosen one for one company to suddenly fix these kinds of issues is a recipe for disaster. In fact, these are the kinds of conflicts that can make a great system break down. Before you start loading data onto the acquiring company's platform, be sure to do the foundational alignment before trying to overhaul two tech stacks.
While they aren't a panacea, good HRIS platforms really can make a world of difference. An HR system that is configured well, can help create comfort and consistency during an uncertain period like a merger or acquisition. When done correctly, you can use your HR system to deliver consistent communication (for example on the social feed in a platform like HiBob), promote employee autonomy through self-service tools, standardise the workflows between different sets of employees and help speed along the onboarding from one organisation to another.
Essentially, a well-executed HRIS can take away the heavy lifting of manual tasks and give you time to focus on the employee experience of the merger. It should be a useful part of your change management plan, rather than the whole thing.
"Your HR technology should make integration as simple and as human as possible. It should reduce pressure, not add to it."
— Tasha Chapman, Service Delivery Manager, Silver Cloud HiBob Practice
The safe-for-work version of this old data adage is 'Garbage in, garbage out' - but you'll have heard the more swear-forward version from engineers and developers for decades. And in this world of AI everything, it continues to be true. Your platform is only as good as the data you put into it. Which means that undertaking something as complex as M&A requires better than average data to pull it off right.
These kinds of projects often uncover years of legacy data issues. From outdated emergency contacts to incomplete employment records, integration creates a valuable opportunity to improve data quality before problems become bigger operational risks. So you need to have a lot of clarity about the data each party holds before simply smushing them together.
Read more: How to make people data migration better
A single part of a single blog post isn't enough to break down every aspect of what you need for integrating the data for two separate companies. It's a complex task and there will be nuances for each organisation. That said, we do have a list of things you need to consider before combining teams and systems:
One of the major potential pitfalls of M&A integration is making sure employee history and contract context is preserved. There are a lot of things that happen over the lifecycle of an employee, particularly your longest serving ones, that can get lost in translation during a merger. This can lead to a host of issues from compliance risks to employee dissatisfaction, not to mention the inaccuracies around reporting.
So, what do you do?
You need to make sure you have systems in place that are able to:
Getting these processes mapped out early can save you major headaches later on. It should be part of the early foundation work of your merger, but it should also show up during any tech discussions so you understand how your HR system can support you throughout merger and acquisition activity.
This is the big question. Does your existing HRIS support the future business? The answer? Maybe. Every M&A is different, so there is no blanket right and wrong. But there are a few key things to consider.
Start with understanding your options. First, keep one or the other HR systems. It is entirely possible that one of the organisations involved has a system that is well-suited to managing the needs of a now much larger business. Usually, that will be the acquiring organisation and usually that will be because they have already considered the needs of an organisation that grows in this way. It's not unheard of, but it's also not a given.
The second option is keeping one of the HR systems but undergoing optimisation before bringing the companies' data together. This might be the way to go if, after process and data mapping, one of the platforms has the capabilities needed, but isn't currently set up to handle the integration.
Want to know if your HR tech is up to scratch? You might need a Digital Review.
Then there's the third option. Change the tech stack altogether. Your best bet may not be sticking with what you know but, instead, changing your HR software fully. While that does mean undergoing an entirely new selection process, it is worth it to make sure you have the tools you need to make this merger a success. After all, people challenges are what make or break these acquisitions, so why go into it with a faulty foundation?
This is an area where a lot of HR Directors get stuck and ultimately make a choice based on gut feelings or network recommendations. And that's usually what happened before clients come to us. With so much going on, and the tech landscape constantly changing, it can be difficult to justify spending more time and effort on a software decision. But it's so much more than that. Your HR system is a critical piece of the puzzle for how your company operates. So getting forced to make a 'quick call' is never in the company's best interest.
But you also don't have to do it alone. During something as time and energy consuming as a merger, you may not have the resource to dedicate to a full review and selection process. And you don't have to. This is exactly where consultants like the ones here at Silver Cloud can help. We can do a full Digital Review where we look at all of the people, processes, data and technology you have available and make recommendations based on best practice and decades of experience. Or, if you're ready to move systems, we can help with selection and tap into our deep knowledge of the HR tech landscape and our ongoing vendor relationships.
Probably not by itself. But it sure does help.
The most important thing to remember during a merger is putting your people first. And a lot of that means doing the foundational work around getting your processes and data right. Luckily, that also makes your tech life much easier too. The most successful integrations are the ones that balance employee experience, change management and clear processes – which are all best done hand-in-hand with technology.
After all, a successful merger isn't measured by how quickly employee records are migrated. It's measured by how effectively people come together to build a new organisation.