People-centric strategy on M&A
Why a people-centric strategy is key to a successful Merger or Acquisition. Key HR considerations for successful Mergers & Acquisitions
Why a people-centric strategy is key to a successful Merger or Acquisition Key HR considerations for successful Mergers & Acquisitions
Firstly, there’s the challenge of maintaining a positive Businesses need to ensure that the new, consolidated Globally, Mergers & Acquisitions (M&A) hit record experience for existing employees. M&As can often be systems are better than, or at least equivalent to, what numbers in 2021, with unsettling, and it’s not uncommon for organizations to existed in the past – and not just a complex and hard-to- focus largely on the consolidation of their leadership team, manage mash-up of previous systems. Ideally, HR and IT while neglecting the needs of the broader workforce. teams should work together to use a period of change as 62,000 As such, employees can end up in somewhat of a holding an opportunity to take a step back, evaluate their overall announced deals, and pattern, and feel they aren’t being listened to, or that HCM systems, and invest in best-practice initiatives their role has been usurped. In fact, almost half (47%) of moving forward. all employees leave a business within a year after a M&A Thirdly, there’s the ongoing challenge of capturing 2 $5.1 trillion takes place, and 75% leave within three years. employee sentiment – and data relating to their in publicly disclosed deal values. needs and priorities – and using this information in This can have a huge 昀氀ow-on e昀昀ect in terms of a meaningful way that adds value both to employees, productivity, continued growth, and the experience and to the business as a whole. Being able to accurately According to PwC’s latest Global M&A Industry Trends enjoyed by remaining employees. Yet, in so many capture and analyse data requires having sophisticated Report, a “trifecta of low operating costs, lower regulation situations, the employee experience is often overlooked tools in place, and it’s vital that these tools are given and taxes, and even lower interest rates, have helped or is an afterthought during a M&A. Often, it’s tackled a su昀케cient amount of focus and priority during companies achieve year-on-year earnings growth, later in the piece – when the dust has settled – which for a M&A period. pushed stock markets to seemingly endless record highs, many employees, isn’t enough. 1 In this eBook, we provide some deeper insights into the and generally spurred M&A.” Secondly, with any M&A, there’s the very signi昀椀cant HR challenges associated with Mergers & Acquisitions, While embarking upon a M&A can strengthen challenge of bringing together disparate tools, processes explain how these challenges can be addressed, and an organization’s position in the market and unlock and infrastructure – merging existing HR databases and detail the ways in which Rizing and our technology a range of strategic bene昀椀ts, they also come with information without any lapse in delivery, and without solutions can help. some major challenges – particularly relating to HR. losing any critical employee information. 2
In this eBook: 01 03 05 The role of HR in How Rizing can help Success Stories Mergers & Acquisitions 02 04 Transitioning HR during a M&A: Our solutions key priorities to focus on • Employee experience • HR systems integration • Data and analysis 3
% 70-90 of all M&As fail to achieve their strategic 3 and 昀椀nancial objectives. %of executives identi昀椀ed talent acquisition as 4 a strategic driver for a M&A. 67 The ability to hire and retain sta昀昀 is the most important 5 factor in an organization’s growth capability. 4
The role of HR in Mergers & Acquisitions HR teams can get pulled in all kinds of di昀昀erent directions during a M&A, and without the right technology in place, ful昀椀lling all of these responsibilities can be very challenging and overwhelming. Some of these responsibilities include: De昀椀ning current and future organizational disparate 昀椀les, spreadsheets or databases. Ensuring a smooth transition for employees Ensuring governance and compliance structures For a M&A to be e昀昀ective, this information needs It’s very easy for discontent to follow a M&A, HR teams are also responsible for ensuring HR teams are typically called upon to provide to be consolidated and centralized, and this and for employees to leave the organization in that the organization stays up to date with detailed organizational charts before a merger task often falls upon the HR team’s shoulders. considerable numbers. To minimise attrition rates, current requirements regarding governance or acquisition, as well as to provide an outline Having an accurate and centralized record of and ensure a positive overall experience, and compliance, especially if the business for what a future structure could look like under information should be a key priority for the HR teams need to 昀椀nd ways to establish unity now operates in multiple countries or the new organization. Sometimes, HR teams organization moving forward, and should be and cohesion, provide clarity regarding new geographical regions. are also required to model di昀昀erent potential a focus of any M&A from the outset. structures, and accurately answer questions HR structures and present these to a board for Enabling data-led decision making from sta昀昀. Extracting and acting upon employee insights decision-making. As well as ensuring a smooth transition, This means being able to answer some critical There are lots of very important people-related Hiring new sta昀昀/adapting existing contracts HR teams are often responsible for monitoring questions very quickly and accurately: Who decisions to be made during a M&A, and HR From the outset of a M&A, there’s also typically employee progress, and reporting to boards/ will assume which roles in the new business? teams are often called upon to provide quite a huge workload for HR associated with moving management teams regarding employee Which roles, teams or departments will become detailed information very quickly. This could employees to new contracts, hiring new sta昀昀, sentiment during and after a merger. Without include anything from the structure of a team, making any necessary redundancies, and the right tools at hand, this can be very di昀케cult. redundant? In terms of speci昀椀c roles, how can to payroll, time and attendance, or even communicating this information to the broader the workforce best be merged? individual sta昀昀 performance. Unless the organization has consolidated HR systems in workforce. Meeting with individual sta昀昀, and Centralizing information completing required paperwork, can alone be During a M&A, important HR-related information place throughout the merger or acquisition, a huge and very time-consuming responsibility. it can be very di昀케cult for HR teams to extract will often end up spread out across the di昀昀erent and collate the information they need. organizations or departments, residing in 5
Transitioning HR during a M&A: challenges and opportunities While there are many challenges during a M&A, HR teams can gain a signi昀椀cant advantage by focusing on three key priorities from the outset: Maintaining a positive Bringing disparate tools Enabling data-fuelled employee experience and systems together decision making 6
01 Maintaining a positive employee experience Challenge: Challenge: Challenge: Challenge: Challenge: Employees can 昀椀nd change Attrition rates are typically high Employees don’t feel listened to, Culture becomes “us” versus “them.” Remote working can exacerbate unsettling and unnerving and this following a M&A. which leads to disengagement. disconnectedness. often impacts productivity. When two separate 昀椀rms are 47% of employees leave a business Recent research by Gallup suggests merged, it’s easy for it to feel like Without a consistent technology In 2 weeks following a merger, the within a year after a merger or that only a third (34%) of American there are still two separate entities. experience, or regular face-to- amount of work an employee does acquisition, and 75% leave within employees are engaged at work face contact with colleagues and 7 8 drops to between 1-2 hours a day. 3 years. anyway, and disengaged employees managers, it’s easy for discontent would leave the organization for or a lack of engagement to settle in, 9 almost any increase in salary. and for it to escalate. Opportunity: Opportunity: Opportunity: Opportunity: Opportunity: • Make HR a priority in M&A • Be open and collaborative • Use modern tools to actively • Find smart ways to merge tools, • Devise ways to regularly connect planning – before, during and after. regarding any structural changes. capture employee feedback and culture and ways of working so and engage people using cloud- • Communicate regularly. • Check in regularly, especially if spot potential disintegration in the that everyone feels valued and based tools. employees are working remotely. employee experience. aligned. • Provide self-service tools • Learn from your people to help • Consider tools such as Qualtrics so employees can 昀椀nd the • Use data-led insights about your people. which can help capture information they need. an employee’s performance to • Communicate with employees sentiment and ensure cultural nurture them. before, during and following issues are addressed before business changes to reassure they escalate. and prevent “water cooler gossip.” 7
02 Bringing disparate tools and systems together Challenge: Challenge: Challenge: Challenge: Merging disparate HR tools and processes Disconnect in terms of HR priorities across Solutions are short-sighted. Compliance complexity. can be very complex. the new organization. In the rush to integrate, solutions can be Staying on top of spiralling compliance 28% of CFOs say merging IT systems and Di昀昀erent businesses, teams and departments ad-hoc and not supportive of growth. requirements as organizations grow and adapt, technology such as HR is the #1 challenge will all have their own needs and priorities. or enter new markets, can be a major challenge. 10 during a business transformation. What’s needed: What’s needed: What’s needed: What’s needed: • Have a sound strategy in place from • Put systems in place to capture information • Seek expert advice in selecting, • Seek expert guidance. the beginning. on di昀昀erent priorities, so you can identify assessing and rolling out the right HCM • Invest in proven tools with compliance in-built • Engage an expert partner. shared needs. solution to meet the changing needs of and appropriate for di昀昀erent regions. • Empower managers to implement targeted your organization. • Identify and update all manual processes changes and measures relevant to their and centralise existing systems. teams and departments. • Communicate extensively. • Make collaboration on HR a priority from • Provide in-depth training and learning the outset. for sta昀昀 on new systems. 8
03 Enabling data-fuelled decision-making Challenge: Challenge: Need for data and analysis increases exponentially during a M&A. Lack of insights as to existing skills regarding new roles. The need for strategic analytics increases astronomically during Without the right tools in place, it’s easy for existing sta昀昀 to The human capital an M&A. In particular, HR teams typically need to report to boards get overlooked for a promotion in the newly merged company, component can equate and possibly equity 昀椀rms with information around workforce or to get placed in the wrong area. to between planning, compensation and attrition targets. % % 10and15 What’s needed: What’s needed: of the total purchase price 6 • A comprehensive assessment of your analytics maturity to • Use modern tools to get the insights you need to more of an acquisition. identify gaps and opportunities. e昀昀ectively plan for migration, so you’re deploying the right • Investment in a consistent, highly-governed reporting and people into the right roles. analytics solution that can integrate with your current workforce. • Archiving of any dated legacy data to de-risk and “de-clutter” your migration to the new solution. • Rapid integration of data from all aspects of the new business – right from the outset – so you have immediate insights about your new, combined workforce. 9
How Rizing can help When embarking upon a period of change or disruption, it’s important to have a strategic partner who can guide you in your decision making from the outset. Rizing has the experience and deep expertise to give you the foresight, insight and future view to make optimal decisions at every step. Speci昀椀c services include: Implementation services Business transformation services Managed services (ongoing partnership and Business technology services When implementing a new HCM solution, Achieving digital transformation requires more con昀椀guration support) (integrations, IA, analytics etc) you need a safe pair of hands, and a partner than just implementing new technologies and What happens in your business after a new Rizing’s Business Technology Services team that’s committed to delivering on time, tools. It can also mean revamping your HR solution is implemented? Our experts can can provide assistance with, and insights into, and on budget. Our approach has six key pillars: strategy and analytics, business process design, ensure you’re prepared for the road ahead – many aspects of your technology and business our IMPACT Methodology, leading practices change management, and training. If your whether it’s providing a modest level of support, strategy. We advise on, implement, and support con昀椀guration, 昀氀exible deployment models, organization is embarking upon a digitalization or o昀昀ering a more comprehensive and strategic a variety of products and technologies – project accelerators, a smart-shoring approach, initiative, we can help you maximize its success plan. We o昀昀er support in administrative services, from the SAP Business Technology Platform, and a commitment to full the complete business by providing these other transformative services. preventative tactics, adaptive and corrective to Geospatial Information Systems, to Advanced transformation of our client. measures, payroll support, change control, Business Application Programming – and more. release management, and more so that we can Our experts help you harness technology to empower your HR teams to focus on strategy grow your business value and work strategically and improve resource utilization. into the future. 10
Business process design Change management and strategic consulting Reporting and strategic analytics Training and digital adoption Our experts can also help you identify gaps Rizing’s Change Enablement Toolkit and expert Leveraging reporting and analytics is paramount Implementing an HR system helps execute between current and future states. We partner consultants provide the outline and tools you to making smart, data-driven decisions. But most and roll out training that ensures maximum to create business processes and documentation need to support your change management talent acquisition functions spend 80% of their end-user adoption and measures productivity that provide a high-level overview of process activities, equip your organization with a plan for time capturing data, which leaves little time for and bottom-line improvements. How? activities and tasks – presenting the solution a smooth transition from current state to future analysis and action. With Rizing’s Reporting and Through training that supports a variety of in depth, understanding project requirements, state, and foster stronger system acceptance Strategic Analytics, supplemented by guidance learning preferences and a strategy that is enabling process alignment, and allowing HR and higher user adoption. This can improve from our experienced team, businesses and their customized to 昀椀t your organization. Our experts specialists to identify areas of improvement. employee morale, productivity, quality of work, HR teams can develop reports and reporting help put together and execute a targeted training and key performer retention – allowing you to best practices to enable timely, actional insights plan to boost business outcomes and drive user design and deliver training to stakeholders in that drive improvement across the organization. adoption and best practices. methods that suit their individual learning styles. Get started today with Rizing’s comprehensive and complementary people analytics maturity assessment. Contact us at [email protected] 11
Our solutions SAP SuccessFactors Lyra SAP SuccessFactors builds on the best of HCM and layers on critical Built on SAP Analytics Cloud and SAP Data Warehouse Cloud, employee experience capabilities and insights. This cloud-based Lyra is the only end-to-end analytics solution that harmonizes solution provides a powerful human resources management historic legacy system data with full integration to SAP system (HRMS) for core HR and payroll, talent management, SuccessFactors. This modular and scalable solution include employee experience management, and people analytics while leading practice Analytics Metric Pack templates for Core HR, focusing on the employee experience with an open, secure Global Payroll, Recruiting, Learning, and Performance and Goals. technology foundation. With the ability to archive historic and current people data from legacy sources, harmonize data into 昀氀exible models, and visualize insights, Lyra allows organizations to e昀昀ectively manage risk, business continuity, and employee wellness. WorkForce Software WorkForce Software is helping some of the world’s most innovative organisations optimize their workforce, protect against compliance risks and increase employee engagement to unlock new potential Qualtrics and Rizing Experience Insights for resiliency and optimal performance. Whether your employees Qualtrics brings Employee Experience data to SAP SuccessFactors; are deskless or o昀케ce workers, unionised, full-time, part-time a combination called Human Experience Management (HXM). With or seasonal, WorkForce Software makes managing your global Qualtrics, companies can best listen to employees through workforce easy, less costly, and more rewarding for everyone. a platform that collects and tracks employee sentiment while also Rizing’s Workforce Software practice has strong capabilities across the entire WFS suite, supplemented by professional and managed o昀昀ering pre-packaged survey content tested and proven to be e昀昀ective through real-world application. Partners like Rizing bring services, and enhanced by our special skills, certi昀椀cations, and next the business transformation experience that helps customers level o昀昀erings. e昀昀ectively use employee sentiment data. Rizing’s Employee Gain real-time visibility into your workforce by combining time and Experience Insights (EXI) will enable organizations to assemble attendance tracking, scheduling, and absence compliance tools sophisticated research results as employees interact with SAP with the SAP Time and Attendance Management application by SuccessFactors solutions by leveraging Qualtrics experience data – WorkForce Software. the beliefs, intentions, and perceptions of employees. 12
Success story: Beacon Roo昀椀ng Supply Beacon Roo昀椀ng Supply (Beacon) is a large provider of commercial Beacon therefore engaged the experts at Rizing to implement roo昀椀ng products and complementary building materials to Canada a sophisticated learning management solution based on SAP and the US. SuccessFactors. We ran a series of workshops to determine the scope of the new solution and delivered the project on time – The business recently underwent a signi昀椀cant period of growth transferring all previous learning data into the new SAP – expanding by 25%. This put the business’ existing learning SuccessFactors solution. management system under pressure. Information about Beacon’s products and services was scattered across the organization and The new solution ensures sta昀昀 can keep their knowledge up wasn’t centralised. This meant it was hard to access, and sta昀昀 were to date, and also gives Beacon’s administrative sta昀昀 the ability struggling to get the knowledge they needed. to quickly and easily create customized reports regarding employees’ progress. 13
Success story: PeaceHealth PeaceHealth is a large provider of healthcare services in Canada understand their needs, and to design a solution that was and the US, with over 15,000 employees, including 800 physicians. aligned with their goals. Recently, the business moved from independently operated The Goals and Performance Management, 360, and Recruiting units to a single operating company, and needed to centralize, modules were all chosen to help PeaceHealth more successfully streamline and standardize its processes to ensure its employees manage their talent. could ful昀椀l the organization’s mission. The business now has considerably enhanced accessibility, Previously, the business was relying on a dated and home-grown visibility and understanding of their overall HR policies, solution for HR management and recruitment. Realizing this programs and processes. Rizing also provided a range of solution no longer met their needs, they turned to Rizing for help. change management services to ensure the project was Rizing implemented a powerful, new solution built on SAP seamlessly integrated and stayed on track, from start to 昀椀nish. SuccessFactors. We worked closely with PeaceHealth to 14
Find out more If you are interested in learning more about Rizing’s expertise in Mergers & Acquisitions, please get in touch for a free discovery call with a Rizing expert. 1. 5. PwC, Global M&A Industry Trends: 2022 Outlook, [online], https://www.pwc.com/gx/en/services/deals/trends.html 2. 8. 9. Gallup, How to stop losing talent when you merge and acquire, [online], https://www.gallup.com/workplace/267494/stop-losing-talent-merge-acquire.aspx#:~:text=During%20M%26As%2C%20 the%20focus%20tends,within%20the%20昀椀rst%20three%20years. 3. 7. HR Magazine, The HR role in securing M&A success, [online], https://www.hrmagazine.co.uk/content/features/hot-seat-the-hr-role-in-securing-m-a-success 4. 6. EY, How a new talent mindset can solve the post-merger integration puzzle, [online], https://www.ey.com/en_gl/workforce/how-a-new-talent-mindset-can-solve-the-post-merger-integration-puzzle 10. HR Daily Advisor, Tips for helping manage mergers and acquisitions, [online], https://hrdailyadvisor.blr.com/2016/12/02/7-tips-helping-manage-mergers-acquisitions/
