Background:
Time and again, books, articles, guides, interviews, podcasts, and various experts weigh in on the secrets to M&A success but often overlook the HR workstream as not only a critical component, but also a source of meaningful value creation.
Learn how to apply the guidance shared in this article by Financier Worldwide and KPMG to de-risk and accelerate your value creation plan today. Hint: it starts before the ink is dry.
Due diligence is key.
Due diligence is the first step in any successful M&A transaction, yet HR focused diligence is often high level and centered on cultural fit rather than the operational realities of HR, benefits, and HCM programs, vendors, systems, and processes.
Apply the tenets usually reserved for other disciplines.
By applying the same tenets of diligence typically reserved for finance or IT to HR, companies can both de-risk the transaction and unlock value from an often-overlooked workstream.
- It all starts with data
A strong, data driven foundation is critical in any successful transaction. For the HR workstream, this means compiling detailed information across HR, benefits, and HCM plans, processes, vendors, and systems including census data, demographics, plan documents, payroll, ancillary benefits, vendor contracts, invoices, SOPs, compliance etc. - Treat diligence as the first step in integration
Rather than viewing diligence as purely exploratory, treat it as the foundation for integration planning. Translate findings into actionable steps, for example assessing the cultural and financial impact of transitioning employees onto parent company benefit plans. - Solidify integration design choices
Decisions made within the HR workstream directly affect employees, both those staying and those transitioning. As organizations develop their value creation plan, it is critical to avoid ambiguity. Make clear, data driven operating model decisions and communicate them early to key stakeholders. This may include refining benefit plan structures, adjusting salary bands, or ensuring systems can support increased complexity. - Build the right integration team
Internal HR teams are often focused on maintaining the annual HR lifecycle while addressing increased employee concerns during periods of change. External resources are commonly engaged to support other workstreams in M&A, and HR should be no exception. Providing the right support helps de-risk Day One while improving retention and productivity.
How you can protect your employees
The success of your transaction starts before the ink is dry on the announcement. Data driven operational due diligence, combined with intentional decision making and supported by a strong, experienced team, will de risk the transaction, deliver value, and boost employee morale during an otherwise stressful time.
How Optimatum Can Help
Optimatum Solutions’ support of the HR workstream throughout the M&A lifecycle includes operational due diligence, Day One readiness, and post Day One synergy capture. We partner with internal and external stakeholders to inform data driven operational decision making, execute the transition, ensure alignment with the investment thesis, and deliver synergies.