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"4 Strategic Planning Tips to Prepare You for Mergers, Acquisitions, & Spin-Offs"
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4 Strategic Planning Tips to Prepare You for Mergers, Acquisitions, & Spinoffs
HR/Payroll plays a crucial role in a smooth transition for the employees when two companies merge, one is acquired, or a company spins off from a parent. HR/Payroll professionals need a sound strategy in place that includes fastidious planning and scheduling to meet the challenges ahead.
Below are four strategic planning tips that can help prepare you for the changes ahead.
TIP 1: Comprise a Team of Key HR/Payroll and IT staff members.
First, comprise a team who will evaluate the HR/Payroll systems, convert the data, and develop your integration plan. The person ordinarily in charge of Payroll operations should lead the team. Your team may also benefit from hiring an outside consultant who is familiar with common Payroll integration challenges. This is particularly important if you are spinning off from another company and there are no legacy products or policies in place.
TIP 2: Assess all HR/Payroll Systems
When you are the acquiring company or a spinoff, you have the advantage of deciding what system you will ultimately use: will you integrate the new company’s HR and Payroll data into your current system, switch to their system, start from scratch, or agree to some kind of hybrid solution? But if you are acquiring/merging, before you can make that determination, you need to assess the new company’s system and the state of their data. Some questions to ask at the outset include:
•What HR/Payroll software does the new company use?
•Are values changing for key elements such as organizational or job structure?
•Can the old system generate files in a format to allow data transformation and conversion into the new?
•Does the company have a contract in place with their software vendor? Is it cost-effective to beak the other company’s contract?
• Does the new company use a different business model or employee type than your company (i.e.: commissioned employees, employees who work from home, or foreign employees who are subject to different labor laws)?
• What is the state of their data? Is anything missing, outdated, or incomplete?
• Is the list of employees final or are layoffs imminent?
This kind of meticulous data gathering is essential to making an informed decision about how you will integrate the new employees into the system.
TIP 3: Coordinate the Integration with the End of Year or Quarter if Possible.
Make decisions about which system(s) you’ll use, your conversion criteria, and most importantly, timing. Since many mergers and acquisitions are kept confidential, the HR and Payroll team might have a very brief window of time to actually complete the integration. If you are fortunate and have some flexibility, coordinate the integration with the end of the fiscal year or the quarter so the changes are less disruptive. If you are concerned that you will not make a tight deadline, consider what information will allow new employees to get paid immediately after the merger, acquisition, or spinoff, and then prioritize. Make sure the essential data is correct and in the system by the due date, then migrate the rest of the information soon after. Some companies may decide to set up a transition services agreement (TSA) that buys the parent or new company time to complete the integration without risking an interruption of service. This is a costly alternative, but may be worth it. At this stage you’ll also want to set your conversion criteria. If the new company uses codes and fields that are different from the ones in your system, you’ll need to make decisions about what you want your final fields to be and then make adjustments accordingly so the data merges correctly.
TIP 4: Test the System with “Dummy” Data First
Once you have determined what software you’re using, acquired and scrubbed all your data, configured your fields, and made a backup of your current system, it’s time to integrate! You might use dummy data first to test the system, then do the rest of the data migration in batches so you can fix any problems along the way. Of course, as with any technical changes, you’ll want to test the integration (when it’s complete) before you go live—and make sure you have support in the wings ready to answer employees’ questions. When integrating and creating new HR and Payroll systems during a merger, acquisition, or spinoff, the best strategy is to start preparing right away. Then, even if there are delays or last-minute changes, you are in a good position to handle them.
Focused on Human Resources and Payroll consulting services, Wise consultants have technical, functional, and operational knowledge and experience in human capital management systems. A Ceridian partner since 1996, Wise Consulting Associates has unrivaled experience in all Ceridian legacy products, and we began working with Dayforce WFM and HCM upon their initial release. The company has provided support for Ultimate Software’s product suite since 1998. The Wise advantage comes from our extensive, hands-on experience and certification, combined with an in-depth knowledge of UltiPro. Learn more about us at www.WiseConsulting.com.
Our in-depth system knowledge includes:
Mergers, Acquisitions and Spin Offs
Human resources HRIS
Reporting / Data Conversion
www.WiseConsulting.com • (800) 654-4550
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