September 6, 2022 Mergers & Acquisitions

Handle Mergers, Acquisitions and Divestitures On Time and On Budget

An acquisition, merger, divestiture, carve-out or spin-off of any size is a big undertaking and can involve a lot of moving pieces, including how you’re going to reconfigure your HCM system and payroll process to align with your organization’s new structure. Understanding task sequences, potential obstacles, realistic deadlines and global considerations is critical and can have a major impact on how efficiently and effectively the project is completed. While this may sound intimidating, there’s no need to sweat! Our team of Wise Consultants are experienced and ready to help you anticipate hurdles and execute the plan. 

 

It’s All in the Details 

 

Once committed to the project, the clock starts ticking. No matter how many people are involved – both on the project team and employees at the location(s) or business entities impacted – and especially if there are international considerations, there will be many, many details to consider and tasks to complete. A key piece of this puzzle is what your HCM system and payroll process will look like once decisions are made and everything is finalized – and what to do during the awkward phase when things are shifting. Taking the time to consider the details allows your project to stay on track and mitigates overspending, risk and errors. 

 

Every M&A project is different, so there’s no one-size-fits-all checklist, but, as a rule of thumb, it’s important to consider these three p’s: processes, people, and preparation. 

 

Processes 

 

The first thing to consider is which organizational processes – and technology –  will change or remain the same for the affected group of employees. Consider things like the group’s current processes for open enrollment, logging paid time off, and completing payroll. For acquisition, the more similarities between these processes and your company’s existing processes, the fewer resources you’ll have to dedicate to integrating and teaching the new group. For a divested group, new systems, technology and processes may be required to stand them up in time to get the first payroll completed accurately. Failing to identify and plan for necessary changes can throw a wrench in your timeline and add an unexpected expense to your balance sheet. 

 

People 

 

While it may seem like an elementary question, it’s important that you consider how many locations are impacted and the number of new team members your organization is acquiring, or how many are spinning off. The amount of resources needed to manage one location with 50 people is vastly different from what would be required for 7 international locations with 5,000 people impacted. 

 

Another thing to consider is employee data. Some companies, especially when considering international differences, require different data for each employee than your organization might currently have fields for in the current HCM system because that data has not been needed until now. In cases of divestiture, some ‘parent’ companies will cut off access to data before the opportunity to migrate employee information arises. Thoroughly understanding legal documents, timelines, policies, varying international requirements and how much support you’ll receive from other organizations involved allows you to better gauge the amount of time and energy it will take to collect any missing data points. 

 

Preparation  

 

This is one of the most important things to take into consideration. Many projects hit snags that could have been prevented early on if more in-depth preparation had been completed or a more experienced team was in place. Too often, the team managing the process is unintentionally understaffed or under-experienced, leading to cracks in critical pieces of the project that widen to chasms downstream. The best way to prevent mistakes and the resulting rework or missed deadlines is to ensure that your team gets a jump on the project and is armed with the manpower and knowledge to spot problems before they potentially derail the entire project. 

 

Set Your Merger, Acquisition or Divestiture Up for Success with Help from Wise Consulting 

 

Two of the most important KPIs for any large-scale organizational project are being on time and on budget. However, an acquisition may miss the mark in these two categories if your company lacks the infrastructure to seamlessly integrate the new entity or for a carve-out if the ‘newco’ is not staffed with leaders who can get payroll up and running on time. That’s why it’s essential to consult with the experts at Wise Consulting before diving in. Our team has successfully supported many complex merger, acquisition and divestiture projects, working with clients to provide seasoned support and guidance throughout the process.To learn more about our comprehensive Mergers & Acquisitions services, click here. To contact a member of our team, send a message to HCMHelp@WiseConsulting.com, call 800-654-4550 or visit www.WiseConsulting.com/contact/.

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