Beth King
Chief People Officer
Paytronix
Episode 370
The Strategic HR Edge in M&A: Culture & Data Make or Break Deals
Current chapter: Built by People podcast features insights from world's top HR leaders
Built By PeopleDecember 20, 2024 · 16:59
Thesis
“HR's strategic value in M&A is crucial, leveraging both data-driven insights and deep cultural understanding during diligence to ensure successful integrations and long-term employee retention, rather than merely addressing post-deal aftermath.”
Show notes
This Built by People podcast episode features an in-depth conversation with HR leader Beth King at Paytronix, discussing her career journey from a recruiting coordinator to working in high-growth tech environments. The episode dives into key HR challenges and strategies during mergers and acquisitions, emphasizing the importance of HR's involvement early in the process. The discussion covers integrating company cultures, managing employee concerns, and the benefits of self-service models in larger organizations. King also shares a personal example of a successful acquisition transition and imparts career advice for maximizing opportunities in one's professional journey. 00:44 Beth King's Career Journey 02:54 High Growth Environments and Career Preferences 03:36 Challenges in Mergers and Acquisitions 06:41 HR's Role in M&A Transactions 09:51 Integrating Company Cultures Post-Merger 11:10 Managing Employee Concerns During M&A 13:29 HR's Early Involvement in M&A Planning 15:44 Parting Advice for Career Growth 16:50 Conclusion and Farewell
What you'll take away
- 1HR must be involved early in M&A diligence to provide data-backed insights on organizational growth, attrition, compensation philosophy, and cultural dynamics, which are as critical as financial data.
- 2Transitioning from a 'hypercare, high-touch' HR model in small companies to a 'self-service' model post-acquisition can be challenging but ultimately makes managers stronger and more prepared.
- 3Successful cultural integration post-merger requires identifying desired cultural elements, providing early visibility into the 'end state' of operations, and leveraging both company's strengths to facilitate smooth transitions.
- 4Managing employee concerns and maintaining morale during M&A necessitates a rigorous, yet flexible, communications plan and consistent, visible presence from the leadership team, including regular all-hands meetings and one-on-one conversations.
- 5Identifying informal leaders within the acquired company early in the process and empowering them to champion messages can significantly smooth integration and improve long-term employee retention.
What most organizations get wrong
- •While high-touch HR is often valued, being 'forced' into a self-service HR environment during an M&A transition can inherently make managers stronger and more prepared by requiring them to handle more tasks independently, rather than being solely negative.
In Beth's words
“HR is becoming less and less soft and more and more about numbers, right? So we really have embraced, I think, as a part of business, letting the data tell the story.”
This highlights the evolving role of HR as a data-driven, strategic business partner.
“from an HR perspective, I think first and foremost, one of the challenges that we face is that there's always an assumption by the employee base that we all know what's going on. And that the HR team is involved in everything. And in fact, surprise, surprise, HR is just like you. Like, we don't necessarily know everything either.”
This addresses a common misconception about HR's level of knowledge during sensitive periods like M&A, emphasizing transparency.
“This might not be how you operate today. It might not even be how we're going to ask you to operate in 6 months, but we're going to give you visibility into the end state so that we can understand what are the transitions that need to happen in order to get us from point A to point B.”
This underscores the importance of clear, forward-looking communication to manage expectations during cultural integration.
“you have to have a strong and rigorous communications plan that clearly outlines the milestones that you need to achieve, how you're going to achieve them, and who is in charge of those, all with respect to communication to your employee base.”
This emphasizes the critical need for a structured and well-assigned communication strategy during M&A.
“take every opportunity you can when you can... to travel, to take on different projects, to be a part of teams that you wouldn't normally be able to be a part of... that is what will give you a much more robust profile.”
This offers valuable career advice on building versatility and cross-functional understanding for HR professionals.
The problems this episode addresses
- •Employee base assumes HR knows all details during M&A, leading to potential distrust when HR doesn't have immediate answers.
- •Difficulty for employees accustomed to high-touch HR to adapt to self-service models common in larger acquired companies.
- •Integrating disparate company cultures post-merger for long-term success and employee cohesion.
- •Managing employee uncertainty, fear, and maintaining morale during periods of significant organizational change.
- •Lack of a formal-yet-informal communications plan during M&A can lead to confusion and anxiety among employees.
- •Identifying and retaining key informal leaders in acquired organizations who are crucial for disseminating messages and cultural integration.
In this episode
Built by People podcast features insights from world's top HR leaders
Beth King on Built by People
I started off as a recruiting coordinator in a construction management firm in Boston
WSJD Live: Starting Off Your Career
From an HR perspective, what are some challenges during an M&A
M&A and HR: Challenges
HR needs to have a seat at the table during M&A diligence
Why is it essential for HR to have a seat at the M
How do you approach integrating two different company cultures after a merger
How Do You Integrate Two Company Cultures After Merger?
How do you manage employee concerns and maintain morale during M&A process
M&A Communications: How to Manage Concerns
HR's involvement early in M&A planning process can help smooth transition for employees
HR's involvement in M&A planning
Beth, any parting advice you'd like to share with our audience
Beth Polsky on Building Your Career
Topics covered
Organizations and entities mentioned
Full transcript
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