• Detailed plans can only get you so far during an acquisition integration. HR leaders may still face turnover and engagement risk, says Emily Voltz, VP of HR at PCS Retirement.
  • Quickly giving members of the acquired company new roles has the right intention, but often leaves employees confused about who’s in charge and what their day-to-day responsibilities are. Take time to understand how roles in both companies operate independently before restructuring.
  • Consistency and two-way communication are essential during an integration and will help keep operations on track. Asking for feedback is the best way to detect red flags and respond in real time.

Even if HR does everything right, turnover and engagement risk remain very common following acquisitions. Listening carefully is the first step to getting the integration back on track.

When an acquisition is on the horizon, good human resources leaders will create a step-by-step integration plan at the outset, based on experience and best practices. A strong kick-off meeting, aligning payroll practices and employee handbook policies, and weekly integration meetings are all tried-and-true action items for your HR checklist.

However, the truth is that even if HR does everything right, turnover and engagement risk remain very common following acquisitions.

I joined PCS Retirement as Vice President of Human Resources about a year ago. The company made three acquisitions over the last three years, including one in late 2020. We had a strong start to the transition — full of enthusiasm and vision, and backed by an incremental process designed to achieve full integration within a year — but I was very conscious that in any integration, positive energy can begin to tail off after a few months. Sure enough, through individual conversations, we picked up on some “noise” in the company. Common themes began to emerge, including some concerns around inconsistent management, a lack of communication and general confusion as to where we were in the process.

By listening carefully, we were able to respond in real time and successfully keep the integration process moving in the right direction. My takeaways from this experience include some valuable HR lessons for any company heading into an acquisition to achieve a successful integration.

Don’t restructure too quickly

Team restructuring is inevitable in any integration, and giving the employees from acquired companies new roles or management positions in the merged company is a testament to their talent. However, it can also be a source of confusion if operations aren’t fully integrated yet: restructuring can make people feel like there is a lack of leadership during a time of transition.

At PCS, we wanted employees from the acquired company to feel they had a new home, so we put them in roles within our world. Yet because many of them were still operating in their old roles while simultaneously trying to understand their new positions, employees were telling us that daily management and role clarity felt inconsistent.

Think of integrating companies and restructuring teams like moving into a new home. You wouldn’t leave your old home behind with unfinished projects and without packing and organizing your items first.

As an HR leader, you can use this challenge as an opportunity to pull aside a few of the key employees in pivotal roles at the acquired company and conduct “stay interviews” to hear directly from employees where you are missing the mark. In our experience, we learned there was a lack of clarity surrounding leadership and direction: Who’s running the day-to-day? Who’s at the helm while we’re still operating as two separate companies? Who’s driving the integration?

Based on this feedback, we developed a more effective strategy of placing employees in operational teams with clear leadership rather than immediately restructuring. We shifted duties of a few leaders initially assigned to roles in PCS back to focus on the acquired business and the employees who knew them, instead putting them in charge of driving the integration.

Every acquisition is different, and for some it might be the right decision for HR leaders to move swiftly and integrate. In this case specifically, by enabling leaders and teams to stick with their old roles, employees felt like they understood the structure in place until the integration happened and they were required to evolve into their new roles. In addition to keeping operations running smoothly and making sure employees feel supported, this approach helps keep people and their needs at the center of the company’s integration goals.

When a company is in the thick of a complex integration process, it’s easy for meetings to fall by the wayside. But they are essential tools for understanding daily questions and problems.

Be consistent: Make a plan, then stick to it

Another common stumbling block for HR departments in acquisition processes is a lack of consistency. In our case, we had a well-defined plan and a strong start to the year following the announcement in January 2021. We held a town hall meeting, inviting all the new employees and getting them excited about the upcoming transition.

After the kick-off, as most companies do, we set up weekly meetings for all new and existing employees, aimed at working together toward the goal of being one organization. Yet despite everyone’s best efforts, it is common for that enthusiasm to wane, and weekly meetings might drop off the calendar. If you aren’t diligent, they can potentially disappear altogether.

Making a plan is one thing, but sticking to it is an entirely different challenge. When a company is in the thick of a complex integration process, it’s easy for meetings to fall by the wayside. But they are essential tools that help leaders understand the daily questions to address inevitable challenges that arise.

We learned that being consistent in the implementation of your integration plan can help you pivot quickly and address what you are hearing. This is essential for driving a successful transition.

Communication is a two-way street. Start by listening and getting feedback, then keep people informed in the most transparent way possible on what is happening at all times.

During an acquisition integration, communicate (and listen well)

Any HR leader will tell you that communication is fundamental, especially in complicated scenarios like the period following an acquisition. But don’t forget that communication is a two-way street. It’s more than just repeating your messages on various channels; all valuable conversation starts with listening.

Stay interviews and asking leaders for feedback about what their teams say are great ways to obtain valuable insight at each step in the process. In our case, we often got feedback that confirmed what we had suspected, helping us to define and confirm our path forward.

HR should lay out a communication plan and then make sure to keep employees and leaders informed in the most transparent way possible on what is happening at all times. This includes how things are moving forward, where progress is being made, and which areas need improvement.

HR can also take an active role in working with operations to get ahead of confusion by organizing town halls, office hours, and points of contact for certain subjects. The more informed people are, the more comfortable and engaged they are likely to feel throughout the process.

Here’s the bottom line.

Managing a smooth integration following an acquisition can be a winding road with many speed bumps, but HR leaders have the tools at their disposal to ensure a smooth ride. A good plan is a good start, but consistency and effective communication along the way will help ensure that any red flags are detected and responded to early, and effectively. Finally, a focus on driving the process through leadership and management will help keep people on board and engaged with the acquisition strategy.

This GrowthBit is featured in LLR’s 2023 Growth Guide, along with other exclusive insights from our portfolio company leaders and Value Creation Team. Download the eBook here.