• When acquisition is at the center of a company’s growth strategy, HR needs to be fast and effective. According to Kate Woods from Schweiger Dermatology Group, the first 90 days are critical for retaining employees and long-term success.
  • Kate shares SDG’s playbook for the three months following an acquisition, focused on blending cultures through communication and connection. Her proven plan prioritizes managing people, processes and systems, and maintaining a constructive feedback loop – delivering valuable lessons learned for all industries and business types.
  • Segmenting turnover data by acquisition is an invaluable way to understand exactly who is leaving and why. Employee stay and exit surveys provide essential insight for continually improving the process.

The first 90 days are critical for individual employee retention and long-term success. We have to be ready to go and on point throughout the process.

For a growth-by-acquisition company like Schweiger Dermatology Group (SDG), speed is the ultimate reward when it comes to integrating acquired employees. With 163% employee growth since 2018, around 25% of our current employees come from acquired practices.

When I joined SDG in 2019, one of the first things we did as an executive team was map out a formal playbook for acquisition onboarding and integration.

Our goal was to have a 30-day process from signing the letter of intent (LOI) to our new employees and providers becoming full-fledged members of the SDG team. Our acquisition pipeline is generally determined at the beginning of the year, but we don’t always know when each opportunity will proceed. We must be ready to go and on point throughout the entire process.

The first 90 days are critical, not only for individual employee retention but also for the long-term success of the practice. With a strong acquisition integration playbook, we can gain hearts and minds by day 90 and have a greater chance of them becoming successful team members.

Our playbook has saved us many times over the years and has been essential in helping integrate and blend company cultures. Below I’ll share key steps you can take in the first three months to successfully onboard an acquired business.

Dedicate 3 months to connection and communication

I think of companies as beehives: complex ecosystems that are always buzzing. Onboarding a fully separate and developed beehive within one’s own isn’t always easy, and there are many opportunities to get stung.

The path to success is a combination of managing people, processes and systems. Like bees, we all need to know our roles and understand how our actions impact the people around us. If we’re good at it, no one will feel the work we’re doing in the back room.

In the time between when an LOI is signed and the acquisition closes, HR should focus setting timelines, firming up who is transitioning along with their offer letters and job descriptions, shepherding the essential paperwork and managing transfer of key data into their HRIS systems. Below are other action items for this stage of the acquisition integration playbook between the signed LOI and close date:

  • Announcement coordination: In our instance, our CEO has a co-led meeting with the selling physicians so that their team members immediately understand the acquisition is a partnership.
  • 1:1 meetings & “open door therapy” hours: Not only held for the new general managers but also for the owners of the practice, all individual employees, and our existing team members who are leading the integration and managing behind the scenes operations.
  • Manage 401(k) funds transfer process and PTO consolidation
  • Assign new hire learning & development modules
  • “Party planning” & swag: Incorporate and distribute “swag” items to all acquired employees to help them feel like part of the team from day one. Consider incorporating their brand elements and colors with yours as a symbol of where you are now in the process of blending and becoming a united front.

Get that part of the integration moving so that you can focus the next part of your playbook on the following HR connections and communications. They are essential in the first 90 days post-closing:

Week 1/Day 1:

  • First mail outreach to employees that includes welcome messaging, benefits and enrollment reminders, and a survey to rate their experience so far. Sample survey questions include:
    • How prepared do you feel to start in your role after orientation?
    • What did you like the most and least about your onboarding?
    • Do you have any recommendations for improving the onboarding process at this point?
  • Town halls held for all staff and specialized groups.

Week 2:

  • Second, shorter email outreach with a general check-in, asking for free-form feedback about the onboarding experience and sharing information and reminders about the benefits timeline.

Week 3:

  • Intentionally left open for HR to gain insight from lessons learned during the process so far and to give people time to settle in.

Week 4:

  • Third email outreach with a voluntary employee satisfaction survey and reminder of approaching benefits and enrollment deadlines.

Weeks 5 – 11:

  • Take this time for both companies to get settled and blend operations.

Week 12/Day 90:

  • Employee stay surveys conducted by general managers and submitted to HR for action. This is similar to the first survey employees received. Look for actionable trends in feedback to make changes moving forward.

Our success is a combination of managing people, processes and systems. If we’re good at it, no one will feel the work we’re doing in the back room.

Build trust through openness and constant feedback

When we apply this process at SDG, we are constantly gathering feedback from acquisition owners and employees and pivoting when necessary. It’s key to distinguish between the feedback which requires a response, and feedback being generated by stress or anxiety. We take and process all comments — and while we don’t necessarily act on everything, we do always listen.

I can say with a smile on my face that we know mistakes are going to happen, though they’re never intentional or malicious. It’s exceptionally important to be honest and open about this with our teams. We can’t promise to be mistake-free, but we do promise that we will always fix what went wrong.

We prioritize getting to know the new company and helping them get to know us, so the team members understand it’s a partnership, and that we want to blend, not overtake. Helping workers to feel comfortable is an important step in creating a constructive feedback loop.

Taking the pulse after three months increases our chances of getting successful team members. We then work with operators to understand the nuances and improve our process.

Gather invaluable insight from stay surveys and turnover data

One of our most helpful tools during the acquisition integration process is the stay survey we conduct at the 90-day mark to understand why employees have remained with the company through the transition period, at least so far. Checking in and taking the pulse of employees after three months increases our chances of turning them into successful team members.

We also look at the overall percentage of people leaving between 90 and 180 days, and we use exit interviews to determine root causes. All this data gets funneled back to the operators and the senior team so that, together, we can understand the nuances and improve our acquisition onboarding process.

While receiving and analyzing this feedback, we have found segregating and understanding our turnover data by acquisition extremely helpful:

  • Are acquisition team members leaving for different reasons than standard new hires?
  • Are specific types of acquired employees leaving, and if so, why?
  • What was different about one acquisition compared to another with higher turnover?

Acquisition integration is not only about incorporating the other company’s senior team, who are critical to our success, but all individual employees and, in our case, practice owners as well. And of course, we must never forget our existing team members who are leading the integration and managing operations behind the scenes. It’s truly a group effort. Keep all these audiences in mind as you survey and pulse check why people are staying or leaving.

Here’s the bottom line.

Having a thoughtful, repeatable acquisition integration playbook the first 90 days has been the secret to SDG’s success as a growth-by-acquisition company. Careful planning open, two-way communication and having a mechanism for measuring success are how we’ve ensured effective onboarding of more than 1,200 employees over the past several years to the Schweiger family.

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.