There are many reasons many mergers and acquisitions fail; from the challenge of managing multiple branch offices to disjointed cross-border IT infrastructure and a lithely of local and country regulations, there are many areas where risk and/or potential liabilities lay. One of the often overlooked and certainly one of the most important for continuity of operations is payroll.
Given my personal experience in M&A transactions, working with some of the brightest in the DFW market, and our experience here at KarbonPay, the following is guidance for successful payroll integration.
Consolidation
In an M&A environment, many services, vendors, process, and procedures are common.
Performing a full review of both company’s systems prior to integration is mandatory to choosing the correct routes going forward so that the new combined entity may take advantage of consolidated back-office savings.
Employee Experience
As part of the review of the above, an often-overlooked perspective is that of the employee. This time can be stressful for employees due to uncertainty, competing priorities, and a change in systems and processes. Ensuring a smooth transition is critical for employee retention and productivity.
Data
Centralizing into a global payroll system like KarbonPay provides an invaluable single source of truth. This allows management real time analytics across the entire organization where payroll expenses and liabilities can be measured. This allows leaders to quickly identify headcount synergies (potential savings) or areas which have room for additional labor budget for improved output.
Post-merger Plan
Payroll/HR leaders should have regular meetings with finance and other key decision makers. The three legs of department leaders, finance, and corporate management must maintain communication through the process in the following areas:
· Structure of the payroll function
· Compliance
· Managers and their responsibilities: changes, overlap, etc
· Critical system identification, contingency plans for failures
· Concurrent payroll runs and payroll merging, integration into new systems
· Severance and other HR processes
· Tax filing requirements
· Post-implementation review
· Exiting existing payroll systems
Leverage the Experience of your Payroll Provider
At KarbonPay, we have years of international payroll experience in the most complex of situations and environments. Prior to the end of your due diligence period, incorporating the KarbonPay team is a great way to ensure a successful payroll migration/consolidation for an ever-growing list of multinational locations.
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