Payroll plays a major role in helping manage the execution of
mergers and acquisitions (M&A), but the issues it faces are not
always understood elsewhere in the organization, particularly in
international deals. This Briefing Paper provides insights into how
payroll functions within different multinationals prepare for and
manage the impact of M&As, from their high level strategy to
the kinds of checklists they deploy.
Buchanan Research spoke to global payroll managers with M&A
experience at seven multinationals to gauge their experiences. They
ranged in size from a smaller start-up where payroll has
broad-ranging responsibilities, to large global corporations where
payroll's responsibilities are more conventionally defined
– and ranged in character from serial acquirers to
organizations that have gone through one-off mergers. The
respondents – predominantly drawn from Webster Buchanan's
Global Payroll Research network - recommend global payroll managers
take a number of steps to ease the path for future M&A activity
Make senior managers aware of
the issues that M&As trigger for payroll, and get payroll a
seat at the table As a downstream function, payroll's
role in M&As is largely reactive, and as a result its interests
can be overlooked. The earlier payroll can be involved in the
M&A process – subject to confidentiality and regulatory
constraints – the better. It is payroll's responsibility
to bring these issues to its acquisition team's attention
– ideally, before a specific deal is under consideration
Develop a methodology for
managing an M&A Advance preparations – including
collaboration with other functions and creating a checklist for
payroll activities – can help smooth the M&A process. A
sample set of milestones is provided in Part 1.4
Research ways to tap into
payroll professionals with M&A experience. Having
access to specialist M&A resources during a transition can help
head off problems. If you expect your company to be a serial
acquirer consider setting up a dedicated, experienced team
Tap into the expertise of the
acquired company's team, including any outsourced service
providers. Even if you do not plan to retain acquired team
members, their help will be critical during the transition
vendors. Strategies for easing the transition from a
vendor perspective are covered in Part 2.2
Be prepared to challenge
integration timescales. Integration timelines can be
challenging and in practice will sometimes need to be extended
– for example, by keeping onboard the acquired in-house team
longer than originally planned.
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