Project Management for HR: The Secret Behind a Successful M&A Deal

Project Management for HR: The Secret Behind a Successful M&A Deal
Mergers and Acquisitions

07 of 11

This insight is part 07 of 11 in this Collection.

April 12, 2023 6 mins

Project Management for HR: The Secret Behind a Successful M&A Deal

During a complex M&A deal, centralized project management helps keep human resources workstreams connected to ensure successful post-deal outcomes.

Key Takeaways
  1. If an M&A deal isn’t executed properly, it can seriously harm HR processes or even the entire deal.
  2. Prepare for potential complexities by laying the groundwork for a project management office to help coordinate different workstreams — including HR.
  3. Specialized HR M&A project management software can smoothly facilitate this oversight process.

A merger, acquisition or divestiture is an extremely complicated undertaking — and no component is more important than managing the complex series of workstreams and milestones necessary to integrate or separate organizations.

When it comes to human capital-related issues during a deal, it’s vital to focus on two key areas: First, the many aspects of integration or separation need to be looked after through different workstreams. Second, the progress of various workstreams needs to be tracked consistently and in a coordinated way. This is where a project management office comes in. The creation of a central office provides a clear route to raise issues and escalate within each workstream.

“The need to approach this transformational work properly really doesn't change whether a deal involves 100 employees or 10,000 employees,” says Alexander Miller, associate partner in Aon’s Human Capital Solutions practice, who specializes in human capital M&A deals. “While it’s a matter of scale, issues around benefits, compensation programs and how to communicate changes to employees, for example, always exist.”

Project management should have the following features:

  • Guiding principles, success metrics and accountability for specific tasks established early in the process
  • Identified and tracked milestones, decisions, challenges, risks and the most significant interdependencies
  • Regular meetings with workstream leads to ensure teams have support, information and guidance
  • Workstream projects that are consistently executed step by step

Best Practices for a Central HR Project Management Office

The HR Project Management Office (PMO) is, in effect, a steering committee that supervises the entire deal process and ensures all the crucial steps owned by HR are carried out. The PMO structure typically includes an executive sponsorship layer consisting of the chief human resources officer and the management of the acquiring or divesting company, with representation from the finance and business development executives of the impacted organizations.

The HR PMO coordinates across all the workstreams necessary to either combine or separate two businesses, including total rewards, employment law, HR systems and payroll, talent and organization and employee communications. It works with the other workstreams and functions involved in the deal — such as IT, finance, sales and the supply chain.

The HR PMO establishes the cadence of status reporting, detailing progress against what is expected of the HR workstreams across a range of timeframes — weekly, biweekly or monthly. This is in line with the overarching PMO that covers all aspects of the deal. It also creates an issue-tracking, resolution and escalation process so the workstreams can funnel up to the PMO or the executive sponsor level for key decisions. Every team has the chance raise any red flags or impediments to progress it’s experiencing on a weekly basis. This way, parties can identify risk early to either request resources or avoid any obstacles.

A successful deal depends on advanced preparation, centralized planning and follow-through. “Some companies begin planning around factors like benefit decisions months in advance of announcing a transaction,” says Bruno Monteiro da Silva, executive director for the EMEA region in Aon’s M&A and Transaction Solutions practice. “In a typical deal scenario, we might have four, five or six months of time between announcement and a target close date, but we're working with a lot of clients to see how we can accelerate this work by preparing well in advance of announcement.”

When Aon was selected to support the merger between two major healthcare organizations, the combined organization had over 110,000 employees being managed by two separate human resource management systems. This was the fourth major deal that we supported for this client, and each time we used our proprietary HR project management software TransAction ManagerTM. The platform became the client’s go-to resource for project reporting and tracking, as well as for organizational planning, including decision-making regarding talent selection. Having a reliable platform and project management process also enabled better integration of both rewards systems (read our article for more information: “Rethinking Your Total Rewards Programs During M&A”). Because Aon received daily feeds from the respective HR systems of record, the client was able to work with current employee data.

Quote icon

In a typical deal scenario, we might have four, five or six months of time between announcement and a target close date, but we're working with a lot of clients to see how we can accelerate this work by preparing well in advance of announcement.

Bruno Monteiro da Silva
Executive Director for the EMEA region, M&A and Transaction Solutions, Aon

Project Management Goes Beyond Ensuring Deal Completion

Effective project management of the HR function in a merger, acquisition or divesture can help ensure a deal goes through on time. But there are many other benefits. These include identifying any hiccups in the process of the deal early and resolving issues quickly so that employees have a smoother transition once the deal goes through. This could mean the difference between employees’ health insurance being in place on day one post-deal, seamlessly getting the new company’s first payroll up and running or issuing clear communication about the benefits and values underlying the transaction globally.

For more insights on how to navigate the people components that are impacted by corporate dealmaking, please see our article 8 Ways to Achieve a Winning People Strategy During M&A.

General Disclaimer

The information contained herein and the statements expressed are of a general nature and are not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information and use sources we consider reliable, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Terms of Use

The contents herein may not be reproduced, reused, reprinted or redistributed without the expressed written consent of Aon, unless otherwise authorized by Aon. To use information contained herein, please write to our team.

Aon's Better Being Podcast

Our Better Being podcast series, hosted by Aon Chief Wellbeing Officer Rachel Fellowes, explores wellbeing strategies and resilience. This season we cover human sustainability, kindness in the workplace, how to measure wellbeing, managing grief and more.

Aon Insights Series UK

Expert Views on Today's Risk Capital and Human Capital Issues

Construction and Infrastructure

The construction industry is under pressure from interconnected risks and notable macroeconomic developments. Learn how your organization can benefit from construction insurance and risk management.

Cyber Labs

Stay in the loop on today's most pressing cyber security matters.

Cyber Resilience

Our Cyber Resilience collection gives you access to Aon’s latest insights on the evolving landscape of cyber threats and risk mitigation measures. Reach out to our experts to discuss how to make the right decisions to strengthen your organization’s cyber resilience.

Employee Wellbeing

Our Employee Wellbeing collection gives you access to the latest insights from Aon's human capital team. You can also reach out to the team at any time for assistance with your employee wellbeing needs.

Environmental, Social and Governance Insights

Explore Aon's latest environmental social and governance (ESG) insights.

Q4 2023 Global Insurance Market Insights

Our Global Insurance Market Insights highlight insurance market trends across pricing, capacity, underwriting, limits, deductibles and coverages.

Regional Results

How do the top risks on business leaders’ minds differ by region and how can these risks be mitigated? Explore the regional results to learn more.

Human Capital Analytics

Our Human Capital Analytics collection gives you access to the latest insights from Aon's human capital team. Contact us to learn how Aon’s analytics capabilities helps organizations make better workforce decisions.

Insights for HR

Explore our hand-picked insights for human resources professionals.

Workforce

Our Workforce Collection provides access to the latest insights from Aon’s Human Capital team on topics ranging from health and benefits, retirement and talent practices. You can reach out to our team at any time to learn how we can help address emerging workforce challenges.

Mergers and Acquisitions

Our Mergers and Acquisitions (M&A) collection gives you access to the latest insights from Aon's thought leaders to help dealmakers make better decisions. Explore our latest insights and reach out to the team at any time for assistance with transaction challenges and opportunities.

Navigating Volatility

How do businesses navigate their way through new forms of volatility and make decisions that protect and grow their organizations?

Parametric Insurance

Our Parametric Insurance Collection provides ways your organization can benefit from this simple, straightforward and fast-paying risk transfer solution. Reach out to learn how we can help you make better decisions to manage your catastrophe exposures and near-term volatility.

Pay Transparency and Equity

Our Pay Transparency and Equity collection gives you access to the latest insights from Aon's human capital team on topics ranging from pay equity to diversity, equity and inclusion. Contact us to learn how we can help your organization address these issues.

Property Risk Management

Forecasters are predicting an extremely active 2024 Atlantic hurricane season. Take measures to build resilience to mitigate risk for hurricane-prone properties.

Technology

Our Technology Collection provides access to the latest insights from Aon's thought leaders on navigating the evolving risks and opportunities of technology. Reach out to the team to learn how we can help you use technology to make better decisions for the future.

Top 10 Global Risks

Trade, technology, weather and workforce stability are the central forces in today’s risk landscape.

Trade

Our Trade Collection gives you access to the latest insights from Aon's thought leaders on navigating the evolving risks and opportunities for international business. Reach out to our team to understand how to make better decisions around macro trends and why they matter to businesses.

Weather

With a changing climate, organizations in all sectors will need to protect their people and physical assets, reduce their carbon footprint, and invest in new solutions to thrive. Our Weather Collection provides you with critical insights to be prepared.

Workforce Resilience

Our Workforce Resilience collection gives you access to the latest insights from Aon's Human Capital team. You can reach out to the team at any time for questions about how we can assess gaps and help build a more resilience workforce.

More Like This

View All
View All
Subscribe CTA Banner