Why Consolidating HR Systems is Important in mergers and acquisitions? 4 success tips

In a merger or acquisition, the migration and consolidation of systems that keep information related to human resources are often not given much importance compared to other aspects. But overlooking process integration and HR data can prove to be damaging. 

A reliable HR system can help in managing employee communication. They facilitate the maintenance of the entire employee communication history. Any adverse impact on accessing HR data can directly impact the perception of the merger, new entity prospects, and the new bottom line. 

Those who make it a point to integrate HR information systems (HRIS) to ensure smooth operations should pay attention to the following.

Check That You Retain the Valuable Assets

Often, merging organizations makes it very difficult to comprehend the actual price of your company’s staff. You need to properly establish an operating expense budget when you evaluate your company’s human capital. 

To understand the costs and options, properly assess the HR infrastructure of each company before you consolidate systems. Try to incorporate them with your accounting systems so that reporting becomes convenient. 

It also establishes a human resource records system that is ideal for your organization at present and in the future.

The systems for human resources that you have will allow you to predict compensation costs and pay to retain the talent you have newly recruited.

Make Sure That Your Systems Permit Future Growth

After an acquisition or merger, endeavor to look at your system consolidation and integration from the future perspective. Some questions that you can ask yourself include:

  • Can the systems scale to deal with anticipated growth? Don’t fall into the assumption that the HR processes of an acquirer are superior and should prevail.
  • Should systems of both organizations be swapped for a new third-party solution? In this case, decide whether you need an array of best solutions or HR capabilities that a single vendor provides.
  • Do you need the advice of a qualified consultant who can also serve as a peacemaker or a referee in balancing the HR ecosystems? A system’s integrator or a managed service provider who knows about specialized HRIS can enable you to decide on the best solutions.

Ensure Data Accuracy

After you’ve decided to migrate your HRIS, you might find a large amount of employee information. Leverage it by establishing how it will inform the decision-makers of your organization. 

There’s no need to keep all the data. But check that the data in the new systems is accurate and consistent. There will always be some amount of information that you have to retain lawfully. 

But if this data is not accessed regularly, keep it distinct from the one you utilize for daily operations. After the data is scrubbed, synchronize a part of the information from the HRIS to different systems like payroll. It will keep the data consistent.

Make Sure to Be Compliant

If you are migrating the data across jurisdictions, focus on data sovereignty. Before commencing a migration, your organization should have answers to these questions.

  • Where is data at present, and where is it heading?
  • What data is required to move?
  • The level of your data and how you will protect it.
  • What will happen to the data when it’s in transit? How should it be treated?
  • What’s the process of the decommissioning of the old infrastructure?
  • Can you automate the migration process to minimize human error?

Optimized HRIS facilitates an organization to become more efficient. An excellent HR system captures all employee information and maintains their complete work history. As you go on planning and designing the HR systems of your new company, you need to assess the numerous ways they affect the lives of your employees.