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Mergers & Acquisitions: What are the Payroll and HR Ramifications?

June 1, 2017 | posted by Abacus Payroll
Payroll and HR in a M and A

When undergoing a merger or acquisition, your company has thousands of variables to consider; with all that’s going on, it’s easy to see how something as routine as payroll might get left out of the equation. Whether you’re scrambling to bring your payroll schedule back up to speed after a big merger or you’re just looking for some tips, here’s how to handle payroll and HR during a merger or acquisition.

Payroll Maintenance

The first thing you should do after acquiring or merging with another corporation is make sure nobody missed out on a paycheck. Especially if the event occurs during an odd time of the month, you’re bound to have a few employees slip through the cracks. To combat this problem, urge your employees to come forward if they encounter any unusual or faulty payroll, then address the issues as they arise.

Of course, in a perfect world, your payroll schedule will synchronize with the other company’s payroll schedule, and you won’t have to change either company’s pay dates, payroll frequencies, or the like. Unfortunately, this likely won’t be the case, which means some employees may end up going several weeks without pay in worst-case scenarios.

The best way to counteract this process is to introduce an abnormal pay period in the middle of the current one in order to get everyone on the same page, and then resume your normal payroll. Again, this may not be possible given the restrictions under which you’re operating—the way you handle this situation will very much depend on the variables of the merger or acquisition itself.
Speaking of which…

HR’s Role in a Merger or Acquisition

Aside from facilitating the majority of business interfacing during the acquisition or merger, your human resource department will have its hands full in the days and weeks after the event. Be sure to inform them that they’ll be keeping track of both the old and new employees while doing general damage control.

For starters, your HR department will need to bring new employees up to speed with company policies, as well as the accompanying headache of documenting and processing each of those new employees’ payroll specifics. To make this process a little easier, make sure any incoming employees have their W-2s and other relevant information on hand before the acquisition or merger is complete.

Another task your HR department will need to address is that of damage control. Invariably, there will be instances of your company’s culture clashing with that of the other company; you’ll also probably run into issues wherein leadership roles and work distribution need clarifying. These tasks will ultimately fall to the HR department.

Finally, your HR department will have the dubious honor of handling lay-offs. Since this is an inevitable byproduct of merging with or acquiring a new company, HR must guide now unnecessary employees through the exit process. Expect to plan exit interviews, severance package details, and employee replacements on top of everything else.
Need More Assistance with Advisory Services During Your M&A?
Acquiring or merging with another company is one of the most stressful and hectic experiences a business can encounter even though it is a step of tremendous growth. We know that managing your payroll during this time will exacerbate your stress, so let us help—call Abacus Payroll at (856) 667-6225 today to find out more about our payroll services!

About the Author: Abacus Payroll

Abacus Payroll, Inc. is a leading provider of payroll solutions for businesses of all sizes. Whether yours is a family-owned small business or a national corporation, we provide payroll, tax and other financial services on time and at an affordable price. Unlike other payroll providers, Abacus Payroll will assign your very own payroll specialist who will understand your payroll needs inside and out. So no more speaking to a different person each time, no more sitting on hold for hours and most importantly no more missed deadlines! Contact us today to see how we can help your business. You can count on us.