The history of business is littered with consolidation manoeuvres, mergers and acquisitions. Until very recently, unforeseen, Barbarians At the Gate-inspired, dawn-raids, Saturday night specials, and poison pills were par for the course. Most current M&A activity, however, is mundane and prosaic; shorn of the sound and light razzmatazz of the early days of Nabisco-styled leveraged buyouts.
Businesses are in a continuous quest for synergy, value additions, and scalability. A successful M&A strategy can open up new markets, revenue streams, product portfolios, customer segments and brand consolidations. The merger, then, of eight different business entities, with a total employee- base of over 11000, into one homogenous entity was an exercise of gargantuan proportions with equally enormous challenges for payroll processing, data integration, policy standardization, process-streamlining, resource-mapping and report generation.
The challenge lay in migrating thousands of existing employees into the newly formed legal and organizational structure. Role and resource mapping, the synchronization and ratification of salary and pay grade, the collation, corroboration and restructuring of existing HR policies, processes and documents, and the transfer of employee data from the old disparate, stand-alone systems, into a newly-created, unified payroll process, was a daunting task affected by several variables and factors. Existing employee records had to be transferred to the new entity, as well as data about gratuity, provident fund accruals, tax debits and salary credits. Old data had to be verified and sanitised, data about leave, attendance and timesheets had to be integrated, synthesized, scrutinized and vetted. For gratuity calculations, old accumulated accruals had to be reprocessed, as well as revised accruals calculated after the employee was assigned a new role, employee ID, and department. Compensation data, investment data, expenses and reimbursements also underwent a complete overhaul and re-jigging. Since tax deductions would be filed by the newly created entity, any surpluses or shortfalls in tax deductions also had to be accounted for and squared off.
Routine organizational processes like onboarding and separation were also brought under the ambit of the harmonization; and were overhauled and repurposed to align with the new entity’s larger organizational goal and strategy. In addition, salary structures were synthesized, rationalized and standardized. The newly-created entity had to embody the best parts of the erstwhile units from which it was crafted, but also incorporate new insights, efficiencies, learnings, competencies and best-in-class practices. Consequently, employee earnings and perquisites had to be revalued, but substantial revision and restructuring had to ensure that employees did not witness drastic cuts and changes in their salary structures.
In view of the multiple and wide-ranging compulsions, constraints and parameters, AscentHR created a plan covering all scenarios and ramifications – including data transfer, information filings with statutory compliances agencies and due processes and best practices culled from the eight erstwhile organizations. We created multiple platforms to cover all actionable parameters. We also created a help desk to aid and amplify employee awareness; assisting all employees with online PF transfers, creating auto-transfer modalities for declaring previous employment income to the new entity, exhaustive query redressal systems to acquaint and familiarize employees with the new vendor and systems. Finally, we created a highly searchable employee database which could be sorted on the basis on numerous parameters like tax declarations, provident fund accruals, and investments.
We also held a mock-runs and tax workshops to educate employees about salary credit and pay slips, and to raise awareness on the impact of increased take-home salary credits, as a result of ESI and professional tax recalculations. Exhaustive and extensive checklists were prepared to ensure a seamless movement of data and people from one entity to another. We also created a data trail, creating and updating reconciliation reports that allowed the customer a quick, dashboard-level view of the integration and migration. A continuous feedback loop with major client stakeholders also ensured that there was no slippage, oversight or omission.
This dual approach, of sorting, integrating and transferring data while simultaneously engaging with, and hand-holding anxious and wary employees, allowed us to successfully help the customer transition from being merely the sum of many moving parts to being a powerhouse in the media, information, technology and research space. Multiple Indian industries are experiencing a massive and broad-based wave of consolidation, and portfolio realignment. In its thrall are millions of ordinary and disoriented employees, and managements who struggle to hit the ground running, even as they adapt and incorporate unfamiliar paradigms of functioning, and business-as-usual.