Whether it’s a merger and acquisition or larger carve-out, managing the deal domestically is time-consuming. However, when the transaction crosses borders, the complexity reaches a new level. One of the biggest obstacles for the buyer is determining how to onboard transitioning employees in countries where their company does not have an established entity and aren’t registered to run payroll.
The time, money, and expertise needed to negotiate workarounds, set up entities, and navigate employment law can cause three main challenges to crop up:
- Employee Readiness on Day One
If business entities are established and all new employees are on payroll, the first day after deal close will go off without a hitch. However, getting there is another story for the buyer that decides to manage this process on their own. Often, time and money cause the acquiring company to leave employees with the seller. Even when willing to pay additional transitional service agreement (TSA) costs, it only pushes the problem down the road. The buyer needs a long-term, sustainable plan for setting up transitioning employees at deal close and beyond.
- Benefits Stability
In addition to getting paid on time, newly acquired employees need the assurance of comprehensive, continued benefits coverage. From holidays to bonuses to health care, it’s difficult to understand what the standard is from country-to-country. The buyer needs to establish a location-specific benefits strategy to keep employees whole, and a means to implement the global benefits plan of choice.
- Communication to New Employees
Managing the communications to newly acquired employees during the transition period is critical to
long-term retention. Problems like poor communication strategies, insufficient knowledge on benefits mapping, or lack of risk management on employment contracts can quickly cause issues. The buyer needs a clear communications strategy to help alleviate apprehension and promote trust during the transitional period.
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