Integrating total rewards effectively in M&A 

Business woman talking to her colleagues during a meeting in a boardroom. Group of happy business people working together in a creative office.
Rewards are deeply personal as employees rely on them to pay bills, access medical care, prepare for retirement and more. Continuity of rewards during an M&A transition helps retain essential talent and fosters a positive employee experience, which is imperative for driving deal value and unlocking business synergies.
70% to 90% of M&A transactions fail to deliver the expected value.¹
Kenny G.

It starts with a people-centered approach

Nearly half of deals fail to deliver on the promised value due to lack of attention to people issues.

Further, two-thirds of post-close issues that hamper value creation are people-related. Too often, the lack of a people integration strategy jeopardizes the success of a deal — and a successful strategy starts with rewards.

Figure 1. Outcomes due to failure to address workforce issues

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Outcomes due to failure to address workforce issues. If an integration plan is adjusted – 25%, Integration timing adjusted 24%, deal failed to meet the financial targets – 17 %, deal not complete, 17%, deal pricing, 16%, other 1%. 

How to get an “A” in rewards integration

To successfully integrate total rewards into your people strategy, Mercer recommends prioritizing the following three components:

  1. Aligning with business synergies.
  2. Addressing affected rewards programs.
  3. Accounting for dependencies.

This approach allows stakeholders to realize the maximum value of the deal by capturing the desired business synergies while ensuring that crucial talent gives the integration an “A.”

¹ Kenny G. “Don’t Make This Common M&A Mistake,” Harvard Business Review, March 16, 2020, available here.
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