What to Do When Your HR Tech Vendors Merge or Get Acquired

March 11, 2020 by George LaRocque

What to do When Your HR Tech Stack Vendors Merge or get Acquired

Since the start of 2020, we’ve averaged more than one HR technology merger or acquisition per week, and we’re not expecting the pace to slow down any time too soon. Core HR and payroll platforms, including recruiting and talent management suites, tend to invest their development resources in their core focus (payroll, applicant tracking, learning, and more). HR solution providers extend their capabilities by integrating with partners or acquiring other vendors to offer customers more capabilities, or to gain additional revenue in their core market focus.

Understanding Your HR & Recruiting Tech Stack

Most companies build out their HR technology, starting with core HR and payroll solutions. Then, they add recruiting and talent management suites and integrate specialist or “best of breed” applications. HRWins’s research found that businesses with less than 3,000 employees are adopting an increasing amount of HR technology. Between mobile apps, best of breed applications, and platforms, it’s not uncommon for employers to be left using 16 to 24 different HR technologies. Factors like the size of your business, number of locations, and employee demographics tend to correlate directly to the number of systems you adopt to find, hire, pay, and retain your talent.

Companies extend considerable effort to integrate or connect their HR systems. HRWins found that the integration of HR technologies has been one of the top two frustrations of HR tech customers for three years running. While more open application programming interfaces (APIs) have made integrating technologies easier, they still aren’t exactly an “easy button.” The resulting array of applications used in HR is what many refer to as the “HR tech stack.”

So, what happens when one of the systems you’re using merges with another firm or gets acquired? What’s the impact on your HR tech stack that you’ve integrated and adopted? 

The Impact of an HR Tech Acquisition or Merge

When you get the announcement that your key HR tech solution is becoming part of a broader offering, don’t panic. The process of two businesses coming together and merging products can take twelve months or longer. And, the good news is that they want to retain your business as much as you don’t want to disrupt the HR tech stack you’ve curated and built over time. 

What to do When Your HR Tech Vendors Merge

First, take a look at your contract. Get an understanding of how long you have before contract renewal and just what responsibilities the vendor has to you concerning supporting the HR solution you licensed. 

Next, get answers to a few key questions from your vendors about their plans for the product and company. Consider the following questions:

  • Will they remain committed to supporting the product you’re using?
  • How tightly will the products be integrated? 
  • Can you continue to use your product in its current  form (as stand-alone)? 
  • Are there any benefits or financial incentives for you to consider using the new, larger platform? Maybe this is an opportunity for you!
  • What is their overall timeline for rolling out any changes?

The truth is, most customers find that mergers and acquisitions actually result in greater customer value and care with added resources in areas like product support and client services. So remember, don’t panic. If you have the right solution vendor, you should feel confident in their ability to continue to provide for you.

About George LaRocque
George LaRocque, Principal Analyst and Founder of HRWins, has more than 25 years in the Human Capital Management (HCM) industry. A former practitioner in Talent acquisition, Talent management and HR, he turned technology vendor executive for some of the market’s largest brands. Now he’s an HCM market analyst and advisor focused on users and developers of HR technology. He is the publisher of HRWins research and reports on workforce trends and related innovation in tech. He helps employers understand the trends that are impacting their workforce today and in the future. He helps HR service providers and technology vendors with a unique perspective on HR customers and the changing workforce.

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