TUPE profit checklist

Welcome friends, financiers and investors!

This week we look at the art of the profitable TUPE transfer and define a headline checklist to avoid the fate of the average transferee whose profits tumble approximately 3% after the deal is done - Deloitte (1)

?‘gaps in transaction execution (for example, change management, communications, and employee transition activities) can play a significant role. When acquiring talent is a main motivation for M&A deals, it seems clear that focussing on the employee experience through the transaction could play an important role in realising value.’

Fact is we can’t get away from the simple truth that people are the business’ most valuable asset and they can be the driving force behind corporate success or corporate failure.?

‘Your mergers and acquisitions integration approach must follow crucial steps'        

This newsletter focuses on helping TUPE managers delegate the people aspects of a successful post TUPE integration.

According to Ernst Young, ‘Your mergers and acquisitions integration approach must follow crucial steps to help enable value creation from transactions. Determine the value drivers, guiding principles and mergers and acquisitions integration strategy.' (2) Appointing and supporting the right leaders, team, governance structure and activities are critical elements to capture M&A deal value.

Playbooks are out (3) and continuously improving value delivery processes following the Agile strategy methodology is in.?

So here goes:

The delegator’s checklist for Agile people integration

Part 1: Good housekeeping wins lots of Brownie points.

• Use the ELI data to set up personnel files for incoming employees.?
• Arrange onboarding according to needs rather than a one size fits all. This can be achieved by developing employee personas and designing onboarding sessions for homogenous groups.
• Employees come to work in return for pay on agreed terms and conditions. Quite apart from the fact that workers are legally entitled to a copy of their contract; they are also likely to feel a sense of partnership and play by the rules if they have a personal copy of the paperwork.
• Ensure that pay and payslips are accurate, on time and accessible for all the workforce not just the techies who log onto the employee app. Some older workers don’t use email.??
• Facilitate individual migration to new systems to honour pre-booked holidays and similar.

Part 2: Inspire group problem-solving and win hearts and minds from the start.??

• Expect problems to arise. It's a learning opportunity.
• Be mindful of the human’s natural resistance to change and not everyone will be a good fit.??

Find champions to lead employee working groups to identify areas for improvement and to work together to co-design solutions. This is a great way to gain return on labour investment and generate a sense of belonging. A win-win situation. (4)

Part 3: Set up teams responsible for TUPE transfer focused workstreams

For example:

• Recruitment team: to design a match between the tactical plans and reality across the business. Restructuring may be necessary - take legal advice so you are not on the back foot.?
• Training and development team: to design programmes capable of meeting the expectations of all stakeholders.
• Compliance team: that understands how to work cross-functionally to get management buy in for organisational risk reduction during the transfer and beyond.
• Systems team: to design a means to capture incoming data efficiently and without over burdening management with double entry requirements.
• Communications team: to explore the benefits and opportunities for 2 way dialogue.

Part 4: Influence a positive culture

‘Getting one culture right is challenging; the complexity involved with integrating multiple cultures takes it to another level. When multiple cultures come together, they can merge, they can co-exist, or one can dominate. Making sure the intended culture wins out is a big task.’ (5)

• Culture spreads organically and no matter how many on-message communications your comms department sends to your employees; the majority of your people will never feel as strongly about the company's vision as they do about their own welfare and that of their family’s welfare. Do what you have to do to balance competing interests and embrace the power of a positive employee experience.
• As relationships between groups and communities are formed, different cultures emerge in pockets across the business. These pockets of culture can be influenced and stimulated, but arguably they cannot be controlled. They are layered and complex.

Create an environment of trust, inclusion and psychological safety to encourage authentic relationships to flourish - without trust and equality there cannot be a mutually rewarding corporate relationship.?(6)

• Prioritise time for the right things. Don’t allow operational demands to bully managers into making shortcuts because this will undermine the human centric culture you are trying to nurture.

Part 5: Toolbox items you will need

A North Star: a compelling focus to guide people to the designated destination (This North Star must serve the company’s vision).? (7)

• An environment where psychological safety flourishes.
• A scalable and responsive plan that you are prepared to revise and re-shape.?

A committed team with a passion for inclusive change and designing meaningful employee experiences. (8)

Love and best wishes for a profitable integration

#TUPEintegration #corporatefinance #TUPEtransfer #investorvalue #howtodelegate #compliance #employeeexperience #agilehr #scalablelearning #corporateculture #mergersandacquisitions

?1.Deloitte Why is it important to consider employee experience in M&A. https://www2.deloitte.com/uk/en/pages/consulting/articles/why-is-it-important-to-consider-employee-experience-in-m-and-a.html

2. Ernst Young https://www.ey.com/en_gl/mergers-acquisitions/nine-steps-to-setting-up-an-m-a-integration-program

?3. Dealroom https://dealroom.net/faq/post-merger-and-acquisition-m-a-integration-process#faq-10

4. John Hagel, Scalable Learning. Notes that leaders need to ignite the "passion of the explorer" in one's work force in order to keep the best people stimulated to generate innovative ideas.

?5. Dale Carnegie Mark Merone, Here’s Why It’s So Hard to Maintain a Strong Corporate Culture Today

extract ‘Senior leaders from “culture champion” (CC) companies in our survey — the subset of companies with particularly successful cultures — were more concerned about the challenge of cultural integration following a merger or acquisition than other leaders (38% vs. 28%).’

6. ?According to McKinsey;s ‘Five Fifty - Is it Safe’, 89% of employees think psychological safety is essential to a functioning workplace. Harvard’s Amy Edmondson coined the term “psychological safety” in a 1999 journal article exploring its relationship to team learning and performance.https://www.mckinsey.com/featured-insights/leadership/five-fifty-is-it-safe

7. ?https://www.dhirubhai.net/pulse/what-your-ma-deals-north-star-tim-morton/

8. ?https://www.aihr.com/blog/design-thinking-disrupting-hr/