Navigating Mergers and Acquisitions in HR Tech

Recently, several significant mergers and acquisitions in the HR-technology market have made news. From Ultimate Software acquiring PeopleDoc to Saba Software acquiring Lumesse (and Halogen Software before that) to the latest and largest announcement that SAP will acquire Qualtrics for $8 billion in cash, there has been no shortage of wow-inducing developments in HR tech.

But while these announcements certainly produce headlines and get analyzed for their impact on share prices, market share and the software company’s long-term futures, we often tend to overlook one really important constituency that is impacted by these M&A events: the customers of the company that gets acquired.

While the M&A announcements and subsequent comments from executives of the acquiring company usually talk a little about what the future may hold for the acquired product and its customers, there definitely can be some uncertainty about the future direction of an acquired company and product set. For customers of those products, it is important to understand what an M&A event may mean for them, and to be as prepared as possible for any impacts–including changes that can significantly alter the customer’s HR technology platforms and future direction.

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Even if the acquiring company does plan to re-platform or fold the acquired technology and products into its existing product suites, these projects are lengthy and complex (and sometimes never actually get completed). Plus, these acquired companies usually have more revenues and existing customers themselves, and the acquirer will want or need to keep growing both revenue and customer count to help pay for the acquisition itself. Essentially, the larger the company getting acquired, the longer runway existing customers have before being forced to make decisions about changing technology providers. But the bottom line is that HR leaders should work their HRIT and IT staff to have an up-to-date understanding of the HR-tech footprint at the organization and develop a rough plan of how to proceed if important partners and providers seem like acquisition targets.

With an extremely vibrant and growing HR-technology marketplace, it seems likely and even inevitable that the M&A activity in HR tech will continue. It is important for HR leaders to be prepared for these events and ensure that your interests as a customer and an organization are top of mind for the acquiring provider. And if you are in search of new or replacement technology solutions, make plans to attend the HR Technology Conference in Las Vegas from Oct. 1  through Oct. 4, 2019, where all the important HR-technology solutions will be on display. You’ll also be able to see and meet with leaders from these innovative providers and find the next set of HR-tech solutions to drive your organization forward.

Steve Boese
Steve Boese is HRE's Inside HR Tech columnist and chair of HRE’s HR Technology Conference®, which will take place Sept. 13-16, 2022, in Las Vegas. He also writes a blog and hosts the HR Happy Hour Show, a radio program and podcast. He can be emailed at sboese@lrp.com.

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