activpayroll | Beyond Finance: The Critical Role of People in Mergers and Acquisitions
While mergers and acquisitions are financially driven, success depends on people, culture and integration. activpayroll emphasises early consideration of leadership, engagement and communication, supporting employee retention and collaboration. By focusing on people alongside systems and processes, organisations can achieve operational stability, cultural alignment and realise the full value of acquisitions.
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While mergers and acquisitions are often driven by financial strategy, their long-term success depends on people, culture and effective integration.
By Andrew Philp, CFO at activpayroll
Andrew Philp is Chief Financial Officer at activpayroll, where he leads financial strategy and supports the company’s international growth. As part of activpayroll’s expansion across Asia Pacific, he played a key role in the acquisition of Malaysian payroll provider ProPay Partners, working closely with teams in Kuala Lumpur and across the region to support integration and regional growth. More recently, activpayroll strengthened its global capabilities through the acquisition of LIMES International, a Netherlands based global mobility, tax and HR advisory firm. With a background in finance transformation and advisory, including senior roles at KPMG in the UK and Sweden, Andrew brings extensive experience in global business operations and strategic growth initiatives.
Considering The People Agenda Early
Mergers and acquisitions are often viewed through a financial lens. Organisations pursue them to accelerate growth, expand into new markets or strengthen their capabilities. While the financial rationale may be clear, the long-term success of any acquisition ultimately depends on people.
Financial models can identify efficiencies and growth opportunities, but those outcomes rely on teams across both organisations working together to deliver change.
In my experience, the strategy may shape the deal, but people and culture determine whether its value is realised.
Setting The Foundations
Before any acquisition takes place, leadership teams need clarity on the deal thesis. Why are we acquiring this business and what value do we expect it to create?
Alongside validating the financial case, organisations should also consider the people dynamics within the business being acquired. This includes leadership capability, organisational maturity and the cultural characteristics that underpin its success.
Identifying key individuals is particularly important. Many organisations rely on people who hold critical knowledge or maintain strong client relationships. Retaining and engaging those individuals can significantly influence the success of integration.
Communicating Through Uncertainty
Acquisitions inevitably create uncertainty for employees. When communication is limited or delayed, anxiety can quickly spread across teams.
Clear and consistent communication from leadership is essential. Employees need to understand what is happening, why the acquisition is taking place and what it may mean for them.
Even when all the answers are not yet available, regular updates help build trust and maintain engagement. Providing opportunities for open dialogue also allows employees to ask questions and feel involved in the process.
Integration Begins with People
Once a deal completes, integration becomes the focus. This is where the success of an acquisition is often determined.
Transformation programmes typically involve three core elements: people, systems and processes. While systems and processes can be aligned through structured programmes, the first interaction between two organisations is always people.
Early integration should therefore focus on collaboration. Bringing teams together, encouraging cross-organisational working and identifying early successes can help create momentum and build confidence in the new organisation.
Measuring Success Beyond Financial Performance
While financial outcomes remain important, organisations should also pay attention to employee engagement during integration.
Engagement surveys and feedback mechanisms can provide valuable insights into employee sentiment and highlight areas where additional support may be required. Strong engagement is often reflected in consistent service delivery and stable operational performance.
Where performance begins to decline, the underlying issue is frequently linked to people rather than systems or processes.
Direction, Alignment and Commitment
Successful integrations tend to share three common elements: clear direction, strong alignment and genuine commitment.
When leadership provides that clarity and actively engages employees throughout the process, teams are far more likely to embrace change and contribute to the success of the acquisition.
Ultimately, every strategic objective within a merger or acquisition will be delivered by people. Organisations that recognise this early and place equal emphasis on culture and engagement are far more likely to realise the full value of the deal.
