In her 15 years with Interline Brands, Inc., a leading direct marketer and distributor of broadline maintenance, repair, and operations products, Annette Ricciuti has watched the company grow from $120 million in revenue to more than $1.5 billion, and from 300 employees to more than 4,100 employees. This growth was due in part to organic sales growth, but mergers and acquisitions also played a role. As vice president of HR, it is Ricciuti’s charge to integrate and assimilate each new company into the fold.
Since Interline has turned its attention to customer- and employee-centric companies, the integration process has become much more delicate, and HR must be sensitive to the needs of the new associates as well as the existing workforce. “The employees benefits arena has become very complex and challenging,” says Nick Tafaro of CHB Group, Interline’s employee-benefits insurance consultant. “Annette does an excellent job in balancing the budgetary constraints that all companies face as well as meeting the needs of the Interline employees. It’s more difficult now than ever.”
1. Understand the Acquisition Scenario
Evaluate the company you are integrating to determine the best plan of action. Factors such as size, sophistication and complexity of existing HR infrastructure, location, and customer interaction will affect the measures you take and how quickly you will be able to assimilate the acquisition. For Ricciuti, the acquisition process will follow one of three scenarios: total absorption under the parent company, a 24-month graduated integration, or retained independence.
2. Leave anything that touches the customer alone
At Interline the customer is the barometer for accountability. “When we’re trying to merge an acquisition, we leave anything that touches the customer alone,” Ricciuti says. “Anything from the back end is consolidated into the infrastructure we have today. Interline doesn’t have a mission statement so much as we rally around the customer. We take great pains when acquiring a company to understand their employees, what their base is, and what we need to do to insulate the customer from any harm. We also are very concerned about their employees as they touch the customer.”
3. Collaborate with leadership and senior management in the field
Leadership from the field can be your biggest ally in a smooth assimilation. “Acquisitions and integration don’t happen in a vacuum,” Ricciuti says. “You want partners in that process to make it as smooth as possible. Meet with leaders who are responsible for the people in the field—the VP of distribution, sales leaders, and GMs—where the majority of change will be felt.”
4. Be mindful of the culture
Transparency about your plans is key in approaching integration with a new company, and employee engagement is key. “You can’t hold your cards close to your vest,” Ricciuti says. “This is where management will have a feel for how you’re going to be received and each side’s interests. Understand their philosophy before you take over. Make sure you have their buy-in before the deal is done.”
5. Roll out changes face-to-face with executives first to ensure everyone is clear on the message
Ricciuti recognizes that policy changes will affect employees differently depending on their position. The bulk of her clients are hourly associates in distribution and transport, so she must be sensitive to what they can afford, what changes they can realistically and comfortably absorb, and how that news will be presented from HR and management. “This year we made some significant changes to our benefit plans, and as a result we had to employ the help of our leadership team to assist with the rollout of the changes,” she says. “We explained how the change would affect their employees and how they needed to formulate their strategy to pass that information along. We take great pains in laying out the road map in order to avoid conflict and get buy-in.”