What to expect when your HRMS vendor is bought out by a larger company

Mergers and acquisitions happen all the time, and if you’re employed by the bought-out company then your major concern is probably job security. However, what if you’re a customer? What if the acquired company is your HRMS vendor? No matter how happy you’ve been with the product and the support service you’ve received, that could all be about to change, depending on the circumstances.

Products

Your basic question is, will my HRMS still be supported? And the answer is mostly determined by the reason for the takeover. It’s possible that your HRMS is the reason for the purchase, the acquiring company simply sees a profit in adding it to their own product range. In that case, the likelihood is that not only will they continue to sell your HRMS, they’ll continue to offer maintenance and updates, and honour the contracts and service level agreements that you have with them.

However, companies are also acquired for their client list, in which case, the ultimate goal may be to sell you something else. And if the purchase was made simply to acquire infrastructure, a particular piece of technology, certain key people, or some other business asset then your HRMS suddenly seems much closer to the bottom of the new owner’s list of priorities.

Find a replacement HRMS to suit your company using this completely up-to-date HRMS vendor directory

People

What the new owner decides to do with the employees of your HRMS vendor is also important. After all, they may keep your system on their books, even continue to sell it, but if they don’t retain the key personnel who understand and update it, then expect to see the level of service you receive take a dive.

Hopefully, the acquiring business is aiming to keep its new knowledge base intact and the expertise you need to keep your system up and running will still be available to you.

Location

The chances are that you don’t have too much face-to-face contact with your HRMS vendor; at least, not once you’ve bought the system and implemented it in your organization.

However, if locality was one of your decision criteria when selecting your HR technology, be aware that one outcome for an acquired company is an enforced move to wherever the new owner is. Another is for your vendor’s premises to be closed down as technology, people and other assets are absorbed.

To return to the first point: the key question really is why did the acquisition take place? If, as is common in software circles, the acquiring company wants to add the acquired company’s products to their portfolio then the impact may be minimal. If your HRMS is a still part of a viable and valued product line then it’s an asset to the new owner, and assets are supported. If your information suggests that it’s more of an asset absorption exercise then it may be time to start looking for a more stable alternative option.

author image
Dave Foxall

About the author…

Dave has worked as HR Manager for the Ministry of Justice for a number of years, he now writes on a broad range of topics including jazz music, and, of course, the HRMS software market.

author image
Dave Foxall