Paystone CEO Tarique Al-Ansari explains why you should include HR early in acquisitions
June 21, 2021 | Jessica Galang
In our interview with Tarique Al-Ansari, CEO of London, Ontario-based Paystone, he detailed the important lessons learned after undergoing five acquisitions, including the importance of a corporate development team and how to align acquisitions with a company’s vision.
While these are important business considerations, another aspect of the acquisitions Al-Ansari wished he’d included early on in these deals is HR.
“When we started the business, I was wearing many hats, and one of them would be the chief HR officer or the chief people officer,” Al-Ansari says. “Then I realized really quickly that was one of the mistakes I made was that we really needed to invest heavier in HR including an HR exec on the leadership level.”
In this interview on Paystone’s approach to hiring and onboarding talent, Al-Ansari talked about the challenges in acquiring companies without sufficient HR support, ensuring you hire at the right stage and competing with big cities when hiring in London.
How HR plays a role in acquisitions
With Paystone’s previous success scaling a strong organic team, Al-Ansari felt that the company was capable enough to integrate new teams from acquired companies. The acquired companies, including their talent, were a great fit in the business, so he didn’t integrate the HR practices that would make the transition process smoother early enough in the process.
“Who you retain and who to part ways with has to also be driven by our values culture. “This is why investing more in HR is a strategic goal for Paystone.”
“Part of the strategy for our acquisitions is doing a complete integration into the business and into the organizational chart,” he says. “I believed that if I have good functional VPs, that they’d absorb their respective teams from the acquired targets, and complete an integration successfully.”
However, as new teams start to work together, Al-Ansari found that a lack of clarity on job functions can lead to miscommunication. With a strong HR foundation, an HR leader could have
helped us during due diligence to come up with a clear plan post-closing for integrating targets and the reporting structure of the combined teams.
HR teams can also help establish rapport among new and existing team members. When building a startup, Al-Ansari says that it’s easy to build relationships with new team members since they are hiring at a more manageable pace.
“When you just show up one day and you just added 20, 30 or 50 people, it's so hard to build relationships without a solid HR team.”
Acquiring an entire company or team, however, can present unique challenges when startups suddenly have an influx of people. “When you just show up one day and you just added 20, 30 or 50 people, it's so hard to build relationships without a solid HR team, and to be able to assess strengths and weaknesses.”
Al-Ansari is grateful for his very existing HR resources, who despite being thin, went above and beyond to do the best they can. To support the next phase of growth, Paystone is in the process of revamping their HR department, including a recently hired Senior Vice President of their newly minted HR team, People Experience — who Al-Ansari is very excited to have join his executive leadership team. He has also provided more resources to the HR team so that they could focus on integrating employees after acquisition, while also supporting existing employees. Now, his HR team is better equipped to make the acquisition process smoother for all involved. There will be a major focus on learning and development to grow the skillsets of existing and new team members, as Paystone is planning a rapid expansion plan to support their growth strategies.
The acquired team needs more one-on-one assessments to understand how the acquisition impacts their career, and to excite them about the future growth opportunities,” Al-Ansari says.
Involving the HR team early on can also ensure that new acquired team members fit the company’s values, and assess their growth potential not just how their resumes skills fit into the job.
“For example, if somebody doesn't like helping others. For us, that's not a good fit. And it doesn't matter if they are the best artisan in the world,” Al-Ansari says. Not assessing for fit is another mistake Al-Ansari learned from, as it’s difficult to assess whether candidates are a fit in an acquisition with many people compared to organic hires over time.
“Who you retain and who to part ways with has to also be driven by our values,” says Al-Ansari. “This is why investing more in HR is a strategic goal for Paystone.”
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Attracting talent in a smaller town
Attracting tech talent to London, which is smaller than major, nearby tech hubs like Toronto, Ottawa and Waterloo, has been a challenge in the past, says Al-Ansari. However, this is where acquisitions can help, as acquired companies in big cities like Montreal and Vancouver can act as satellite offices.
With a model where people can work from everywhere, Paystone’s geography is no longer a challenge, as it’s easier to attract world-class talent.
“Now with COVID, it doesn't matter because we are going to be a hybrid model of remote work, and we will have physical collaboration hubs for the ones that prefer office work,” Al-Ansari says.
With a model where people can work from everywhere, Paystone’s geography is no longer a challenge, as it’s easier to attract world-class talent. With dreams to build a billion-dollar business from London, Al-Ansari says remote work allows them to hire from anywhere can bring those dreams closer to reality