Divestitures are accelerating across industries as companies reshape portfolios, unlock capital and pursue strategic growth by shedding non-core assets. Yet while carveouts are typically well addressed from a legal and financial perspectives, human capital and operational complexities are often underestimated, making the "true costs" of a divestiture manifest well beyond sale. The result? Delays, extended Transition Service Agreements (TSAs), and erosion of deal value.
In WTW's rich experience with M&A transactions – completing almost 2,000 highly successful mergers, acquisitions, divestitures, and spinoffs per year – lack of preparedness on the HR, operations and people front are among the top reasons why a deal underperforms or carveouts are unable to achieve full Day 1 readiness. Key pain points include:
- Buyer need to manage for future state, for which the buyer profile must be fully understood and the seller role must be clearly delineated
- Operational considerations, such as understanding the impact to the seller's operations in each country and keeping the buyer informed on operational requirements
- Navigating the employee experience, including managing expectations around culture for different employee populations and establishing sensitivity around outsourced arrangements such as PEOS
- Managing TSAs, which can be time-consuming and inefficient, limiting the buyer's ability to make changes
Turning deal complexity into confidence
These challenges are real, but they are not insurmountable. With the right approach, organizations can accelerate carveouts on the HR side, while minimizing risk and protecting deal value.
That's why WTW developed Global Human Capital Divestitures in a Box (DIAB): a breakthrough turnkey HR solution that delivers a cost effective Day One readiness in 20 weeks or less, backed by our robust M&A consulting expertise in Global Total Rewards, Compensation, Organization & HR Function and Operations, and Employee Experience, coupled with an extensive pre-negotiated vendor ecosystem across payroll, HRIS and benefits administration. The results are significant:
- Faster time to value, accelerating deal execution and HR readiness
- Reduced risk: by minimizing TSA exposure and operational disruption
- Integration across HR through a unified, data-driven solution that connects all HR functions, enabling smarter decisions through consolidated insights rather than siloed approaches
- Cost efficiency leveraging pooled arrangements to reduce employee costs
- Strategic focus for internal teams so they can prioritize growth and transformation
The bottom line
Divestitures are not just financial transactions—they are human transformations. Companies that treat the people side with the same rigor as the financial side will protect value, and accelerate execution. With WTW's DIAB, organizations can turn divestiture complexity into a competitive advantage.
