Guiding HR from Carve-out to HR Transformation

At binder|consulting, we value long-lasting customer relationships. This can mean being re-engaged after successful project completion. A great example for such re-engagement is the transition from carve-out support to a full HR transformation, that is, to the implementation of an HR Target Operating Model (TOM). The HR TOM outlines how and by whom HR services are delivered, governed, and measured. To learn more about b|c’s HR TOM framework, please refer to our comprehensive post on this topic.

In fact, what better time to re-engineer and -align on HR strategy, processes, and tools than after ensuring that the fundamental, “hygienic” (i.e., core) HR services are up and running after a carve-out? As the focus shifts from ensuring that nothing is overlooked to exploring how HR can evolve into its most effective, progressive, and high-impact version, you will be well-positioned to fully engage in this transformation. But before getting started, we invite you to take a moment to review the following insights.

In this article, we start by fleshing out why carve-outs are a challenge and an opportunity at the same time. Then, we outline how b|c can support HR from M&A transaction to sustainable HR transformation. We close by presenting our practice-driven HR TOM toolkit, turning abstract dimensions into actionable deliverables.

After having spent many years as part of a former parent company, becoming an independent entity through carve-out brings significant disruption. It involves parting ways with both advantages and limitations associated with being part of a larger corporate structure.

A benefit may have been the adoption of global HR processes and systems (e.g., for recruiting, learning, performance management), cancelling the need to design and implement respective local counterparts. Whereas adapted processes can—per se—be retained post carve-out, discontinued systems (enabling said processes) cannot. Thus, a possible challenge may be selecting and implementing suitable replacements for formerly global HR systems.

Speaking of HR IT, diverse local tools (likely those that support hygienic HR processes) resulting in a heterogeneous system landscape add and demand fundamental decisions: to homogenize the landscape? Or is it worth retaining diversity, despite the challenges it brings?

Another challenge may be a local lack or maldistribution of skills and past experiences. For example, some HR teams may be less sophisticated with using data to inform HR and business decisions. Others may lack technical knowledge about certain areas of expertise (e.g., Onboarding). And others again may have never dealt with systematic process (re-) engineering. This scenario is particularly likely if other HR roles or institutions (e.g., global or regional business partners, CoEs) were responsible for value-adding HR services before the carve-out. Under such circumstances, local HR teams were not required to possess the skills associated with service execution.

If the carved-out company consists of multiple locations spread across the globe that used to be related to respective regional hubs but not to each other, then transparency and collaboration between locations (i.e., local HR teams) may have been and continue being very limited or missing entirely. Moreover, it can imply that post carve-out, the company finds itself with no global HR team—hence no global guidance, overarching orientation, and effectively no team inherently responsible for setting up global HR structures, processes, and tools.

With every challenge, there is an opportunity. In this light, a carve-out can act as a catalyst for change. Releasing the dependencies from the former parent, the carved-out company feels an uplifting start-up spirit, a drive to be bold, a drive to change. Finally, the time has come to do things differently!

For HR, this means questioning its structures, processes, and tools—in other words, redefining the HR TOM, aiming to enhance employee productivity and drive long-term business growth and innovation. This can lead to leaner HR operations, characterized by fewer redundancies and more streamlined processes.

However, a strong desire for change can risk creating confusion—not knowing where to start, feeling overwhelmed by too many options, and ultimately falling into decision fatigue, which can lead to no decision at all. For instance, there are manifold HR providers on the market, making it difficult to select the most suitable one. The aforementioned, carve-out-induced challenges (such as the lack of skills and experience with software selection and implementation) may add to the challenge.

This being said, we believe that HR can benefit from external support on its change journey. At b|c, we want to ensure that HR knows where it is going. Thus, we act as the competent guide from M&A transaction support over ensuring carve-out and stand-alone readiness all the way through to HR TOM implementation. Next, let’s explore how we go about that.

Following the chronology of a carve-out, we support HR during three key stages:

• M&A transaction
• Carve-out and stand-alone readiness
• Post carve-out activities and HR TOM implementation

Please note that between stages, transitions are fluid. In practice, this means that—e.g.—we do not wait until the completion of the M&A transaction to define an interim HR TOM for Day-1 (in fact, it would be detrimental to project success if we did). Thus, in addition to providing orientation in terms of “What happens when”, the stages detailed below help structure the article at hand.

No M&A transaction is like another with different transaction types (e.g., carve-outs, acquisitions, joint ventures), entity structures (e.g., share vs. asset deals, existing legal entities vs. legal carve-outs required), and transaction partners (e.g., financial vs. strategic investors, competitors) affecting, involved stakeholders and their interests, legal challenges and associated risks, as well as commercial interests and drivers.

Yet, our holistic b|c portfolio caters to all of our clients’ unique combinations of (challenging) conditions. For the sake of simplicity, whenever applicable, we focus on carve-outs and financial investors in the following.

Whereas some transaction-related assets are typically prepared and published without b|c involvement, we become your trusted advisor for…

HR data room preparation and Due Diligence

The virtual (HR) data room acts as central source of information and thus constitutes the basis for Due Diligence. Once opened to potential transaction partners, it facilitates exchanging documents and clarifying questions about the business in divestment in preparation for  the binding bid and Master Sale and Purchase Agreement (MSPA). 

To populate the HR data room, we support with collecting HR- or (more broadly) personnel-related documents from all business units affected by the carve-out. With the help of a structured, comprehensive Data Request List, we make sure to gather everything from organization charts and lists of business employees over benefits documentation to competition clauses and personnel-related litigation cases. Our proven approach to employee baselining can be flexibly adjusted to our client’s needs, including all data fields that will (or are likely to) become important in the later course of the transaction or merely those that can be disclosed to potential transaction partner(s) upon opening the data room.

Speaking of opening the data room: During the Q&A phase and expert sessions, we can assist with answering questions (no matter how specific they are) and are happy to support—or even act as—subject matter experts providing detailed insights into particular personnel-related aspects of the business in divestment.

Post-Signing activities

After sell- and buy-side have signed the MSPA, we ensure regular updates of MSPA annexes and disclosure schedules and provide a structured methodology to track and report HR project status, outstanding activities and responsibilities until Closing (specified in operational project plans and/or Day-1 readiness checklists), as well as the HR budget (in terms of one-time and running costs).

Contracting support

Carve-outs and contract changes go hand in hand. And we understand all too well that contract support is highly valued when time is short, yet contracts are many. Our expertise and experience cover contract termination, re-negotiation, as well as entirely new contract set-up (e.g., with outsourcing or shared services providers). In other words, we are familiar with (the manifold nature of) termination notifications and new service scope clauses, defining knowledge transfer needs, specifying hypercare agreements, and working hand in hand with procurement specialists as well as other involved stakeholders.

Local analysis of HR services, HR IT systems, and further carve-out-related specifics

We believe that any project benefits from a comprehensive and diligent analysis of the as-is. For example, (HR) software implementations are successful if the (HR) IT landscape in which the new software shall be integrated has been thoroughly scrutinized and understood. M&A projects in general and carve-outs in particular are no exclusion to this premise.

On the contrary, understanding the as-is in every business unit affected by the carve-out allows us to gauge the degree of (remaining) dependency from the parent company or—in other words—its degree of stand-alone readiness. As ties to the parent are cut on Day-1 (unless TSAs [Transitional Service Agreements] or ESAs [Extended Service Agreements] for services and/or systems apply), that each business unit remains operational, especially in terms of its hygienic functions, namely payroll, HR administration, time management, benefits, and global mobility. This way, we can focus efforts and resources on the most important dependencies in terms of HR services, HR IT systems, and external providers contracted by the parent company.

Furthermore, a rigorous as-is analysis can serve as a great basis to define the to-be. Even if stand-alone readiness is high and links to the parent company are few initially, a systematic overview of all local solutions in place enables (informed) discussions about the future architecture (e.g., retaining local solutions vs. harmonizing by implementing a global replacement).

Each analysis is supported by our standard, customer-approved methodology, generating holistic overviews and answering further personnel-related questions (regarding—amongst others—external employee transfers, special global mobility cases, and open litigations).

During this stage, our main focus is defining and implementing an interim HR TOM for Day-1. Whilst its temporary nature permits re-evaluating its components post carve-out, we can already dive deeper into certain dimensions during stand-alone readiness planning and implementation (i.e., prior to Day-1).

Also, depending on our client’s unique situation (considering internal resources, budgets, time pressure, etc.), more or less attention can be directed towards value-adding HR functions (e.g., talent acquisition, learning, performance management) during stand-alone preparation. Yet regardless of the scenario we encounter, the activities outlined next apply to hygienic and value-adding HR functions alike.

Defining the interim HR TOM

In practice, defining the interim HR TOM entails specifying future responsibles for HR services (i.e., in-house vs. outsourced), identifying key 3^rd-party providers (e.g., LinkedIn for active sourcing), making focal decisions regarding HR IT systems (e.g., global vs. local solutions), locating knowledge transfer needs, and highlighting planned or recommended HR headcount increase.

Implementing the interim HR TOM

At b|c, the work does not stop with mapping out concepts and making (educated) suggestions. Instead, we are happy to act as hands-on implementors. For the interim HR TOM in carve-out scenarios, approach implies:

• Launching (local and global) tender processes solutions related to hygienic and (some) value-adding HR functions, subsuming…
  • (Local) provider research and longlisting
  • Tender document creation and dissemination
  • Provider comparison and shortlisting
  • Final provider decision support
  • Provider implementation—where we do not shy back from going into detail on technical topics
• Mobilizing resources for knowledge transfer, subsuming resource allocation, budget and timeline alignments for handovers from previous service provider (e.g., parent company) to carved-out company
• Initiating (local and global) hiring activities, that is supporting recruitment for Day-1-critical open positions (e.g., local HR representatives, global executive functions)
• Managing the HR IT transition by deciding on MREC (Move, Replace, Exit, Copy) strategy and responsibles for every HR IT system and specifying data archival needs, as applicable

As mentioned above, before Day-1, our main focus is to define and implement an interim HR TOM, that is, to make sure that HR “stands on its own two feet”. But once the challenge of carve-out has been mastered (at least from a legal perspective), we can kick-off the long-term HR TOM endeavor—a “proper” HR transformation. And just as for its temporary predecessor, we conceptualize and define before we implement.

In the following, we break down the b|c HR TOM framework (see visual above) by showing how we operationalize a selection of its components in corporate settings.

HR program management

Our approach to program management entails advising on all aspects of the HR transformation, interacting with internal and external partners, as well as ensuring consistent execution and coordinated activities.

To coordinate transformation activities, we set up a transformation office deciding on existing and upcoming project initiatives. These decisions are embedded in a transformation roadmap and guided by the program’s governance structure, key stakeholders that represent all levels—from operations-focused process and business owners over HR project managers and HR leadership to business executives (i.e., CEO, CFO, CHRO, CIO, and the like) with the strategic impact in mind.

Selection, design, and implementation of global HR platforms

If the decision was made to implement a global HR platform, then we can advise you from software selection over design to implementation.

First, regarding software selection, we follow a structured approach that starts with establishing a clear understanding of global requirements and deriving a longlist of possible 3^rd-party providers. It continues with the definition of a comprehensive requirements catalog for the future solution, benchmarked against industry best practices. Collected proposals from longlisted vendors are compared against said requirements catalog. At this stage, we evaluate alternative options, such as duplicating a pre-existing global system (if applicable), retaining local solutions (if applicable), or implementing no software at all (typically not a feasible option, but nonetheless worthy of consideration for the sake of completeness). After formulating a final recommendation, we support with decision-making and—subsequently—the initiation of software procurement, factoring in company-specific, internal approval processes and stakeholder interests (e.g., works council, IT security).

In our approach to software design, we draw from our profound expertise in digital HR process design and (re-) engineering. Knowing the multi-facetted nature of (e.g.) a comprehensive Learning Management System—covering learning content and structure, training types, learning channels, learner groups, and more—helps us develop concepts that address the needs of our clients and are thus made to stand the test of time.

Finally, we guide software implementation—either as an actual implementation partner or by joining forces with another external provider. We ensure diligent testing and thorough quality assurance—keeping long-term benefits and durability at the forefront of our mind. And since we always put people first, no system implementation shall draw short in terms of trainings and user enablement.

HR process design

We define processes based on employee journeys that describe the end-to-end experiences of critical personas—from employees/candidates over hiring managers to HR BPs.

In our Design Thinking workshops, we involve persona representatives to design said employee journeys. Therein, we prioritize “moments that matter”—human interactions that are most important to the experience of (future) employees: being approached proactively to become part of a new team, getting regular airtime with management, being nudged to learn and grow, receiving support when times are tough.

HR data modeling and reporting

An article published in 2025 that does without mentioning data or People Analytics? Unheard of!

We believe that no digital HR transformation is complete without the implementation of an HR reporting system that …

• … leverages insights into capacities, jobs, demographics, etc. to prepare the organization for the future of work;
• … supports management taking proactive decisions based on HR data;
• … makes HR more productive;
• … fosters consistent information-sharing between business units and global functions to benchmark HR insights and use resources effectively;
• … fulfils further reporting requirements from (e.g.) sustainability or annual reports as well as other functions (e.g., Production, Sales).

Thus, we support you on the entire journey towards state-of-the-art People Analytics—from defining an HR data model over data collection, cleaning, and handling (using no-, low-, and pro-code software) to data visualization (using market-leading business intelligence tools such as Power BI and Tableau) and deriving valuable data insights.

To learn more about key success factors to HR reporting, we appreciate you reading our post on this topic.

HR execution from talent acquisition to strategic workforce planning

From talent acquisition and recruiting over learning and performance management to strategic workforce planning: By leveraging our expertise, experiences, and proprietary tool-supported solutions (e.g., talent acquisition forecasting, strategic workforce planning dashboards, COLMEIA’s job architecture software), we help establishing an HR function that (amongst others) …

• … is modern and innovative;
• … is malleable enough to quickly adapt to external and internal changes;
• … relies on data and empiricism rather than intuition, feel, and anecdotal evidence

… to generate maximum value for its clients and the organization as a whole.

Continuous Stakeholder Management

Last but certainly not least, to pave the way for the transformation’s sustainable success, we advocate and realize holistic change management—training and enabling HR to engage and communicate sensitively with diverse stakeholders across the entire organization, thus facilitating the adoption of changes to organizational culture.

Going all in on the HR transformation journey is worthwhile; and we hope that the words above filled you with excitement and inspiration, with an eagerness to get started. Taking on the challenge of transforming HR post carve-out may seem daunting at first—but fortune favors the bold, and with us by your side, you’ll never walk alone.