Mergers and acquisitions, commonly shortened to M&A, describe two ways companies combine: a merger joins two organizations into one new entity, while an acquisition has one company take over another, which typically continues operating as a subsidiary or is absorbed entirely. From an HR standpoint, both events mean combining two distinct workforces, cultures, and systems into one, often on a tight timeline.
Why M&A matters to HR
HR is frequently brought into a deal later than it should be. WTW’s 2025 M&A Barometer, surveying more than 80 HR leaders across North America, Europe, the Middle East, and Asia Pacific, found 65% of HR teams feel unprepared to handle their deal portfolio, and less than 20% believe HR was properly included in preliminary negotiations. That gap matters because people decisions made without HR input tend to surface as retention problems after the deal closes, when they’re much harder to fix.
What HR handles during M&A
- Workforce due diligence. Assessing headcount, compensation structures, benefits liabilities, and key-person risk before the deal closes.
- Retention planning for critical talent. Identifying which employees are essential to the deal’s success and building a case for keeping them, not just the executives.
- Culture assessment and integration planning. Comparing how the two organizations actually operate, not just their stated values.
- Communication planning. Deciding what employees are told, when, and by whom, since silence during a deal breeds far more anxiety than a direct, honest update.
- Systems and policy harmonization. Reconciling two different payroll systems, benefits plans, and performance processes into one.
Why non-executive talent retention matters most
Executive retention gets the most attention in a deal, but it isn’t where most of the value risk sits. WTW’s research found 78% of HR leaders identified retaining key talent with specialized skills below the executive level as their highest due diligence priority, and 50% ranked non-executive talent retention as the leading metric for integration success, compared to 29% who prioritized leadership retention. The people who actually run day-to-day operations are often the ones a company can least afford to lose, and the ones most likely to leave quietly during a long integration.
Culture as the leading integration challenge
Culture alignment consistently ranks as the hardest part of bringing two companies together. WTW’s 2025 data found 74% of non-US companies and 54% of US companies named culture alignment as their top integration challenge, ahead of systems, process, or structural issues. Two companies can have compatible strategies and still struggle if their decision-making speed, risk tolerance, or management style are fundamentally different.
Common M&A workforce challenges
- Uncertainty-driven attrition. Employees who don’t know whether their role survives the integration often leave before finding out, taking valuable knowledge with them.
- Duplicate roles and unclear reporting lines. Combining two organizational charts rarely produces a clean result on the first attempt.
- Conflicting systems and processes. Two different HRIS platforms, performance cycles, or pay structures have to be reconciled, usually under time pressure.
- Inconsistent communication. Employees hearing different messages from different sources during a deal erodes trust fast.
- Culture clashes that go unaddressed. Assuming culture will “work itself out” after close is a common and costly mistake.
Who leads HR’s role in a deal
Responsibility typically splits between a deal team, often finance and legal-led, handling due diligence and valuation, and HR leadership managing the people-side integration once terms are set. The WTW data on HR’s limited inclusion in early negotiations points to a structural gap here: HR is frequently brought in to execute an integration plan it had no hand in shaping, which makes early retention risks harder to catch before they become resignations.
How to retain key talent through a deal
Identify critical, non-executive talent early using the same rigor applied to executive retention. Communicate directly and often, even when there isn’t new information to share, since silence reads as bad news. Give retained employees a clear, near-term sense of their role in the combined organization rather than leaving them to guess.
How Engagedly helps
Integrating two workforces means getting people up to speed on new systems, new reporting lines, and often a new set of tools, fast. Engagedly’s Learning Experience suite, combining LXP and LMS, supports structured onboarding and skill-building paths that help a newly combined workforce ramp up together instead of each half learning in isolation.
See Learning Experience or book a demo.
Mergers and acquisitions FAQs
What’s the difference between a merger and an acquisition?
A merger combines two companies into one new entity, while an acquisition has one company take over another, which usually continues as a subsidiary or gets absorbed into the acquirer.
Why do so many M&A deals struggle after closing?
Research consistently points to culture and people issues rather than financial or strategic ones. WTW’s 2025 data found culture alignment is the top integration challenge for a majority of companies surveyed.
Should HR be involved earlier in M&A deals?
Research suggests yes. WTW’s 2025 survey found less than 20% of HR leaders felt properly included in preliminary deal negotiations, despite people risk being one of the largest factors in whether an integration succeeds.
Performance
