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The role of HR in M&A:
5 golden rules for CHROs

By Sophie Witsenburg and Heiko Mijnarends
June 2026
| 5 min read

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Key insights

  • CHROs are central to protecting deal value in M&A, because many transactions fail not in the strategy but in the leadership, culture, talent and organisational decisions needed to execute it.
  • Rigorous HR due diligence and active liability management are essential, from identifying hidden employee obligations and pension liabilities to assessing retention risks, capability gaps and succession issues before they undermine the deal.
  • Clear communication and strong execution increase the likelihood of delivering the envisioned deal value, with HR responsible for retaining critical talent, shaping the future organisation and ensuring the operational basics — such as payroll, systems, benefits and data — work smoothly from day one.

Few corporate events create as much disruption as a merger, divestment or acquisition.

In such times, the company’s CHRO plays a central role in providing clarity and stability. There is much for them to consider. In M&A, deal value can be created or destroyed through people decisions — after all, most deals don’t fail in the strategy, they fail in the leadership required to execute it. Cultural tensions, organisational hurdles and talent retention challenges can all quickly come to the forefront.

Having worked as an HR specialist on many M&A deals during her career (Sophie), and with more than 20 years of helping organisations solve leadership challenges (Heiko), here are five golden rules for navigating this period of intense change and uncertainty.

In one project Sophie worked on, employees had access to company-owned holiday homes. In another, an exception in the handbook had effectively become standard practice. And are there any special arrangements hiding in a drawer anywhere? All this to say: detailed due diligence is of paramount importance. Research indicates that 60% of deals fail due to unaddressed people-related risks, highlighting the importance of thorough HR due diligence and liability assessment.

M&A is best treated as a structured change process, requiring transparent and frequent communication — even when answers may be incomplete.”

When a company is divesting an entity, HR needs to determine which employees are in scope, what the people related liabilities are (such as pensions scheme liabilities and applicable share schemes and yes — holiday homes), and what to negotiate with the counterparty about in scope staff terms and conditions. Use a detailed checklist to make sure you don’t miss anything — either when you’re disclosing your own information as part of a data room or when reviewing disclosed materials from a seller. Failure to do so, can lead to deal delays, legal risk and cost leakage.

At all times, stay close to your legal team to ensure compliance with relevant local legislation, including regulations designed to protect employees’ rights when transferring to a new employer.

M&A is best treated as a structured change process, requiring transparent and frequent communication. The paradox is that you must at times communicate when answers may be incomplete. However, lack of communication can lead to resistance and mistrust. In both acquisition and divestment scenarios, leadership teams play a key role in keeping their teams up to date, preventing talent flight and productivity decline. Communication gaps are a recurring issue in M&A: while 80% of leaders believe their messaging is effective, only 53% of employees agree, highlighting the need for more transparent and two-way communication approaches.

In our experience, communication plans need to be drawn up even before a deal has been signed. Be clear about the “why” of the M&A activity and map out your key stakeholders. Methods can include town halls, a regularly updated FAQ, and clear briefing materials for line managers. Some organisations also use a dedicated mailbox for employee questions. Remember that some key stakeholders, like staff councils, are legally required to advise in some jurisdictions. Used consistently, these practices help retain talent and build trust across teams.

In M&A, not all risks are immediately visible. Some of the most material exposures sit in long-term commitments tied to employees, including capability gaps, flight risks and weak succession planning that could erode value before day one.

Pension obligations are a well-known example, particularly where defined benefit schemes are involved. The key is to look out for arrangements that can carry forward-looking implications that extend beyond deal completion. In some cases, employment-related liabilities can increase the true cost of a deal materially beyond the headline price once they are fully taken into account.

These exposures can also shape how a transaction is structured. In a share purchase or merger, the buyer will typically inherit existing employment liabilities in full. In contrast, an asset transaction may allow for greater selectivity over which obligations are assumed. In more extreme situations, people-related liabilities can influence whether a deal proceeds at all. Therefore, legacy obligations must be understood and addressed.

For HR, this means going beyond identification and bringing clarity and rigour to the people decisions that determine whether the strategy delivers. This requires early engagement to quantify exposure, close collaboration with legal and finance colleagues, and active involvement in how these issues are reflected in deal assumptions and negotiations. Questions such as where liabilities will sit post-close, how they will be funded and whether any restructuring is required before completion need to be addressed explicitly.

Every M&A deal is based on assumptions about how the combined entities create more value together. And HR is also accountable for enabling the deal thesis—not just managing integration. Key questions include which employees are critical to the value thesis, and how retention schemes and organisation design can unlock it. Research shows that execution matters more than strategy: 83% of failed M&A deals are attributed to integration issues, reinforcing HR’s central role in organisation design, talent retention and change execution.

Employees experience the reality of an M&A transaction in immediate ways: whether they are paid correctly, can access their systems, and understand their benefits.”

Top value drivers include cost or revenue synergies as well as capability acquisition. In such cases, HR leaders have a key role to play when deciding on potential retention schemes for key employees — which staff members are absolutely critical to achieve the desired outcomes? How to best structure retention schemes, and which considerations are there besides financial incentives? How is the “secret sauce” of the acquired entity maintained so that 1+1 = 3? Retention risk is not hypothetical: studies show that around 40% of critical talent exits within two years post-transaction, directly undermining the deal thesis.

Additionally, if cost or revenue synergies are a key driver: what does this mean for the future organisational design? Which teams are perhaps overlapping in their deliverables when the deal is done; which reporting line structures make sense in the new reality; and which leaders from both organisations are best placed to lead into the future? Thorough assessment of top talent and integrated succession planning for the future must be part of the foundation of success going forward.

Employees experience the reality of an M&A transaction in immediate ways. Whether they are paid correctly, can access their systems, and understand their benefits often matters more in the first weeks than the broader strategic rationale behind the deal.

This puts a spotlight on the underlying HR infrastructure. Payroll, in particular, leaves very little room for error. The same applies to system access and data integrity —employees must be able to log in and find information needed to do their jobs.

Behind the scenes, these outcomes depend on a series of detailed decisions. Whether systems are being integrated or separated, how employee data is migrated, and how benefits are administered in the interim all require careful planning. Data privacy legislation warrants special attention in this context. Handled well, these aspects tend to go unnoticed — which is rather the point.

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