A Playbook for the People Side of M&A

Companies do not typically embark on high-stakes deals as significant as mergers and acquisitions without considerable assessment of the inherent advantages, disadvantages, risks, and opportunities.

Organizations have incorporated increasing rigor into every phase of managing the deal—from identifying the target through to integration. Finance, legal, and business development leaders typically vet and analyze the target company from multiple angles. Increasingly, HR is asked to participate in the due diligence stage to gather and assess the skills and roles of the target’s workforce. Still, we continue to see a high number of deals that fail to yield the desired results. The reasons for failure vary, but disproportionately the crux of the problem lies in underestimating the role of human capital.

All the finances may be in order and show great signs of future growth, but future success can be erased by a gap in understanding how you will leverage your greatest future-state asset (including the costs and risks)—the talent. The company does not sufficiently consider how it will leverage the future new profile of its talent when strategic people leaders are not at the table until a deal is finalized.

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Written by UHY’s external HR due diligence consultants, Erika Duncan and Aaron Olman. Originally published by AMAQuarterly in their Winter-Spring 2023 edition.