The mergers and acquisitions (M&A) landscape continues to evolve, with global deal values increasing by 15% in the first half of 2025, even as deal volumes declined by 9% compared to the previous year [1]. This trend towards larger, more strategic transactions underscores the high stakes involved. In this competitive environment, where post-pandemic workforce dynamics have created a persistent talent scarcity, effective talent management has become more critical than ever. A recent study highlights the scale of this challenge, revealing that voluntary attrition can increase by over 30% during M&A transactions [2].
Securing critical talent in an M&A
At the core, M&As are meant to help businesses pool resources so they can work towards achieving their goals. While this typically refers to the consolidation of assets, with the talent war waging fiercely today, human resources and talent can also be considered major assets.
M&A practitioners cite talent retention as a leading driver of M&A deal success. Some businesses even acquire other companies specifically for their critical talent – a move known as “acqui-hiring”. The failure to retain key employees can have devastating consequences, with research showing that 47% of essential staff leave within the first year of an M&A, and 75% are gone within three years [3].
For example, a pharmaceutical company may acquire another healthcare firm for its strong R&D team. Similarly, a tech firm might acquire a startup to absorb its team of AI and machine learning specialists. This puts intense pressure on HR leaders and teams, with talent retention and attrition becoming key areas of focus.
With that in mind, here are four steps to help you emerge from an M&A with a strengthened talent pool.
1. Implement a robust talent retention strategy
Merger negotiation and integration can be anxiety-inducing and staff may start to consider their options elsewhere. As part of your talent retention strategy, you need to identify which staff members are critical to the consolidated company and proactively manage flight risk.
An example of a critical talent might be those who are armed with highly specialised knowledge pertaining to the acquired company, such as expertise in legacy IT systems. Retaining these employees will ensure that the integration of IT systems can proceed seamlessly.
The loss of critical talent could influence the success of the M&A, so it’s key to develop a talent retention plan as soon as possible. As noted by Deloitte, retention planning should begin during the due diligence phase, rather than being treated as a mid-transaction afterthought [2]. If your company has a strong risk culture to begin with, you may have begun developing your plan even before the acquisition is finalised, having identified the risk and begun working to address it pre-emptively.
2. Define the retention scope
How are retention decisions made in an M&A event? While it may seem more straightforward for top management to choose which employees to retain, a more comprehensive, albeit more time-consuming alternative is the bottom-up approach.
Top management may lack a complete understanding of critical roles or may be unable to remain objective in staff decisions. In contrast, the bottom-up approach – which involves gathering information from multiple management tiers, as well as employee interviews, surveys and more – ensures that leaders get a detailed understanding of which talents are necessary to support critical functions of the company.
In short, the bottom-up approach enables business leaders to make an informed decision grounded in a clear understanding of what’s really happening on the ground. This process also involves verifying the credentials and qualifications of key personnel to ensure they align with the strategic goals of the new, consolidated entity. For organisations in Singapore, this may include leveraging MOM-approved verification services to confirm educational and professional qualifications for work pass holders.
3. Assess attrition risks and employee engagement during diligence and integration stages
Start the ball rolling by engaging key talent. Speak with a broad range of people involved in the company being acquired. If possible, reach out to former employees; they may be more willing to speak openly about their experiences in the firm.
This approach will grant fresh perspectives and insights into the current talent pool of the company being acquired, as well as the strengths and weaknesses of certain processes. In doing so, HR leaders will be able to gauge the level of attrition risk and employee engagement.
Other forms of due diligence might include securing the help of an external partner or reviewing publicly available data such as Glassdoor and LinkedIn. These will help the acquiring company better anticipate attrition risk. However, with a 2025 survey by WTW finding that 65% of HR teams feel unprepared to handle their M&A deal portfolios [4], relying on expert partners for comprehensive due diligence is more important than ever. This includes conducting thorough background checks to mitigate risks and ensure regulatory compliance. For financial institutions, adhering to stringent guidelines is paramount, making services like MAS background screening an essential component of the M&A due diligence process.
4. Create a strong and compelling vision for the future
Successful integration will require employees of both the acquiring company as well as the legacy company to be aligned in terms of goals for the new organisation.
By involving key employees on both sides in the creation and crafting of said goals, HR and business leaders can boost employee engagement and optimism in the consolidated organisation, thus reducing flight risk. Discussions could include putting into words a case for change (thus the M&A deal), what to look forward to in the future, measures of success, and guiding principles. A critical part of this is defining and communicating a compelling Employee Value Proposition (EVP) that reflects the new organisation’s culture and opportunities – a strategy that has proven effective in post-merger integrations [5].
Remember to include talents who sit below the executive level in such conversations. This can help energise the integration process as it involves more levels of the organisation. Additionally, these people may be important influencers in the workforce, and can help provide feedback on the integration process, troubleshoot teething issues, and share insight into different work cultures.
Enhancing talent retention to get the best out of an M&A event
Ultimately, while M&A can spell major upheaval in terms of personnel changes, it comes with several benefits. Business leaders may find that post-integration, the organisation may be re-energised and have a clearer focus on how to move forward, due to obtaining and retaining rare talent.
By carefully assessing and managing your employees in every step of your M&A process, you can build a strong, flexible, and resilient workforce: one that can help future-proof the consolidated organisation to survive and thrive in today’s fast-changing business landscape.
References
[1] PwC. (2025, June 24). Global M&A industry trends: 2025 mid-year outlook. https://www.pwc.com/gx/en/services/deals/trends.html
[2] Deloitte. (2025, April 14). Talent retention in M&A: Insights from Deloitte Australia’s March 2025 HR DealMakers Event. https://www.deloitte.com/au/en/services/consulting/blogs/talent-retention-insights-march-hr-dealmakers-event.html
[3] Mentorloop. (2024, November 14). Losing Talent: The Quiet Killer of Mergers and Acquisitions. https://mentorloop.com/blog/losing-talent-mergers-acquisitions/
[4] WTW. (2025, June 24). M&A dealmakers unprepared for recovery, finds WTW survey. https://www.wtwco.com/en-gb/news/2025/06/m-and-a-dealmakers-unprepared-for-recovery-according-to-wtw-survey
[5] McKinsey & Company. (2025, February 19). Retain, integrate, thrive: A strategy for managing talent during M&A transactions. https://www.mckinsey.com/capabilities/m-and-a/our-insights/retain-integrate-thrive-a-strategy-for-managing-talent-during-m-and-a-transactions