Survey reveals: Most HR teams not ready for uptick in M&A deals

Dealmakers are looking forward to an anticipated rise in M&A activity in 2025, but human resources departments are expressing concerns about their readiness to navigate the challenges that come with such transactions. While dealmakers are optimistic about the potential for increased merger and acquisition activities in the coming year, HR teams are feeling unequipped to handle the unique demands that accompany these transactions.

One of the key challenges facing HR teams in the context of M&A activity is the need to manage cultural integration between merging companies. The blending of two distinct corporate cultures can often lead to clashes and conflicts among employees, making it essential for HR professionals to have strategies in place to facilitate a smooth transition. Inadequate preparation in this area can result in decreased employee morale, increased turnover rates, and ultimately hinder the success of the merger or acquisition.

Additionally, HR teams are facing challenges related to talent retention and development during M&A transactions. Employees may feel uncertain about their future within the newly formed entity, leading to increased turnover and talent loss. HR departments need to proactively address these concerns by implementing retention strategies and providing avenues for professional development and growth. Without proper planning and implementation of these initiatives, companies risk losing valuable talent and expertise during the integration process.

Furthermore, HR teams are also grappling with the complexities of aligning compensation and benefits structures across merged entities. Discrepancies in pay and benefits packages can create dissatisfaction among employees and lead to tension within the workforce. HR professionals must work diligently to harmonize these structures, ensuring fairness and equity for all employees involved in the merger or acquisition. Failure to address these issues can result in negative impacts on employee morale and overall productivity.

In light of these challenges, HR departments are recognizing the need to enhance their preparedness for M&A transactions. By investing in training and development programs, HR professionals can acquire the skills and knowledge necessary to effectively navigate the complexities of mergers and acquisitions. Collaborating with other functional areas within the organization, such as finance and legal departments, can also help HR teams gain a holistic understanding of the M&A process and align their strategies accordingly.

Overall, while dealmakers are optimistic about the potential for increased M&A activity in 2025, HR teams are acknowledging the need to bolster their readiness to tackle the unique challenges that come with such transactions. By proactively addressing issues related to cultural integration, talent retention, and compensation alignment, HR departments can play a pivotal role in ensuring the success of mergers and acquisitions, ultimately contributing to the long-term success of the newly formed entity.