Inherited talent integration

Integrating Inherited Talent: 7 Key Steps for Enterprise M&A

Effective workforce planning is the key to success in enterprise M&A. Learn which seven critical steps companies should take to optimize an inherited workforce during global expansion.

Stefana Zaric
Written by Stefana Zaric
August 10, 2023
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Key takeaways

  1. Global merger and acquisition deals allow business owners and HR leaders to leverage inherited talent from the new organization.
  2. The combination of HR tech, data analytics, and strategic talent management can ensure a successful M&A integration, with a smooth transition and maximized potential of acquired talent.
  3. Our pre- and post-merger integration checklist includes key considerations when branching into new economies—from legal and compliance to aligning organizational structures and developing succession plans.

Mergers and acquisitions offer growth opportunities, but managing inherited talent can be a complex task.

If done without a well-thought-out plan, the integration of inherited talent can lead to decreased employee morale, increased voluntary and involuntary turnover, and discrepancies and poor communication between leadership teams.

We've created this guide to help you tackle all the people management intricacies of M&A deals, from evaluating cultural compatibility to overcoming legal challenges of hiring overseas to implementing talent retention strategies.


1. Pre-deal considerations for M&As

Various studies estimate the failure rate of mergers and acquisitions between 70% and 90%. To prevent falling into this disheartening statistic, companies need to begin with pre-deal considerations during the decision-making phase to ensure optimal acquisition integration. Dealmakers and the leadership team have many boxes to check before the deal closes, like evaluating the existing talent pool, cultural compatibility, and building an integration plan.

Each acquisition can differ based on the terms of the deal, culture, workforce demographics, and people, but there are best practices to ensure a successful merging of teams and products post acquisition. Being intentional is key as something is required of all stakeholders from leadership to individual contributors when two companies join forces. Whilst we have learned much and each of our acquisitions has been quite different based on the goal of the business with the acquired product and people, building a plan to assimilate and integrate before the deal is closed is critical.

Casey Bailey, Head of People, Deel

Assessing the existing talent pool

Evaluating the talent pool of the target company is a crucial aspect to consider before a merger. Identify key stakeholders and employees whose expertise and experience will be valuable for the future success of the merged entity. A talent assessment allows you, as the acquirer, to ensure the continuity of critical functions and maintain key relationships.

Evaluating cultural compatibility

Assessing cultural compatibility is equally significant as it helps identify potential integration challenges that may arise due to cultural differences and work practices between the two organizations. Some integration challenges when merging across geographical boundaries include work routine, compliance expectations, and language barriers.

World map

By thoroughly evaluating cultural compatibility, you can identify potential challenges and develop strategies to bridge the cultural gaps from day one. A proactive approach enables HR teams and leadership to implement measures that promote open communication, mutual respect, and understanding between employees from both entities.

💡 Don't forget that talent should add to your culture and enhance it, rather than just fitting in. Read our team's insights on hiring cultural add vs. cultural fit.

Developing a comprehensive plan for talent retention

HR teams must develop a comprehensive plan for talent retention to protect expertise within the target company post-merger. The plan should include initiatives to engage and communicate with employees effectively, address concerns, and provide a clear vision for the future of the combined organization.

Involving your HR team from the beginning

The HR team should be involved during the planning phase of M&A deals, advice that is confirmed by Casey Bailey, Deel’s Head of People.

We have experienced a lack of preparedness, failure to bring HR in early enough or provide enough information, poor onboarding of the new team, and delay from the business in determining product and business integration strategy. Staying agile, moving change management forward, pushing the business to understand the impact on talent and culture, and responding when mistakes have been made are some things HR leaders and teams can do to demonstrate that the people involved are important.

Casey Bailey, Head of People, Deel

Involving the HR team from the outset of M&A deals is not a mere formality; it is a strategic imperative. The HR professionals' insights, expertise, and understanding of the human dynamics involved can significantly impact the success of the transition.

2. Identifying inherited talent

M&A offers an excellent strategy for acquiring talent, but only if the talent management team has a plan to keep them engaged. 

Identifying inherited talent involves several steps, including conducting due diligence and leveraging data analytics and assessment tools for smooth integration.

Conducting due diligence

HR teams should conduct thorough due diligence during an M&A deal to identify key talent and assess their value to the organization.

The due diligence phase comprehensively reviews the target company’s workforce and evaluates their skills, experience, and cultural fit within the acquiring country.


Due diligence will reveal the strengths and weaknesses of the inherited talent so that HR teams can develop a transition plan that includes the following:

  • Strategies for retaining critical talent
  • Training and support for skill enhancement
  • Methods of fostering a positive work environment
  • Initiatives to encourage collaboration and open communication


Leveraging data analytics and assessment tools

A thorough and objective evaluation of the skills and capabilities of inherited talent during an M&A deal should leverage data analytics and assessment tools to gain valuable insights.

A data-driven approach enables HR to prioritize talents based on the importance of the organization’s success. It also helps identify key individuals and skills gaps, facilitate targeted training, and create development programs.

One of the greatest benefits of implementing an HRIS is the ability to provide the greater organization with data intelligence regarding strategic workforce projects and planning initiatives.

Lauren Frye, Director of People Tech & Data, Deel

HR tech tools and evaluations are handy to:

  • Analyze performance data to identify top performers
  • Use surveys and feedback mechanisms to assess cultural fit based on company culture and values
  • Use predictive models to identify talent retention risks and factors that may impact workforce dynamics
  • Conduct employee engagement surveys to understand sentiments, concerns, and levels of engagement
  • Analyze training data to identify skills gaps and create targeted development plans
  • Identify potential successors for key positions and ensure a smooth leadership transition
  • Evaluate team dynamics
  • Assess the cost implications to optimize resource allocation


3. Overcoming legal challenges of inheriting talent

While globalization has opened the doors to international talent, it’s important to consider legal and compliance requirements — from payroll and benefits to legal termination

For example, if you plan to acquire a company across national lines and inherit talent, you must determine how to employ these individuals according to local laws and requirements.

So, what do you do if you don’t have an entity in a country where talent resides? You can choose among several options for hiring overseas:

  • Hire the inherited talent as independent contractors (if applicable to their scope of work and the nature of business relationship)
  • Relocate the talent to your country and hire them directly
  • Hire the talent as full-time employees through an employer of record (EOR)

📢 The EOR assumes the role of the official legal employer, shouldering the liabilities and obligations associated with daily employment matters and administrative functions like payroll management.

Using an EOR is an effective way to de-risk global M&As by:

  • Managing new system integrations
  • Ensuring global regulatory and legal compliance
  • Completing entity setup
  • Prioritizing talent retention
  • Reducing permanent establishment risk
  • Providing legal expertise for localized employment contracts, payroll, and tax requirements

If you're unsure about the best option for your specific case, as a starting point, engage legal advisors with expertise in cross-border transactions to navigate complex regulatory requirements and legal frameworks.

As a global payroll, compliance, and payroll solution, Deel has helped thousands of clients expand compliantly.

For example, Esports Entertainment Group managed its acquisition and absorbed over 30 contractors with Deel assisting with payroll and support.

🎯 Companies that migrate to Deel for assistance during M&A deals also benefit from our robust HRIS, which offers multiple features for talent management, regardless of their location and worker status.

4. Retaining and engaging inherited talent

EY Global reveals that 75% of key employees leave within three years of a major translation, but this outcome can be improved by aligning and optimizing the acquired workforce.

Deeply understanding the new business and team is not just the role of the M&A team or CFO, it's also the business of HR as it's so important to understand what they do, their values set, their programs and policies from onboarding to benefits and compensation to performance. An audit of this information and comparison against our own is where we start to understand the complexity of the change management and communication required to ensure success.

Casey Bailey, Head of People, Deel

Implementing retention strategies helps to address concerns and foster engagement, contributing to a positive work environment that encourages collaboration and innovation. These efforts should be incorporated from the very beginning, including the onboarding process

When preparing a retention strategy, consider the following key aspects to carry throughout post-acquisition for a successful M&A integration. 

Transparent communication

Provide open and transparent communication about the integration. Discuss the combined organization and the role of the inherited talent. Managers should take time to address concerns and uncertainties to build trust and reduce anxiety in their direct reports.

These communication efforts can be informal but well-structured and intentional through Deel's Slack plugin for 1-on-1s.


Recognition and acknowledgment 

Recognize the value and contributions of the inherited talent to the acquisition's success and overall business success. Acknowledge their skills and expertise, and make them feel appreciated and valued. 

Retention bonuses and incentives

Offer retention bonuses or other financial incentives to key employees to encourage them to stay during the transition period. These bonuses can be tied to specific performance metrics or milestones related to the integration process.

Career development and growth opportunities

Foster a culture of inclusion and collaboration that embraces the best aspects of both organizations. Facilitate cultural integration activities to promote understanding and build relationships among employees. Consider plugins such as Deel Engage plugins on Slack. which supports team members, fosters collaboration, and makes communication easy across different time zones.icon_reports

Maintain key management and leadership

Retain key managers and leaders from the acquired company with valuable knowledge and experience. Not only is their expertise valuable, but their continued presence beyond a short-term time frame can help ensure stability and encourage successful post-merger integration.

Offer flexible work arrangements

When feasible, offer flexible work arrangements to accommodate the needs of inherited talent, especially during the integration period. Consider remote work options or adjusted work hours.

Also, offer your workers an opportunity to get to know each other in person. Consider providing access to coworking spaces so that new team members can join in on working sessions, fostering a sense of belonging.

💻 With Deel, you effortlessly tap into the world of on-demand flexible workspaces wherever your workforce is. Learn how to do more for your team without the extra admin: Deel & WeWork.


5. Aligning organizational structures

Aligning organizational structures during a global M&A deal is essential to streamline operations, eliminate redundancies, and encourage teamwork for efficiency and collaboration across the newly-integrated entity.

Take the time to assess the current organizational structure and identify areas for alignment and optimization. Using tools, such as an org chart, helps to better understand the organization's structure and facilitate the transition.

With a clear understanding of the organization’s structure and workstreams, you can redefine roles and responsibilities to ensure seamless integration of inherited talent and facilitate cross-functional collaboration and knowledge sharing.

6. Developing succession plans

Developing a succession plan ensures a seamless transition of leadership, maintains business continuity, and retains key talent for sustained growth.

By offering tailored training, mentorship initiatives, and skill development programs, organizations can cultivate a pipeline of capable leaders who are ready to step into critical roles when needed, guaranteeing a steady and skilled leadership transition while nurturing the growth trajectory of the company.

💡 See also: Training Remote Workers: Your Ultimate Guide for 2023

7. Measuring and monitoring talent performance

Measuring and monitoring talent performance helps identify areas for improvement and ensure that synergies are being leveraged. Begin by establishing key performance metrics to assess the effectiveness of inherited talent. Next, conduct regular performance evaluations and provide feedback for improvement. 

Deel HR offers a range of integrations with other tools that optimize performance management, such as CultureAmp. You can adjust talent strategies using these tools and insights on performance results.

Integrate your inherited talent easily with Deel

If you want to harness the potential of inherited talent during a global M&A deal, workforce planning should be a top priority.

Deel empowers HR teams to focus on strategic integration and talent optimization by automating administrative tasks and managing compliance complexities.

Our global-first HR platform allows you to:

Request a demo from Deel today and see how we can help retain inherited talent during your global M&A Deel.

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