In a merger or acquisition, much of the value sits in the people who know the customers, run the operation and hold the business together. People risks are easy to underestimate when the focus is on price and structure.
This article gives general information, not legal advice. Employment law questions on a transaction should go to a specialist employment or corporate lawyer.
Before the deal: HR due diligence
The aim is to understand what you are taking on, and what it will cost to make the combined business work. Typical areas to review are:
- Workforce: headcount, roles, locations, and how people are engaged, including employees, contractors and agency workers.
- Contracts and terms: notice periods, pay and benefits, bonus and commission schemes, and any differences between groups of employees.
- Key people: who the business depends on, whether they are tied in, and what they might expect from the change.
- Liabilities and disputes: live grievances, disciplinary matters, claims, and areas where pay or holiday practices may be non-compliant.
- Policies and compliance: whether handbooks, right-to-work checks and other basics are in order.
- Culture and management: how decisions are made, how people are led, and how different this is from your own business.
Where the deal is a transfer of a business, employment rights can transfer automatically under TUPE, so understanding the terms of the people who move is part of the price.
Between signing and completion
Agree what will be communicated, to whom and when. Silence tends to be filled by rumour, and the people you most want to keep are often the first to hear from other employers. Where consultation obligations apply, build the time for them into the plan.
After completion: integration and retention
- Be clear about structure and roles early, so people know where they stand.
- Take care when aligning terms. After a TUPE transfer, changes to terms because of the transfer are restricted, so harmonising pay and benefits needs planning and advice.
- Retain the people who matter with clear roles, fair reward and honest conversations about what is changing.
- Bring policies and ways of working together in a sequence the business can absorb, rather than all at once.
- Check in regularly on morale, attrition and how the combined teams are working together.
Starting early helps
Involving someone senior in HR before terms are agreed gives you time to price the people risks, plan the communications and make choices about structure while you still have options. Lindsay Barnett supports businesses with people due diligence before a deal and with integration and retention after it, and will flag where specialist legal advice is needed.