Find your portal

Top 5 talent development challenges after mergers and acquisitions

Most mergers and acquisitions (M&As) are kept top secret until they happen. Of course, if the information got out early, it could affect how both companies perform on the stock market.

Furthermore, both organizations usually present their assets in the best positive light in these instances. With only a handful of people in the know, there's less chance of drawing an underwhelming picture of how the companies are doing.

After the M&A is completed, it's a different story. As soon as all employees are informed, the intense worrying begins. It's common knowledge that when two or more companies become one, some roles become redundant. According to most studies, between 70 and 90 percent of acquisitions fail. This overwhelming number is primarily due to failure to integrate. The management usually puts tremendous pressure on achieving immediate financial results to make the merger seem viable.

The most significant talent development challenges after mergers and acquisitions

Here are the challenges that talent development specialists are working on to mitigate the risks of losing top talent after M&As:

  1. Losing top talent

    After an M&A, the managerial positions are the first to become redundant, and people who have been in a company enough to get a leadership position know this. These people are usually top talents and therefore highly sought after on the job market. Many might not even leave for fear of being let go, but they do not want to deal with management change after a merger.

    This is especially concerning in today's workforce crisis. All companies are fighting over highly skilled employees and the recent global crisis has rendered proficient leaders in high demand. While it may be challenging to advocate investing in a talent retention program right after an M&A, it is also imperative to direct resources towards one.

    Read more: The best 3 strategies on retaining top talent

  2. Redundancy concerns

    The scenario in which all employees from both companies stay on, with the same leadership structure, is almost utopic. It would also be highly counterproductive and lead to demotivation and low efficiency.

    One of the challenges talent development executives face is to partner with existing and future management and set the guidelines for establishing which employees will be retained. Often, the criteria will not be talent, merit, performance, or experience, but the new management choosing to keep on their own employees. These highly uncomfortable conversations are nonetheless essential to a smoother integration.

  3. Flawed communication

    As I’ve already mentioned, M&As are usually kept secret and announced once completed. This, of course, is not comfortable for employees. There's usually surprise (not altogether pleasant) and confusion.

    While the financial aspects are negotiated and clear in the contracts, what happens after and who will be in charge is still up in the air. With a lack of an apparent new leadership structure, it isn't easy to know even who to ask for more information or be confident that they will be able to share it. This is tricky because good organizational communication needs to be clear, transparent, and to the point. All three are tough to achieve in the confusing context of a recent M&A.

    Read more: Trust: the superglue your organization needs

  4. Different L&D approaches

    As is the case with most departments after an M&A, the L&D function will also be doubled once two companies become one. The differences in their approaches may be vast, with one company preferring in-person training and the other focusing on self-directed learning through their learning platform.

    Aligning divergent learning strategies is a rather tall order. There are several factors to be taken into account, such as the organizational culture of the two entities, the employee demographics and the learning programs that were previously deployed. Costs and choosing the most effective options are always of concern.

  5. Merging organizational cultures

    If history taught us anything about colonialism is that the clashing of two cultures is complicated — to say the least. While it has significantly smaller proportions, an M&A is usually similar to this: two different entities with one having the upper hand due either to its size or its financial power.

    The situation is even more complicated if the two companies are also from different countries with significant cultural differences and management styles. The talent development function needs to consider this and plan to adapt to diversity.

    Read more: What to do about your organizational culture after the crisis


M&As are widespread, and companies all over the globe strive to find the right solutions for managing such considerable changes. Talent development teams play a significant role in the process, and they need to be given a seat at the table sooner rather than later to address the many challenges ahead.