There’s a scene in the 1990 romantic comedy ‘Pretty Woman’ where Richard Gere’s character Edward Lewis describes his job as “buying and selling companies.” He makes it sound simple. Only, it’s not. Listen closely; we’re heading into M&A (Mergers and Acquisitions) territory now. The process is more complicated than that.
Investopedia describes M&A as businesses combining through different types of transactions. You knew that. What you might not be familiar with is when it occurs on a global scale. The intricacies and bureaucratic red tape are only the tip of the HR mountain.
Here’s some food for thought. Deloitte says that up to 70% of mergers fail to deliver their intended value. The problem arises due to mismanaged people and cultural issues. Not to worry. In this article, we’ll check how HR practitioners can lead a successful M&A campaign across borders.
The Expanding Role of HR in Global M&A
Viewing HR’s role as limited to employee handbooks and benefits is archaic. Today, HR teams are expected to steer people strategy from due diligence through post-merger integration. In global M&A, this includes:
- Navigating complex labor laws across borders
- Aligning benefits, pay structures, and job roles
- Supporting leadership transitions
- Fostering cultural inclusion
- Retaining top talent amid uncertainty
HR now wears many hats, from strategist to compliance expert to change manager. A successful cross-border merger depends on how well people are prepared, supported, and unified.
HRD Connect emphasizes that early HR involvement increases the chances of M&A success by proactively addressing workforce challenges before they spiral. And when we say “early,” we mean as soon as the M&A idea is floated, not six weeks after the contracts are signed.
By participating in due diligence, HR can flag talent liabilities, benefits mismatches, or cultural incompatibility that could derail integration later.
Common Challenges HR Faces in Global M&A
Cultural Clashes and Misalignment
Merging companies is not just about combining operations, but about uniting people with diverse work styles, values, and expectations. Culture clashes are one of the primary reasons post-merger integrations fail, particularly when companies expand internationally. Forbes notes that leaders must invest time in understanding cultural nuances, from communication styles to decision-making hierarchies.
HR plays a critical role in identifying these differences early and creating a cultural roadmap for assimilation. Cultural mapping is a diagnostic exercise that looks at how employees from both organizations behave, lead, and collaborate. Hofstede’s cultural dimensions can help uncover how hierarchical or individualistic different workforces might be.
If one company thrives on informal brainstorming sessions and the other expects formal sign-offs and weekly reporting, you’ve got friction waiting to happen. HR can act as a translator and a bridge.
Compliance Across Borders
Global M&As require navigating unfamiliar local laws, employment contracts, and tax systems. Missteps can be costly when integrating a global workforce. This is where solutions like a global employer of record (EOR) come into play. EORs act as the legal employer on behalf of your company, ensuring compliance with local employment laws while managing global payroll, employment contracts, and health insurance.
These platforms enable HR to onboard new employees quickly and avoid regulatory formalities. Remote, a global HR and payroll platform, suggests enlisting a staffing agency that supports every hiring strategy. You have fewer vendors, fewer admins, and fewer record services.
Beyond onboarding, EORs are crucial during offboarding or restructuring phases. The process ensures compliance with termination laws that vary wildly between countries. In France, for example, severance processes are legally rigid, while in the U.S., employment is largely at-will. HR must navigate both seamlessly.
Employee Uncertainty and Retention
Change creates anxiety. A global merger can leave employees feeling unsure about their future. Without clear communication and assurance, organizations risk losing key talent. Transparent leadership and early engagement are essential. HR teams must craft messaging that aligns with company values while endorsing coaching, counseling, or mental health programs.
The ROI of investing in employee mental well-being during transitions can boost engagement, reduce turnover, and improve post-merger productivity. A well-timed FAQ document or “Ask Me Anything” town hall can go a long way.
Keep in mind: silence breeds fear. HR should coordinate with internal comms to provide steady updates and honest answers, even when the answer is, “We don’t know yet.” Engaging line managers as trusted communication conduits also helps morale and reduces rumors.
HR Opportunities to Drive M&A Success
Despite the challenges, global M&As are an exciting opportunity to shape a stronger, more unified organization.
Designing the New Organizational Culture
Post-merger, HR can become a culture curator, blending the best of both legacy companies to build something better. A few team-building events are not going to cut it. Use employee feedback surveys, leadership interviews, and cultural assessments to steer you in the right direction. Forbes HR Council recommends actively engaging employees in shaping the new vision to encourage ownership and trust.
One practical tactic is a “culture champion” group where employees from both sides serve as culture ambassadors. They report back on how integration feels on the ground. These voices help HR identify pain points early and adjust accordingly.
Modernizing People Processes
A merger is the ideal time to audit and modernize outdated HR practices. This includes aligning compensation models, upgrading HR tech stacks, and revisiting performance metrics.
According to Deloitte, smart organizations use this window to streamline inefficiencies and build a more agile, people-centric model. Think cloud-based HRIS platforms that accommodate different tax laws and languages.
Here’s your chance to reinforce DEI initiatives by designing inclusive policies from the ground up. Instead of trying to retrofit inclusion into a legacy system, use the merger as a reset point to align practices with a global, diverse workforce.
Enabling Agile Global Hiring
Amid M&A, business needs can shift in the blink of an eye, requiring new skills or roles in new regions. Rather than dealing with the bureaucratic maze of setting up legal entities, HR teams can utilize global EOR services to hire and manage talent.
This kind of flexibility guarantees that momentum isn’t lost while the legal or financial teams catch up. It also gives HR more time to focus on people instead of paperwork. Hiring in new markets also opens up talent pipelines you may not have considered before. HR’s role is to strategically guide how and where the business grows its human capital.
Post-Merger
The first 100 days following a merger are vital. This is where HR must transition from planning to execution with empathy and accuracy. Is your leadership aligned? If not, define and communicate clear reporting structures. Onboarding is the “new normal” for global talent. Create onboarding programs not only for new hires but for all employees adjusting to the merged environment.
Retention monitoring takes a front seat. Track turnover trends and conduct stay interviews to identify concerns early. Familiarize yourself with local labor laws and use a global employment platform to avoid costly mistakes when hiring international employees.
Don’t forget to keep communication channels open. Employee pulse surveys and direct feedback platforms can pinpoint areas that need more attention. Six months post-merger, the work isn’t done. HR must stay vigilant. Continue collecting feedback, run “temperature checks,” and revisit what success looks like.
