HR not ready for expected rise in M&A deals

Two-thirds of HR professionals have expressed concern about their lack of readiness for the anticipated surge in merger and acquisition (M&A) activities. Despite a sluggish start in 2025, over half of companies (54%) are optimistic about the uptick in M&A deals, as per a recent survey conducted by WTW, a distinguished global advisory and solutions firm. A mere 19% foresee a decline in deal-making.

Feeling ill-equipped to navigate potential M&A transactions is a prevailing sentiment among HR teams, with 65% admitting to being inadequately prepared. Existing challenges regarding HR due diligence, which encompasses a profound examination of a target company’s HR policies to gauge potential liabilities and assess risks related to the workforce, have been acknowledged by respondents.

Data completeness, quality, and integrity emerged as the primary hindrances in the due diligence process for 66% of HR teams. The mounting pressure of data requisites, coupled with accelerated timelines for due diligence, underscores the importance of sellers being well-prepared to enhance the value of their deals. Alarmingly, less than one-fifth of survey participants believe that their HR departments have been sufficiently involved in early-stage negotiations.

Jim Plomer, WTW’s senior director of integrated global solutions for M&A, highlighted that the dormant period in deal-making during the initial half of 2025 suggests a latent demand that could instigate a flurry of transactions once market conditions stabilize. Many companies harbor apprehensions about the evolving landscape, aggravated by the potential need for fast-tracked timelines to close deals by year-end.

Plomer emphasized the pivotal role of HR in the prelude to M&A discussions, advocating for a robust assessment of people-related aspects such as culture, values, and fitment. Proactively identifying challenges and opportunities related to personnel can significantly influence the value of deals and smoothen the integration process.

80% of HR professionals involved in the survey have prioritized identifying key talent with specialized skill sets below the executive level. Notably, retaining non-executive talent post-acquisition is perceived as the pinnacle of integration success by 50% of respondents, eclipsing leadership retention (29%). Challenges related to aligning cultures outweigh resource constraints and technological hurdles, with 74% of non-US firms and 54% of US entities highlighting cultural alignment as the primary challenge.

A noteworthy finding reveals that 65% of participants believe that generative AI will revolutionize the deal-making landscape within the next two years, albeit adoption remains tentative. A cautious approach prevails, with organizations opting to observe AI’s efficacy before embracing its full potential in M&A processes.

WTW’s global Barometer Survey, undertaken biennially to discern current and future trends in M&A and divestiture scenarios, encompassed feedback from over 80 HR leaders across North America, Europe, the Middle East, and Asia-Pacific, actively involved in steering their companies’ deal-making journeys.