6 Major HR Problems in International Mergers & Acquisitions
Being an HR in the midst of International Mergers & Acquisitions is no cake-walk. Avoid these 6 common mistakes or take our help for a smooth process.
A successful merger or acquisition hinges on mindful integration practices, clear communication, and a strategic approach to organisational changes
Here are 6 key pitfalls to avoid, backed by insights on the challenges faced by senior HR and International Mergers & Acquisitions professionals.
1. Resist the Urge for Immediate Workforce Reductions
One of the most common M&A missteps is rushing to make workforce cuts immediately. Reductions made in the first two months often correlate with higher failure rates, as this abrupt approach fails to account for the acquired team’s dynamics, skills, and culture.
CHROs and HR leaders know that sudden layoffs can damage trust and morale, creating instability at a critical time. A measured, phased approach that assesses team fit, redundancy, and strategic goals is essential for preserving the organisation’s value.
Beyond Borders HR’s Approach:
We advise assessing the acquired company’s strengths, encouraging a due-diligence period where no drastic changes occur. This not only allows a better understanding of the workforce but also provides time to align with the overall organisational strategy.
2. Avoid Large-Scale Layoffs Early On
Reducing more than 10% of the acquired workforce early in the integration phase risks creating a hostile, high-stress environment. Studies have shown that the likelihood of failure grows with larger-scale layoffs, as stress and burnout skyrocket.
Layoffs also exacerbate employees’ uncertainty and negatively impact collaboration and morale—key assets for long-term synergy.
Beyond Borders HR’s Approach:
We recommend senior executives consider the skills and strategic value of the target company’s workforce before implementing any cutbacks. Identifying skill redundancies and gaps after integration gives a clearer picture of needed adjustments and allows for a more gradual, respectful approach to staffing changes.
3. Use Objective and Consistent Criteria for Position Changes
M&As often require a degree of workforce reshaping. However, arbitrary layoffs or role reductions create an atmosphere of fear and disconnection.
For example, an acquisition where positions are removed without transparent reasoning often sees increased anxiety among remaining staff, affecting performance and retention.
HR and senior management must create clear, fair criteria for workforce adjustments to mitigate feelings of unfairness or favouritism.
Beyond Borders HR’s Approach:
When reductions are necessary, we implement fair, consistent, and well-communicated criteria for evaluating roles. We work alongside our clients to ensure that decisions are aligned with long-term strategic objectives rather than immediate financial pressures, supporting smoother transitions and preserving employee engagement.
4. Prevent Unplanned Turnover of Key Talent
Rapid restructuring frequently leads to unexpected resignations, especially among executives and exempt employees, which can severely hamper integration.
Talented individuals leaving unplanned due to insecurity or lack of trust pose a considerable risk to M&A success, as they often hold critical knowledge and experience essential for post-merger stability.
Beyond Borders HR’s Approach:
We emphasise creating a clear, structured retention plan tailored to key leaders and skilled employees, focusing on transparent communication and assurances that help minimise uncertainty. This strengthens the organisation’s overall stability, reducing the risk of critical knowledge loss.
5. Avoid Drastic Restructuring and Centralisation
M&As often come with structural adjustments, but heavy-handed centralisation—especially when done early—typically leads to cultural clashes and employee resistance.
For instance, attempting to replace established policies with those of the acquiring firm may erode trust, as employees feel their organisational identity is disregarded.
Managing for cultural alignment and gradual policy alignment enables smoother acceptance of new procedures.
Beyond Borders HR’s Approach:
We advocate for gradual integration of policies and procedures that respect both firms’ cultural attributes, allowing time for the acquired company’s employees to adapt and align with the broader mission.
6. Exercise Caution with Centralisation of Key Functions
While centralising decision-making processes can streamline operations, it can also create friction if not managed with sensitivity. An overly centralised approach may come across as dismissive of the acquired firm’s culture, stoking resistance from employees accustomed to different operational standards.
Beyond Borders HR’s Approach:
We support an approach that respects the autonomy of the acquired firm’s management where feasible, helping retain its functional strengths. We work with our clients to balance centralization with local flexibility, ensuring that core strengths are maintained and contribute to a stronger unified entity.
How Beyond Borders HR can help you with International Mergers & Acquisitions
In international Mergers & Acquisitions, the goal is to strike a balance between strategic change and respect for the existing workforce. By understanding and anticipating these common pitfalls, companies can manage their integration more effectively and ultimately achieve a successful M&A outcome that respects both the financial and human aspects of the merger
Through strategic planning, effective communication, and sustained employee engagement, our expert HR professionals drive successful mergers, supporting a future-ready, globally integrated workforce which is ready and set to hit go on achieving your business objectives.
With Beyond Borders HR, you can rest assured that your International M&A activities are in expert hands while you focus on growing your business.
