Mergers and acquisitions give organizations a path to transformation, expansion, and lasting value. Half of these mergers miss their targets, with analysts pointing to people-related issues as the most significant factor. Modern deal teams involve HR leaders from day one to evaluate culture fit, highlight retention risks, and quantify hidden liabilities (pension gaps, stay bonuses, etc). HR specialists must make rapid headcount and talent decisions based on incomplete data, and workforce-reduction analyses can shift as business needs evolve. For token projects or blockchain development firms undergoing crypto M&A, these human considerations weigh as heavily as securing treasury keys.
This article examines the influence of HR on M&A outcomes and outlines strategies and practices that support a smooth transition.
Phase-by-phase overview of HR’s responsibilities
To simplify, HR’s role in a merger or acquisition is to ensure that employees experience a smooth transition post the M&A.
Phase 1: Pre-merger planning and HR due diligence
HR teams ensure mergers and acquisitions comply with local employment laws, including obligations in some jurisdictions to preserve existing terms and conditions for transferring employees. During the investigative phase, they run due diligence that reaches beyond financial and operational checks to examine the culture and workforce dynamics within the target organization.
Practitioners evaluate cultural fit, compare policies, and employment terms. Another important point is identifying surface-level people-related risks, such as unresolved labor disputes, compliance gaps, or heavy reliance on a few key individuals. Collecting all entitlements in a central repository later simplifies group distinctions and supports swift responses to post-transaction queries.
HR’s checklist
- Verify that the target organization’s employment practices and contract terms comply with legal requirements in every jurisdiction.
- Assess benefits, pay frameworks, and collective bargaining agreements, noting differences that could complicate integration.
- Pinpoint key talent whose skills, knowledge, or leadership remain critical and start devising retention plans.
- If the target runs token-based compensation, HR must verify vesting smart contracts, cliff schedules, tax treatment, and other issues that a finance-only team might miss.
Phase 2: Integration strategy development
When a deal progresses from potential to likely, HR teams help craft the integration plan. They align their people strategy with the broader business goals and incorporate workforce considerations into every workstream. Tasks include reconciling policies and practices, designing the new organizational structure, and developing a change management program.
HR’s checklist
- Outline the future organizational structure, noting how roles and reporting lines will change, and prepare to address questions on restructuring.
- Develop retention plans for top performers to prevent competitors from poaching critical talent during the transition.
- Begin by creating a cultural roadmap that maps each entity’s values and working styles. This assessment lets HR articulate a shared vision and identify areas that require alignment or adaptation.
- Crypto firms should also secure developers who hold privileged keys, as a single resignation could stall protocol upgrades.
Phase 3: Employee communication and engagement
Clear communication shapes M&A outcomes because ambiguity and fear often dominate employee sentiment during transitions. HR manages change with transparent, empathetic, and consistent messages that explain what is happening, how staff will be affected, and what lies ahead. Acting as the link between leadership and the workforce, they translate complex decisions into plain language that fosters trust rather than anxiety.
In addition to formal channels, HR can appoint influential employees as change agents who reinforce the narrative and direct questions to the relevant teams, providing colleagues with accessible points of contact throughout the process.
HR’s checklist
- Create a structured plan for employee engagement and communication.
- Tailor messages for each audience, acknowledging uncertainty while explaining the rationale behind the deal.
- Set up two-way channels, such as Q&A forums, feedback sessions, and pulse surveys, so employees can voice their concerns and stay informed.
- Sustain retention measures through stay bonuses, development opportunities, or early involvement in decisions to keep top performers committed during the transition.
Phase 4: Finalizing agreements and workforce adjustments
Once the transaction closes, HR shifts to implementation, formalizing employment arrangements for the merged workforce, confirming legal compliance, and harmonizing contractual terms to ensure seamless integration. The team reviews and finalizes employment agreements, manages benefit transitions, and completes any required union or regulatory reports as needed.
HR’s checklist
- Manage workforce changes such as layoffs, reassignments, and relocations with accuracy and empathy.
- Carry out each action in line with labor laws and company values, and provide outplacement or other support for affected employees.
- Integrate HR systems, payroll, and operational policies without disruption, as errors such as late pay or missed benefit enrollment can erode trust at a critical moment.
Phase 5: Post-merger integration and cultural alignment
Once the deal closes, HR guides the integration by fostering a unified culture, promoting employee engagement, and sustaining momentum for change. The aim is to co-create a shared culture that combines the best elements of both organizations and supports their strategic objectives.
Rather than merging cultures by force and hoping for the best, HR should deliberately study each environment and design an integration approach that respects their distinct qualities. Culture clashes derail more integrations than technology does. M&A Science’s HR-integration podcast warns that ignoring cultural fit “is like mixing oil and water and expecting champagne.”
HR’s checklist
- Develop targeted change-management initiatives such as leadership alignment, behavioral modeling, cultural onboarding, and capability-building programs to help employees adopt new ways of working.
- Align performance management systems, career frameworks, and learning opportunities with the updated organizational direction.
- Reinforce the desired culture through continuous feedback loops, visible leadership actions, and purposeful storytelling.
- Maintain retention measures until the organization achieves a stable and trusted state, and monitor signs of disengagement, burnout, or low morale that could impact performance.
HR should be first in and last out
HR belongs at the table from the first diligence call to the last integration milestone. Early involvement prevents missed opportunities and keeps people's considerations front and center. Successful mergers and acquisitions depend on how employees are led, supported, retained, and motivated to shape a shared future. Legal, financial, and operational frameworks set the stage, yet HR directs the human transition, pairing structure with empathy, turning uncertainty into clarity, and translating legacy cultures into a unified vision.
