Maintaining the talent pipeline during M&A

Maintaining the talent pipeline during M&A

Posted by Tom Joseph, Bill Cleary, and Bhawna Bist on March 21, 2017.

It’s no secret that mergers & acquisitions (M&A) can disrupt ongoing business activities. This disruption also impacts HR customers, both internal (executives, managers, employees) and external (applicants, retirees, vendors/suppliers). Leaders often turn their attention inward during M&A, leaving one group critical to the growth of the business overlooked: the external talent market.

M&A activity amplifies the importance of talent acquisition (TA), especially when the deal results in unplanned attrition or new growth initiatives. In both of these scenarios, the business relies on a strong talent pipeline to fill key roles. At the same time, M&A also tends to make TA vulnerable in three areas: branding, candidate experience, and process and technology.

TA both shapes and supports the organization’s talent brand, giving candidates visibility into the organization’s culture, values, and employee value proposition. M&A can disrupt that picture, creating uncertainty about the combined organization’s talent brand. In one recent example, when a large consumer products corporation acquired a start-up firm to enter a new market, high-potential candidates were concerned that the unconventional culture of the start-up would be replaced with corporate bureaucracy, and jeans exchanged for suits and ties.

From the candidate experience perspective, M&A has the potential to disrupt hiring due to internal changes to the TA organization. This is often a result of disparate processes between the target and buyer. It is essential to identify potential differences in the hiring process early and develop a consistent approach across the combined organization.

TA processes & technology can also be disrupted. Leaders should prepare for both process harmonization and technology consolidation as early as possible, while also being mindful of interim solutions to limit disruptions to sourcing and hiring activities.

If these areas are not addressed effectively throughout the deal life cycle, businesses risk putting the TA function on hold and jeopardizing the organization’s ability to attract the best talent. One frequent example is when pending news of M&A essentially freezes the talent pipeline, as candidates hesitate to apply due to uncertainty of future business priorities. This risk may become a reality when the news of the M&A becomes public, as leaders sometimes see a drop in number of qualified applicants.

To help mitigate these risks, the TA team should be prepared with candidate-facing messaging. This will emphasize the opportunities within the new organization, and can be targeted at both internal and external candidates. Additionally, the TA team should leverage the power of social media to get candidate-facing messaging to market as soon as legally possible. In most cases, the TA team can avoid these potential risks through early planning and resource allocation throughout the deal life cycle.

Pre-Day 1: Planning for success

The TA team plays a role in the overall process of aligning talent for the combined organization. By establishing expectations and engaging TA early in M&A planning, leaders can anticipate the deal-related impact on both external candidates and internal resources. Proactive TA leaders should take action in each of these areas:

  • Branding—Working with business leaders to tie the new employee value proposition and talent brand to the deal value drivers where possible. For example, if the deal is expected to generate new revenue growth and product opportunities, the TA process would highlight these new roles/experiences for candidates.
  • Candidate Experience—Identifying and planning for any interim processes that may need to be in place while the organizations merge, and planning for proactive candidate communications to mitigate any disruption to the application process is essential. Additionally, TA should also examine the cumulative open demand for candidates across both the target and the buyer to help develop future hiring projections, eliminate redundancies, and adjust talent pipeline criteria based on new growth initiatives.
  • Process & Technology—Understanding anticipated or expected cost savings due to external vendor/technology consolidation will be important to operating the TA function. Also, the overall redesign of the TA function technology, as well as the downstream implications on other technologies, will be critical.

Day 1+: Executing on the change

Post-close, TA leaders should implement Day 1 communications aligned to the new business entity and focus on driving consistent messaging across these areas:

  • Branding—Aligning TA job boards and external career sites with the new branding and updated legal entities as a result of the M&A activity.
  • Candidate Experience—Arming recruiters and hiring managers with key messages to share with candidates, given their frequent touch points and roles as the external face to the candidates.
  • Process & Technology—Leveraging TA technologies to send proactive mass candidate notifications and create a scalable, consistent, and timely communication experience.

Post-merger: Long-term optimization
While M&A activity can be disruptive to short-term activity, it also can create opportunities to build on the existing organization, processes, and technology. TA leadership should view M&A as a catalyst to optimize the combined function, which may include:

  • Branding—Continuing to evolve and communicate the new employer brand as the business moves beyond Day 1 and the dust settles.
  • Candidate Experience—Proactively planning, monitoring, and communicating additional changes that candidates need to be aware of, especially in light of ongoing changes to people, process, and technology.
  • Process & Technology—Thinking broadly, as this area may have the greatest potential for long-term change as the business moves away from any interim processes that were in place for Day 1 and drives toward cost savings. For example:
    • Organization: There may be redundancies across the combined TA function (i.e., use of more than one RPO firm across both organizations), which presents an opportunity to increase savings and efficiencies for the new organization. On the other hand, the M&A activity may spark a new talent agenda requiring a realignment of existing resources to recruit for new skill sets.
    • Processes: In the immediate aftermath of M&A, continuity of services will be a priority. However, TA leadership should then shift focus to long-term optimization of the function. This likely includes streamlining TA processes and harmonizing policies.
    • Technology: If the current landscape of TA systems was evaluated prior to Day 1, leaders should now be in a position to decide which technologies will best support the combined organization. Detailed planning is necessary to effectively implement these changes with limited disruption to services and to capture very important pieces of TA data, such as the existing candidate pool from the acquired organization.

One final consideration for TA during M&A activity is the interconnectedness with other parts of the business. In most organizations, TA is the first opportunity to engage talent, but there are many handoffs that occur throughout the hiring and onboarding process. For example during a Life Sciences acquisition, we saw TA actively engaging across total rewards, finance, and talent management to understand the impacts to each group, and coordinate planning for harmonized offer letters, budget approvals, and onboarding activities.

TA is on the front line of the ongoing war for talent, and M&A will almost inevitably add stress to talent acquisition services. However, proactive planning can help minimize disruption in the short term, build the foundation for future optimization, and ultimately maximize the value achieved from M&A activity—all while keeping the vital talent pipeline flowing.


Tom Joseph is a principal in Deloitte Consulting LLP and has more than 15 years of M&A consulting experience. He works closely to plan integration strategies, plan for an issue-free “Day 1,” manage enterprise-wide organization readiness, and design the cross-functional integration program.
Bill Cleary, GPHR, is a senior manager in Deloitte Consulting LLP’s US Human Capital service area. Bill’s primary focus has been on complex global HR transformation projects with extensive experience focused on talent acquisition.
Bhawna Bist is a manager in the Human Capital practice of Deloitte Consulting LLP, specializing in HR Transformation. She has more than 14 years of cross-industry and consulting experience advising global organizations and leading strategic transformational initiatives.

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