Post-M&A boom, the talent crisis is just beginning

Global deal value reached $2.8 trillion in the first half of 2026, up 48% year on year and the highest first-half total on record, while the number of deals fell 9% to a six-year low. More value is now concentrated in fewer transactions, and the consequences of getting any one of them wrong are rarely financial in origin. They surface after signing, at the point where uncertainty peaks and the people the deal was built around begin deciding privately whether to stay or to move on.

EY research outlines the scale of that risk plainly, finding that 47% of employees in key roles leave within a year of a transaction and 75% within three years. Those are usually the people an acquiring organisation paid a premium to access and losing them at such an alarming rate erodes the overall success the deal was meant to deliver in the first place. The case for investing in leadership capability earlier rests largely on those numbers, because by the time most organisations turn their focus to retention, decisions have already been made.

People respond to a deal long before anything formally changes

Behavioural science tells us that we learn from our environment, adjusting what we do in response to what we observe, and an acquisition creates an unusually intense environment to learn from. Before a deal even becomes public, employees are reading what leaders say, noticing what they avoid saying and gauging how confidently their own manager handles a direct question. Silence is not neutral in that setting, and neither is inconsistency between leaders. Both are read as critical information when nothing more concrete is available.

Culture is a set of behaviours rather than a set of values

Unfortunately, culture is often treated as something to compare on paper during diligence and reconcile once the deal has closed. The reality is that in practice culture is expressed through behaviour, for example, how decisions actually get made, what happens when somebody disagrees with a senior leader and which rules are quietly ignored. Two organisations can hold near-identical values while rewarding entirely different conduct, which is why the differences that matter usually surface only once people are asked to work together. 

McKinsey has found that organisations managing culture effectively during a deal are more than 40% more likely than their peers to meet or exceed cost synergy targets and up to 70% more likely to achieve revenue synergy targets, which roots culture deeply inside the economics of a deal rather than alongside them. 

Managers absorb the uncertainty and are expected to reduce it

Managers, often referred to as “the execution layer,” occupy one of the most difficult positions throughout. They are asked to hold their own uncertainty while simultaneously lowering it for everybody else, usually without much more information than their teams have. Under cognitive load our behavioural range narrows and we fall back on practised responses. This is because neurologically speaking, familiar behaviour requires less effort and creates a feeling of safety. This quickly becomes a problem when the situation calls for something new. 

DDI's Global Leadership Forecast found that leaders named setting strategy and managing change as their two greatest skill gaps while only 22% of HR teams prioritise developing those capabilities. This means that in addition to supporting their teams through the complexities of often massive change, a merger asks managers for unfamiliar behaviour when they have least capacity to acquire it. 

The two sides of a deal do not experience it the same way

Often an acquisition is a single transaction but two different experiences, and this distinction matters more than an org chart suggests. People in the acquiring organisation are usually absorbing a change to a structure they already understand, while those on the acquired side are being asked to place their careers with an organisation they have no history with, working only from what they can observe of it. Regardless of the specific circumstances, managers within the organisations are experiencing similar effects, often finding themselves interpreting a new employer's behaviour at the same time as explaining it, which is why the acquired side tends to lose people first.

What should be done before a deal completes

Much of this is a sequencing problem rather than a willingness problem, and the people function is often not in the room early enough to address it - WTW's M&A Barometer found that fewer than one in five respondents believe their HR teams are properly included in preliminary negotiations. Earlier involvement changes leadership alignment first, since the two (or more) leadership teams need to establish where their expectations differ and what is non-negotiable while those disagreements can still happen privately. Once a deal is public, every unresolved difference between them becomes something the people within their respective organisations have to interpret, usually in the least generous way available.

It also changes diligence, which can examine behaviour rather than stated values while there is still time to plan around the answer and allows organisations to identify early which managers will carry the greatest weight. Any coaching or development provided is easier to judge when briefed against the strategic business outcomes the deal depends on rather than against generic goals.

None of this removes uncertainty from a deal, but it does increase the capacity inside the organisation to adjust and operate successfully while that uncertainty lasts. In a year defined by record deal values, that capacity is worth building before it is needed rather than after the people it was meant to protect have started to leave.