People deals: navigating workforce risk and retention in M&A
June 2026 | TALKINGPOINT | MERGERS & ACQUISITIONS
Financier Worldwide Magazine
June 2026 Issue
FW discusses workforce risk and retention in M&A with Chau Woeste and Amy Bishop at KPMG.
FW: Why does human capital matter in today’s M&A environment? How are you seeing acquirers and divestors reassess the strategic importance of talent, organisational capability and workforce risks at the outset of a transaction?
Bishop: Human capital is a core deal lever rather than a downstream integration consideration, as value increasingly sits in intangible assets, capability, leadership, customer relationships and know-how. The success of a transaction is determined by how effectively people and organisational dependencies are understood and managed from the outset. Acquirers and divestors are therefore embedding people in deals considerations earlier in the transaction lifecycle to test deal feasibility, manage execution risk and protect value through separation and integration. Those that proactively assess workforce capability, value-critical roles and people-related risks are better positioned to accelerate execution, deliver synergies and create sustainable organisations beyond day one.
FW: What factors are driving the shift in how organisations identify and evaluate the people- related value – and downside risk – within both acquisitions and separations? How are organisations determining which roles, skills and individuals are truly ‘critical’ to future performance?
Woeste: Talent retention is often a critical aspect of value protection in deals – both from a transition and a value creation end state perspective. This can include knowledge of critical legacy systems or key relationships, for example key scientists in biotech deals, or engineers and technologists in tech deals. What we are increasingly seeing is that artificial intelligence (AI) is becoming a key factor in people-related value. Growing demand for AI diligence from a technology standpoint is quickly followed by the need for insight into the people and skills required to realise value from AI. There are also clear value-creation opportunities in considering what an AI-optimised organisation might look like, and what this means for future roles and skills.
FW: How are organisations approaching the challenge of securing critical talent? What methods are proving most effective for identifying who is critical?
Bishop: Securing critical talent has become a central focus for organisations navigating separation and integration, with leading deal teams taking a more deliberate, insight-led approach to identifying and protecting value-critical capability. Rather than relying on hierarchical titles or broad population reviews, organisations are applying a value-based lens to determine which roles, skills and individuals are essential to business continuity, regulatory compliance and future value creation. This includes mapping workforce dependencies to key value drivers, stress testing operating models to identify single points of failure, and assessing where institutional knowledge, customer relationships or scarce technical expertise are concentrated. The most effective approaches combine qualitative insight from leadership with targeted people analytics, enabling acquirers and divestors to prioritise retention, and focus engagement efforts and sequence separation, or integration activities, in a way that stabilises critical talent through periods of disruption.
“Human capital is a core deal lever rather than a downstream integration consideration, as value increasingly sits in intangible assets, capability, leadership, customer relationships and know-how.”
FW: How do employee expectations evolve during a deal – whether they are joining a new organisation or preparing to exit one? What communication and engagement approaches are most effective in retaining key people and maintaining productivity during uncertainty?
Woeste: We have learned that creating an outstanding employee experience is critical to retention. Having a clear strategy for cultural alignment, or assimilation, and supporting people to psychologically and emotionally ‘say goodbye to yesterday’ so they can ‘say hello to tomorrow’ is central to deal talent retention and, ultimately, deal value. In fact, our data shows that when organisations deliver on an effective employee experience and cultural assimilation, engagement scores can reach up to 99 percent, with unwanted attrition reduced by more than 50 percent during deals – powerful outcome metrics that underline the value of getting this right.
FW: How are companies balancing financial versus other means of retaining people in M&A?
Woeste: Organisations sometimes rely too heavily on financial incentives and overlook the human and emotional factors that genuinely motivate individuals. For example, giving a key individual the opportunity to help shape the future and play an active role in driving an integration programme can be more motivating over the long term than a retention bonus alone. We also see examples of unintended consequences of financial incentives, such as earn out arrangements or ‘golden handcuffs’ that keep a founder or chief executive in situations where they resist integration or change in order to retain control and deliver against the earn out.
FW: What practices are emerging as most effective in aligning leadership teams, operating models and organisational cultures early in a transaction to minimise friction and protect deal value?
Woeste: We use AI to translate publicly available sentiment data into our culture model, giving us an outside-in view of different organisational cultures very early in the deal. This allows us to identify potential friction points even before we have direct access. As a result, we can plan the right cultural alignment strategy upfront – one that supports the deal thesis and helps protect and deliver deal value. This is then followed by deeper cultural assessment, including leadership alignment through what we call ‘change breakthroughs’, as well as ongoing support for individual teams to align culturally as they are established through the organisational integration or separation.
“Organisations sometimes rely too heavily on financial incentives and overlook the human and emotional factors that genuinely motivate individuals.”
FW: Where do you see the most common failure points in post close integration and separation from a people and culture standpoint? Which interventions have the greatest impact on safeguarding and realising deal value?
Bishop: From a people in deals perspective, the most common post-close reasons for a deal to fail is leadership, culture and execution discipline. Value is often eroded when organisations underestimate the disruption created by separation or integration, resulting in unclear leadership accountability, loss of critical talent, cultural misalignment and delayed decision making during the first 90 to 180 days post-close. These issues are compounded when people considerations are not treated as priority change activities, nor embedded in the deal strategy and timelines. Interventions with the greatest impact are those that stabilise the organisation early: confirmation of leadership and operating models, focused protection of value-critical roles, clear and credible employee communication, and active role-modelling of the desired culture by leaders. Where organisations proactively align people strategy, culture and execution to deal milestones, they are significantly better positioned to safeguard value and accelerate post-deal performance.
FW: How are advances in workforce technology reshaping how organisations plan their workforce, assess skills and manage people-related risks in the future of M&A and separation?
Woeste: Technology is allowing us to do things that we could not do in the past, such as having an outside-in view very early in the deal of a target organisation’s workforce, their skills, their talent patterns and their culture – all using data and AI models to create this picture. This is incredibly valuable to a buyer to understand how a target compares with its direct competitors and whether said target has the right kind of talents, and if it is investing in the right kind of skills as its claims.
Chau Woeste leads KPMG’s people in M&A practice in the UK. She has over 25 years of experience from industry and consulting in London and New York, with a strong track record in advising senior clients on all aspects relating to human resources (HR) and people and change management on global, complex deals. She can be contacted on +44 (0)7867 673 946 or by email: chau.woeste@kpmg.co.uk.
Amy Bishop partners with clients on deal execution and strategy & performance transformation from a people and HR perspective. She leads project management offices for complex transactions, plans integrations and separations, and advises on joint venture people strategies. Her expertise includes pre-deal due diligence, organisational design, talent management, leadership assessment, retention strategies, labour relations and employee engagement programmes. She can be contacted on +44 (0)7884 734 374 or by email: amy.bishop@kpmg.co.uk.
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