Cultural integration and talent loss are business leaders’ top M&A concerns

A recent survey investigated senior business leaders’ concerns about people-related M&A issues. It shows that these issues are perceived as ever more important while uncertainty about some aspects persists. Fortunately, Diversity Management can help addressing the challenges related to the most widespread concerns.

In a merger or acquisition process, Business leaders are most worried about cultural integration and top talent loss. This is one core result or a current survey carried out by Mercer. This finding seems to be, at least to some degree, related to another survey outcome: There is a lot of uncertainty about assessing and leveraging the company culture with regard to a successful post-M&A-integration. In Europe, 44% of surveyed business leaders were not sure about the existence of a process for assessing company culture and hence leveraging results as part of an M&A procress. No less than 35% said there was no such process in place. Only 22% of European leaders reported such processes compared e.g. to 52% in Latin America.

It might be due to the insight on challenges related to M&A’s that the participating managers were also worried about top talent loss in the 12 months following an M&A transaction. 75% indicated that they were “very” or “moderately” concerned about good talent leaving (40% being moderately concerned and alarming 35% being very concerned). “Such turnover is often related to power struggles and close to no attention on the compatibility of corporate cultures”, Diversity expert Michael Stuber explains.

Overall, the rising attention to people-related issues in M&A situations among business leaders is a very positive result of the survey. This trend is particularly strong in Asia, where 84% agreed that people-related issues have become more important, followed by Latin America with 62% and North America with 60%. Europe ranks lowest with only 47% of surveyed managers noticing a rise in relevance of people topics. Despite this there is hope for the specific topics of company culture and talent retention: In Europe, 47% of business leaders agreed that cultural issues are receiving insufficient attention in M&A processes; the finding is at the same level as in North America (46%).
Diversity Management can help addressing the above-mentioned challenges in M&A processes on different levels and in different areas: D&I enables employees and managers to deal with differences effectively – as they occur in M&A situations. And D&I promotes open-mindedness – which is key to tap into synergies in M&A processes. Also, D&I increases competences in working with colleagues who are different – another feature of M&A processes. Last but certainly not least, D&I is a key driver for employee loyalty and can hence anticipate M&A-related talent loss issues.