M&A, Death, and Taxes: The Talent Repercussions Nobody Talks About

M&A activity is a near certainty for many organisations. Yet while financial and legal implications dominate the conversation, the leadership and talent consequences are often underestimated.

If your organisation is large and successful enough to have a C-Suite, know that it will at some point, be acquired, merge with, or absorb another.

It’s not a long-shot possibility – it’s a near certainty, especially in fast-moving, high-profile markets like tech and financial services.

Ultimately, when a company gets to a size that warrants a C-Suite, Heads of Department, a Board, and more, it’s only a matter of time before they end up on someone’s shopping list – or perhaps they start building one of their own.

To adjust the quote popularised by Benjamin Franklin slightly:

“In this world, nothing can be said to be certain; except death, taxes, and merger and acquisition activity.”

But this article isn’t here to simply repeat the usual M&A redundancy odds or offer generalist HR platitudes. I’m here to give an unfiltered, no-holds-barred view of the effects on your leadership and your talent when the news of a merger or acquisition hits – what happens, what doesn’t happen, and what risks get easily overlooked.

Don’t Amplify the Silence

Let’s start from the top – literally. After all, M&A activity often only takes place within a tightly controlled group of senior stakeholders. While the exact people involved vary from one transaction to another, leaders outside of that exclusive group – which often excludes many “Chief Something Officers” – have surprisingly limited visibility until much later on in the process.

So where does this leave leaders up and down the chain of command who are expected to reassure their teams, but aren’t told enough about the situation to do so with full visibility and integrity? Because people feel if your title starts with “Chief” then you should know what’s going on. But many senior leaders often don’t.

Naturally, when M&A rumours start drifting around, staff look to their managers and leaders for certainty. What they often get from those leaders is deflection – not due to dishonesty, but due to leaders genuinely having incomplete information. That deflection is understandable, but perpetuating the perceived wall of secrecy can present consequences that go beyond nosediving morale and sky-high anxiety.

A relevant case-in-point: the considerable security implications. Anxious, poorly-informed employees in a period of organisational instability are a tangible insider threat risk.

Staff worried about whether they are going to be able to continue providing for their families might start being sloppy around data handling, just because of the mental bandwidth occupied by the worry. A moratorium on new sourcing decisions might increase the use of shadow IT – and potentially worse: shadow AI.

But not all risks are this well-meaning. Disgruntled employees can become a massive leak or whistleblowing risk – presenting massive consequences for share price, regulatory standing, and client confidence.

And let’s not forget that there are many reasons that a deal might be kept under wraps, not always related to deliberate subterfuge or exclusion. Sometimes the fine print around a deal impedes the flow of information – even internally.

The only viable response when you don’t have a lot of information to go on as a leader is to be as honest as you can as quickly as you can, specifying what details you do and don’t know about any changes. Maintain clear and open lines of communication with your teams to add more information as it becomes available. It’s just the fair thing to do.

Is this going to magically fix all risk and worry? No. But it will paint you as a leader who is trying to be as transparent and supportive as possible. That can be all some people need.

One Plus One Does Not Equal One

Naturally, when two organisations come together, there are typically two of every senior role. Two CTOs, two CEOs, two CISOs, and so on. In most situations, it’s assumed that one of each pair must go.

The widespread belief is that the “better” person (whatever that means to whoever matters at the time) is the one that stays. Yet our team has found that just because one party is more proficient, that doesn’t necessarily mean they wind up staying in-role.

It’s sometimes the case that the heavyweight change-maker who drove the organisation to the point of acquisition has done their job. Once change has been delivered, change agents simply aren’t needed for the business-as-usual that comes next. Their skillset just isn’t relevant to the organisation’s story anymore.

All in all, M&A activity is expensive, and seeking out financial savings is often the first order of business – even before the ink is dry and the dust has settled. Headcount is the most visible lever here, and senior leaders are naturally the most expensive. Keeping “duplicates” just doesn’t make financial sense.

Yet two individuals in the same role are rarely true duplicates. They have skills that weave within and without their role. And when those individuals are shed, the need for those capabilities doesn’t go away.

We sometimes see permanent leaders being made redundant following a merger or acquisition, only for the organisation to “re-hire” similar talent (not necessarily the same person) as contractors and consultants a few months later. The cost of that expertise becomes reclassified rather than carrying employment overhead.

We’ve also witnessed some where it’s occasionally the lower-salaried “duplicate” professional that stays on post-M&A. And rather unfairly, in jurisdictions with higher barriers to constructive dismissal claims, we’re aware of situations where changes to employment terms have been used to reduce headcount by the back door. Neither are major trends by any stretch, but they’ve certainly given us pause.

What does this mean for leaders though?

For the leader-as-employer: these are all factors worth knowing when you’re assessing talent during or after a deal. A person you’ve worked with for years might ultimately end up being displaced not because they underperformed, but just because the mathematics, the skills need, or the contending employee’s skillset worked out that way.

For the leader-as-employee: these factors are worth knowing so you can read the signals earlier. Your employer’s interests and your personal interests risk diverging the moment a deal is in motion. Take extra care if those two sets of interests have already been diverging for a while. This isn’t going to be the case for everyone, but it might help you to prepare yourself for changes in your particular situation.

A Question of Culture

Even if you do “survive” a merger or acquisition, that doesn’t necessarily result in perfect BAU continuity. Even if your title and team come out of the other end unscathed, the cultural ground under your feet is bound to shift.

This could mean operating inside someone else’s architecture – their processes, their third-party relationships, their consultancy partners, their ways of working and (not talked about enough) their culture – for better or worse.

For a C-suite leader who’s been used to a certain level of autonomy (or perhaps, conversely, one who has been used to doing certain things “on rails”) this is a significant shift. Your ways of working, processes, and decision-making cadence can be fundamentally altered, even if your responsibilities look similar on paper

For some, staying on means being shackled: less autonomy, more bureaucracy, more constraints. For others, (possibly those eyeing an offramp of some sorts) then reduced autonomy and a set of guardrails might be just what you need to play out your time.

In other circumstances, staying on can become a platform: affiliation with a more high-profile brand, more visibility, more resource availability. For others, this increased need for adaptability and novelty might be a challenge after heading up a function with processes and culture that has been carefully honed over time.

But whatever the situation, the cultural shift won’t be neutral – it will either shackle you or give you a bigger stage. The key is to be intentional about which of those you’re signing up for.

It’s also worth noting that employment terms don’t have to change dramatically to change meaningfully. Benefits packages, remote working arrangements, expenses policies – these are often the first things that get agreed in the shuffle.

Yet the subtler things can make just as much of a difference. Your direct reports might now have a dotted line association to someone you’ve never met. The tactic of “move fast and break stuff” now needs to be approved by three people first – who you suspect may be the same three people you now have to share your PA with.

So, honest question: if the culture, the autonomy, and the working conditions changed significantly – perhaps even beyond recognition – would you still want your role? That’s probably worth answering before the dust settles.

The Personal Calculus of Your Own Position

Some individuals at a senior level, if they’re totally honest, are quietly hoping to be made redundant. A meaningful severance package, accumulated over a long tenure, is a solid financial platform – whether that’s for seeking fresh employment, for exploring contracting, or even for a rest. There’s nothing wrong with that calculation, but very few people like to say it out loud.

Whether you stay or leave, the CV case for having been through M&A is stronger than most people realise. After all, you helped build an organisation to the point where it was worth acquiring – or to where it was able to buy another organisation. You operated through significant uncertainty and structural change. That’s provable executive maturity – and experience few senior leaders acquire, and it carries real weight with valuable future employers.

Discovering that you’re in the midst of M&A activity is a worrying time. I’m not here to sugarcoat that. But it can be a good opportunity to think about what your position is worth to you – financially, professionally, reputationally – independent of this deal.

Does the incoming organisation bring something that is in line with your personal brand as a professional? Or does something feel… off. Note: some soul searching may be required.

Consider it Long Before the Deal Is Done

To reiterate: if your employer is established enough to be of a certain size and reputation, then that organisation is going to end up in someone’s shopping basket sooner or later. Alternatively, your own employer might be the one doing the shopping around.

But it will happen to you. The leaders who navigate it well – both for themselves and for the people around them – are the ones who have thought long and hard about it well before the announcement is made.