Why Talent Is The Primary Success Lever in M&A Deal Making
September 2, 2025 – Dealmakers say people matter. But when it comes to execution, most still overlook human capital where it counts.
That is the main finding from The Say Versus Do Divide in M&A, a 2025 report from Mercer and the Transaction Advisors Institute. The study, based on insights from corporate development and HR leaders involved in more than 1,200 transactions annually, explores the disconnect between how companies value talent in theory, and how little it shows up in actual deal design.
According to the report, “most corporate acquirers say both that human capital is critical to delivering value with M&A and that it’s a value creation driver (91 percent), yet fewer than half (46 percent) consider human capital attributes when targeting assets or developing deal theses.”
Despite the rhetoric, only 10 percent of companies include people considerations in their initial targeting criteria, and just 30 percent incorporate them into the deal thesis itself. The result is a persistent say-do divide that continues to erode synergy realization post-close.
Human Capital Integration
While onboarding practices have improved over the past decade, Mercer finds that attention is still disproportionately focused on Day 1. “Focus on HR activities is up from five to 10 years ago and the initial integration periods are smoother than before because of focused attention on Day 1 readiness,” the report noted.
But that progress has not translated into better long-term outcomes. A shift is underway: 73 percent of acquirers now say they build human capital integration plans that extend well beyond the first 100 days, and 81 percent have assigned named owners to oversee longer-term synergy milestones.
Mercer concludes that “priorities have shifted from the initial integration period to delivering the deal thesis over the appropriate timeframe.”
Related: M&A Outlook Points to Accelerating Deal Flow
“Too many firms treat onboarding as the finish line instead of the starting gate,” said Evan Berta, an associate at Hunt Scanlon Ventures. “What drives long-term deal value isn’t a clean payroll transition, but whether the leadership team is empowered to execute the growth plan.”
Hunt Scanlon Reports ‘M&A Whiplash’ As Policy Uncertainty Sets In
In EY-Parthenon’s latest Deal Barometer, the message is clear: expect a more subdued M&A environment this year. After a strong rebound in 2024, the market is losing steam as macro headwinds begin to bite. Deal volumes for transactions over $100 million are forecast to rise just one percent in 2025, following a 19 percent gain last year. According to EY, “corporate M&A volumes are projected to remain flat in 2025 – totaling 1,142 deals,” while private equity activity is expected to notch only a “modest one percent increase, totaling 407 transactions.”
For executive search and human capital firms, this marks a growing opportunity to play a deeper, more strategic role. Instead of focusing solely on closing leadership gaps during onboarding, search partners can now support the broader alignment of structure, incentives, and culture to the underlying deal strategy.
Tactical Overload Blocks Strategic Execution
One of the report’s most pointed insights is that M&A teams remain too consumed by short-term tactical tasks. “The vast majority of the hours spent during the period from diligence through to close is used on essential but tactical components…not the activities that lead to decreased risk of not delivering the deal thesis,” the report said.
While 98 percent of acquirers review human capital assumptions before signing, most reviews focus on contracts, compensation mapping, and system integration, not leadership capability, succession planning, or team cohesion.
Mercer flags this imbalance as a critical execution risk: poor Day 1 experiences, like payroll errors or misaligned titles, can derail performance and distract from long-term integration goals.
“It might be time we stop confusing tactical hygiene with strategic alignment,” Mr. Berta said. “Great integration isn’t about doing everything; it is about doing the right things to unlock talent.”
This creates an opening for human capital advisors to add real value. By supporting pre-close strategy with leadership assessments, culture compatibility analysis, and long-term incentive design, talent firms can help clients shift from tactical firefighting to synergy enablement.
Related: Forces Shaping the 2025 Dealmaking Boom
Most acquirers know they need to do better. More than 90 percent of those surveyed say they’ve taken steps to improve their human capital approach in M&A, and 77 percent now include HR-related lessons in post-mortems. Mercer’s report finds that “acquirers are not satisfied with how human capital has been managed in the past and want to do better.”
Making Talent Central to the Deal
Companies are experimenting with new tools and techniques, from assigning mentor teams to acquired employees to building culture assessment models. But even as best practices evolve, one area still lags behind: AI. Mercer writes that “very few acquirers regularly use AI in their human capital-related M&A processes,” and two-thirds have yet to explore its potential.
That leaves room for talent firms with AI-enhanced search, onboarding, and engagement solutions to differentiate. As clients grow more sophisticated in their deal planning, they’ll expect human capital partners to bring more than just candidates; they’ll want insight, speed, and alignment with the broader value thesis.
Mercer’s and the Transaction Advisors Institute’ findings are clear: talent is still the under-leveraged variable in M&A. Deals fail not because the logic is flawed, but because execution falls short, and people are too often an afterthought.
But as integration timelines stretch, synergy horizons lengthen, and leadership needs grow more complex, the firms that treat talent as central to the deal, not as an afterthought, will be the ones delivering real results.
Reprinted with permission from ExitUp!
Contributed by Scott A. Scanlon, Co-CEO, Evan Berta, associate – Hunt Scanlon Ventures
