
May 2025
2 minutes
HR Due Diligence: A Critical Step in Mergers and Acquisitions

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Introduction
When it comes to mergers and acquisitions (M&A), financial and legal assessments tend to take centre stage. But overlooking HR due diligence is one of the fastest ways to invite risk, disrupt culture, and compromise the success of the deal.
Your people are your most valuable asset – and also your greatest variable.
At ThinkGlobal HR, we’ve seen firsthand how early, thorough HR due diligence not only identifies red flags, but unlocks value. It provides a roadmap for smoother integration, improved retention, and aligned strategy. If you’re not engaging HR from day one, you’re already behind.
Quick Tips
Involve HR leaders during the pre-deal stage, not after the fact
Assess employment contracts, benefits, and liabilities country by country
Map workforce structures, talent risks, and compliance gaps
Align compensation and equity schemes early to prevent retention issues
Document culture, leadership behaviours, and organisational design
Why HR Due Diligence Matters Early
Many businesses make the mistake of treating HR due diligence as an administrative task post-signature. But workforce issues are often the very factors that derail integrations. According to Globalization Partners’ M&A checklist, ignoring employment law compliance, benefits parity, and cultural alignment can result in fines, flight risks, or reputational damage.
By involving HR early, you:
Understand total workforce costs (including bonuses, pensions, and accrued leave)
Evaluate legal compliance with local labour laws
Identify collective bargaining agreements or trade union considerations
Assess risks around classification, immigration, or contract misalignment
One client we supported was expanding through acquisition into three new markets. HR due diligence revealed significant risk tied to misclassified contractors in two of them. We supported a shift to compliant models before integration, avoiding regulatory action and protecting brand trust.
Culture and Talent Mapping – Not Just Numbers
HR due diligence is about more than headcount and payroll. It’s about understanding how people work, what drives them, and where friction may arise post-merger. Rizing identifies this as one of the four key HR roles across M&A phases: surfacing insights that shape integration.
Key areas to assess include:
Leadership alignment and management style
Performance and productivity norms
Retention vulnerabilities among top performers
Internal mobility, succession plans, and DEI benchmarks
In one case, cultural assessments flagged that one company’s “high-performance” bonus structure clashed with the acquired team’s collaborative norms. We worked with leaders to design a harmonised reward framework that maintained motivation without creating resentment.
The Hidden Liabilities You Can’t Afford to Miss
HR is also where unseen liabilities often reside. These may include:
Non-compliant employment agreements or undocumented benefits
Discrimination or harassment claims under investigation
Uneven global HRIS or payroll systems leading to inconsistent records
If missed, these can stall integrations or lead to costly legal consequences. That’s why we recommend using a structured HR due diligence checklist and working with global HR specialists who understand local regulations.
ThinkGlobal HR regularly partners with legal counsel and finance leads to provide a 360-degree view of people-related risks – from equity plan audits to statutory benefits mapping across jurisdictions.
Final Thoughts
HR due diligence isn’t just a checklist. It’s a strategic pillar of any successful M&A. When done thoroughly and early, it lays the foundation for smooth transitions, high-performing teams, and a truly unified organisation.
What’s next for your global people strategy?
Let ThinkGlobal HR support your next M&A journey. Book a pre-deal or integration readiness audit with our expert team. We’ll help you identify risks, unlock talent opportunities, and build the people infrastructure your merger needs to succeed.