In mergers and acquisitions, the numbers usually take centre stage.
Revenue, profit. EBITDA, multiples, synergies, deal structure, Heads of Terms, completion dates. And of course, all of those things matter.
But behind every transaction is something that can quietly increase or reduce the value of the deal: people. Employees who are uncertain about what the future holds, managers trying to keep teams motivated while confidential conversations are happening in the background, leaders making critical decisions under pressure,cultures that may look compatible on paper but feel very different in practice. Employment contracts, policies, benefits, working practices and historic people issues that may not surface until due diligence begins. For buyers and selers, this is often where deals become more complicated than expected.
At The Affable Partnership, we have supported the people side of M&A transactions with a combined deal value now exceeding £750 million. That figure has taken some reflection and some number crunching, to fully appreciate. It is not the reason we do the work, but it does reinforce something we see time and time again: Successful M&A is not just about getting the deal done. It is about making sure the business remains strong after the deal completes.
The hidden value of getting the people side right.
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When people matters are handled well, they can protect value, strengthen confidence and support a smoother transaction.
When they are overlooked, they can create unexpected risk. That risk may come in many forms: key employees leaving, unresolved grievances or disputes, poorly drafted contracts, incorrect employment status, unclear TUPE obligations, inconsistent pay and benefits, weak documentation, cultural resistance, or consultation processes that have not been properly planned.
Individually, these issues may look manageable. Collectively, they can affect deal value, slow progress, create liabilities or weaken the future performance of the business. When people matters are handled well, they can protect value, strengthen confidence and support a smoother transaction. When they are overlooked, they can create unexpected risk.
That risk may come in many forms: key employees leaving, unresolved grievances or disputes, poorly drafted contracts, incorrect employment status, unclear TUPE obligations, inconsistent pay and benefits, weak documentation, cultural resistance, or consultation processes that have not been properly planned. Individually, these issues may look manageable. Colectively, they can affect deal value, slow progress, create liabilities or weaken the future performance of the business.
Due diligence is not just about documents.
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During a transaction, people due diligence often starts with a document request.
Contracts of employment, staff lists, policies, handbooks, benefits information, disciplinary and grievance records, absence data, restrictive covenants. Consultancy agreements, TUPE information, redundancy history, settlement agreements.
These documents are important, but the real value comes from knowing what they mean in practice.
Are the contracts fit for purpose?
Are the right protections in place?
Are there informal arrangements that have never been written down?
Are there people in the business who are critical to future performance?
Are there unresolved employee relations issues?
Are there terms that could create risk on transfer?
Are there cultural issues that could make integration difficult?
Are managers equipped to lead people through uncertainty?
The paperwork tells part of the story, the people context tells the rest.
That is where experience matters.
TUPE: one of the most common areas of risk
TUPE can be one of the most misunderstood areas in a sale or acquisition.
Whether a buyer is acquiring shares, assets, part of a business or bringing services in house, there may be employment obligations that need to be carefully considered. Getting this wrong can lead to claims, consultation issues, employee uncertainty and unexpected cost.
Handled properly, TUPE planning can protect both parties. It can clarify who transfers, what terms apply, what consultation is required and what risks need to be addressed before completion. Handled poorly, it can create confusion at exactly the point where clarity is most needed. The people side of a deal often needs to move quickly, but speed should not come at the expense of proper planning.
Retention: protecting the people who protect the value
In many businesses, a significant part of the value sits in the knowledge, relationships and experience of the people.
A buyer may be acquiring a customer base, a brand, a revenue stream or a set of assets, but often the ongoing success of the business depends on retaining key individuals.
This might include senior leaders, operational managers, salespeople, technical specialists, client relationship holders or long-serving employees who understand how the business realy works.
If those people leave during or shortly after the transaction, value can be lost quickly. That is why staff retention should be considered early. Not as an afterthought once the deal is complete, but as part of the transaction planning.
Questions to consider include:
Who is critical to continuity?
Who holds key client relationships?
Who has specialist knowledge that is difficult to replace?
Who may feel unsettled by the transaction?
What communication will help retain trust?
Are incentives, retention arrangements or revised roles needed?
Who will lead the team through the transition?
Retention is not just about money. It is also about clarity, communication, confidence and leadership.
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Consultation and communication: the difference between uncertainty and trust
One of the most delicate parts of any transaction is communication.
Employees may know very little about what is happening, but they will often sense change before they are told about it.
Silence can quickly lead to speculation, speculation can lead to anxiety. Anxiety can lead to disengagement or resignations. The timing and content of communication must be carefully managed, particularly where confidentiality is important. However, once communication is required, it should be clear, consistent and legally compliant. Good communication helps employees understand what is changing, what is not changing, what it means for them and where they can raise questions.
Poor communication can damage trust, even where the deal itself is positive. Consultation should never be treated as a tick-box exercise. It is an important legal and human process that can have a direct impact on how successfully the business moves through the change.
Culture: where deals can succeed or struggle after completion
Culture is often discussed in M&A, but it is not always examined deeply enough before the deal completes.
Two businesses may appear aligned strategically but operate very differently day to day. Decision-making, communication style, leadership expectations, pace of work, flexibility, reward, accountability and management behaviours can all vary significantly.
If these differences are ignored, integration can become difficult.
Employees may feel confused about expectations. Managers may struggle to align processes. The buyer may underestimate the level of support needed to bring teams together. The seller may assume that because the commercial deal makes sense, the people transition wil take care of itself.
It rarely does.
Cultural integration needs thought, structure and leadership. It also needs empathy. People are not simply moving from one organisational chart to another. They are moving through uncertainty, change and sometimes a loss of identity.
Parklands Capital: a practical example of people strategy supporting growth
One example of this in practice is the work we did with Parklands Capital.
As the business grew through acquisition, people considerations became increasingly important. Each acquisition brought not only commercial opportunity, but also employment obligations, team integration, leadership decisions and cultural considerations.
The work was not simply about reviewing documents. It was about helping the business understand what people risks existed, what needed to be addressed, how to support continuity and how to build a stronger structure for future growth.
Over time, that strategic people support helped the business move towards a more mature and self-sufficient HR model, including the appointment of in-house HR leadership as the organisation continued to scale.
That is often the sign of successful fractional or external people support. The goal is not to create dependency. The goal is to help the business grow to the point where it has the confidence, structure and internal capability to support itself.
“We first started working with Laura from The Affable Partnership when we completed our very first acquisition at Parklands Capital. At the time, we quickly realised that buying a business is only part of the process, managing the people side of the transition is where the real complexity lies. Laura supported us through the entire people element of the acquisition, helping us navigate communication with employees, structure and the practical HR challenges that come with bringing two organisations together. Laura's approach was calm, pragmatic and commercially focused, which made a significant difference during what could have been a very uncertain period. Since then, we’ve continued to work together and The Affable Partnership have become a trusted partner to our business. We are now in the process of acquiring our fifth company, and having consistent HR support across multiple acquisitions has been invaluable. It has allowed us to approach each deal with far more confidence, knowing the integration plan and employee considerations are being handled properly. I would highly recommend them to any business owner or investor involved in acquisitions. The people aspect of a deal is often underestimated, but it can determine whether an acquisition succeeds or struggles and having the right HR expertise in place makes all the difference”
Tony Rudden
Parklands Capital
For sellers: prepare the people side before a buyer asks
If you are thinking about selling, the best time to prepare your people documentation and HR position is before due diligence begins.
Waiting until a buyer asks for information can create unnecessary pressure. It can also expose gaps that could have been resolved earlier.
A seller should be able to clearly answer:
Are employment contracts up to date?
Are policies current and compliant?
Are employee records accurate?
Are there any unresolved disputes or grievances?
Are pay, benefits and bonuses clearly documented?
Are restrictive covenants appropriate and enforceable?
Are key people likely to remain after completion?
Are managers prepared for the process?
Are there any historic arrangements that could create risk?
Being prepared can help protect value, reduce delays and give buyers confidence.
For buyers: look beyond the headline employee list
If you are buying a business, the employee list is only the starting point.
You need to understand not only who is employed, but how the people side of the business actually operates.
This includes identifying employment liabilities, assessing leadership capability, understanding cultural fit, reviewing terms and conditions, considering TUPE obligations and planning communication and integration.
The question is not simply, “Are there any HR issues?”
The better question is: “What people risks could affect the value, performance or integration of this business after completion?”
That question often reveals far more.
The commercial case for people due diligence
People due diligence can save money, it can identify liabilities before they crystalise, it can support negotiation, it can protect staff retention, it can reduce the risk of claims, it can strengthen integration planning, it can help buyers avoid surprises and help sellers present a stronger business.
But perhaps most importantly, it helps ensure that the deal does not just complete, it succeeds.
Because completion is not the finish line.
The real test of an acquisition comes afterwards, when the teams need to work together, customers still need to be served, leaders need to make decisions and the business needs to deliver the value that was promised.
A practical people checklist for M&A
Before your next transaction, consider the following:
1. Employment documentation Are contracts, policies, handbooks and staff records complete, current and consistent?
2. TUPE and consultation
Have you identified whether TUPE applies, who may transfer and what consultation obligations exist?
3. Key employee retention
Do you know which employees are critical to business continuity and future value?
4. Employee relations risk
Are there grievances, disciplinaries, sickness absence issues, disputes or potential claims that need to be understood?
5. Pay, benefits and working practices
Are all pay arrangements, bonuses, benefits, overtime, commission and informal agreements clearly documented?
6. Leadership capability
Are managers equipped to lead their teams through the transaction and integration period?
7. Communication planning
Do you have a clear plan for what wil be communicated, when, by whom and how?
8. Cultural alignment
Have you considered how the businesses actualy operate day to day, not just how they look on paper?
9. Integration planning What needs to happen in the first 30, 60 and 90 days after completion to protect momentum?
10. Value protection What people issues could reduce value, delay the deal or affect future performance?
Final thought - M&A will always involve numbers, negotiation and commercial judgement. But the deals that work best are usually the ones where the people side is taken seriously from the start. When people risk is managed with clarity, empathy and experience, it can protect value, support smoother transitions and help the business move forward with confidence.
The deal may be signed on paper, but its success is delivered by people. The Affable Partnership supports buyers, sellers and leadership teams with the people side of mergers, acquisitions and business change, helping organisations identify risk, protect value and manage transitions with confidence.
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