Workforce Continuity as the Real Value Driver in M&A Deals

Every global deal talks about value creation, but few address the real pivot: how do you secure and activate the teams behind the assets, especially when politics, economics, and supply chains are all in flux?

Traditional mergers and acquisitions (M&A) playbooks were built for a world where assets sat still and entities led the way.

But today, as workforce migrations accelerate and geopolitical pressures reshape global markets, competitive advantage belongs to those who can transition talent — immediately, compliantly, and without borders.

This is why ‘no entity’ hiring, once an inside trick among deal lawyers and HR, is now a practical mechanism at the heart of effective cross-border M&A. With Global Employer of Record (EOR) solutions, dealmakers are closing gaps, reducing risk, and making workforce continuity a lever for value, often in environments where change is the only constant.

The Old Playbook: Entity-Led Workforce Transitions

For decades, the standard model for managing employees in cross-border mergers and acquisitions was straightforward, on paper, at least. The acquiring company would:

• Set up or repurpose local legal entities in each relevant jurisdiction.
• Transfer or rehire employees onto new contracts, aligning with local law.
• Build or duplicate payroll, HR, and compliance infrastructure from scratch.

But in reality, this approach is slow, expensive, and often a poor fit for the pace and risk profile of modern deals.

Common challenges include:

• Delays and complications in establishing new entities, which can vary significantly between countries.
• Key talent can end up in operational limbo, facing uncertainty around pay, benefits, or job security.
• HR, legal, and consulting costs escalate, especially in regulated or high-complexity markets.

As more businesses operate across borders, mergers and acquisitions often move at a faster pace. The old approach, waiting to set up a new company in every country before moving staff, simply isn’t practical when deals need to close quickly or when talent must be kept engaged and working without interruption.

Companies need a way to move and retain employees fast, without waiting months for legal entities to be ready.

‘No entity’ hiring, delivered through Global Employer of Record (EOR) arrangements, meets this need by enabling:

• Rapid onboarding: Employees can be engaged in a compliant manner, often within weeks rather than months.
• Business continuity: Teams remain operational and protected under local employment law, without payroll or benefits interruptions.
• Risk reduction: Global EOR providers navigate local compliance, mitigate misclassification risks, and provide clear lines of employer responsibility during transitions.
• Deal flexibility: Both buyers and sellers can proceed without waiting for every legal detail, supporting clean exits, carve-outs, and integrations across borders.
• Capital efficiency: Companies avoid the cost of establishing and maintaining local legal entities, especially in countries where statutory capital requirements and ongoing compliance costs are significant.

What started as a workaround for unusual cases is now being adopted as a practical way to keep business moving and protect deal value in international transactions.

Practical Scenarios for Global EOR in International M&A

Cross-Border Acquisitions

When a company acquires another in a new country, the buyer often cannot hire or retain staff directly right away. Global EOR providers make it possible to onboard employees quickly and compliantly, even in markets where setting up an entity or obtaining a licence would otherwise cause major delays.

This is especially important when you need key employees or operational staff in place from the start to deliver on post-deal value.

Global EOR can also be used as a compliant bridge during the entity setup period, keeping payroll and benefits uninterrupted.

In some cases, it removes the need for multiple new entities, helping the acquirer consolidate employment and HR processes across locations. This supports a unified people strategy and makes it easier to scale or restructure after the deal closes.

With one in four employees globally considering a job change (PwC, 2023), maintaining employment continuity during M&A is critical. A stable, uninterrupted transition, supported by a Global EOR, can reduce the risk of losing key talent at a vulnerable moment.

Carve-Outs and Spin-Offs

Carve-outs and spin-offs present complex workforce challenges, especially in international transactions. When a business unit is separated or sold, it is rare for legacy HR systems and employment contracts to transfer smoothly to the new owner.

Any gap in employment risks the loss of talent, operational disruption, or even legal exposure. EY’s 2024 Mobility Reimagined Survey found only 25% have a fully developed mobility function, while 71% face rising risks around tax, regulation, and data privacy.

With Global EOR, the transition is seamless. The EOR becomes the legal employer, ensuring staff stay engaged, paid, and protected under local law. Employees receive statutory benefits and continuity, while the new owner sets up their long-term HR model.

This helps preserve knowledge, avoid costly payroll gaps, and reduces the chance of losing valuable employees during the transition.

Clean Exits for Sellers

In asset sales or divestments, sellers often need a fast and compliant way to transfer employment responsibility. Maintaining local entities or supporting former employees after a sale can create unnecessary cost, risk, and administrative complexity.

Global EOR allows sellers to transfer staff to a trusted provider quickly, ensuring employees keep their protections and benefits while the seller is relieved of ongoing HR and payroll obligations. This streamlines exits across multiple countries and supports a clean break, letting sellers focus on their core business with minimal legacy risk.

EY’s 2024 Mobility Reimagined Survey identifies “co-sourcing or outsourcing selected mobility processes for greater efficiency” as a key success factor for international workforce mobility.

For sellers exiting multiple countries, partnering with a Global EOR provider directly supports this best practice, enabling clean, compliant handovers and reducing ongoing risk.

Regulatory or Licensing Delays

In many industries, such as pharma, energy, or financial services, new owners need licences or regulatory approvals before they can operate in a market.

Global EOR offers an interim solution, keeping teams legally employed and compliant until those approvals or new entities are in place. This prevents costly downtime, protects business continuity, and maintains compliance with local employment laws.

Regulatory or Licensing Delays

Regulatory and licensing requirements can stall acquisitions for months, especially in sectors where government approvals or local registrations are mandatory before operating. During these periods, acquired teams may be left without legal employment status, putting both workforce retention and compliance at risk.

Standard solutions, such as delayed onboarding or temporary contracts, often fail to meet statutory obligations or guarantee benefits.

Using a Global EOR is one way to keep teams legally employed, paid, and protected while buyers wait for permits or registrations. This approach minimises workforce disruption, avoids gaps in benefits or tax compliance, and gives both buyers and staff a stable footing until direct employment is possible.

In these situations, operational continuity, compliance, and workforce retention all depend on finding a lawful solution for employing staff during the regulatory waiting period.

Why “Just Payroll” Is Not Enough

In many jurisdictions, including the UK and EU, employment transfers during M&A are governed by regulations such as TUPE (Transfer of Undertakings, Protection of Employment) and its equivalents.

These frameworks are designed to protect employees’ rights when a business changes hands, but they impose strict requirements for recognising employment continuity, transferring accrued rights, and maintaining statutory benefits.

Relying on payroll-only solutions or informal arrangements can leave employees and employers exposed. Without proper local contracts and formal transfer mechanisms, staff may lose key protections or accrue legal claims. Authorities may challenge the legitimacy of the transfer, leading to disputes, liabilities, or even blocking integration.

Operators who treat M&A transitions as a mere payroll issue risk missing these critical obligations. Recognising the full legal and HR implications, beyond salary processing, is essential for a clean, compliant transfer and for retaining the value of the workforce acquired.

The Role of Due Diligence in Workforce Transitions

These legal and operational risks highlight why workforce due diligence must go deeper than headcount and payroll figures. Identifying the actual employment arrangements, accrued rights, local regulatory requirements, and collective agreements is essential before any transition.

A key area often overlooked is the assignment and ownership of intellectual property (IP) rights. In many jurisdictions, IP created by employees may not automatically transfer to the acquiring entity unless local employment contracts are properly structured.

Informal arrangements, contractor status, or payroll-only solutions can leave gaps, creating uncertainty over who legally owns critical IP, code, inventions, or trade secrets.

Effective due diligence uncovers hidden liabilities, such as unresolved claims, statutory benefit shortfalls, or non-compliant contracts, that could undermine deal value or delay integration.

It also identifies where IP rights may not be clearly assigned, exposing buyers to the risk of losing control over key assets. For IP-driven businesses, unclear ownership or contested rights can have a direct, negative impact on valuation, and may even become a deal-breaker.

Diligence in workforce transitions is no longer a check-box exercise. It is a strategic priority, shaping not only the operational success of the deal, but the ability to secure and exploit the core assets that underpin its value.

Conclusion: Workforce Strategy in a Fragmenting World

The M&A landscape is being redrawn by forces far bigger than any single deal. Geopolitical tensions are reshaping global supply chains and driving companies to rethink where and how they deploy their teams. As businesses shift operations from one region to another, the ability to move and retain critical talent has become a core requirement, not an afterthought.

Major workforce migrations, regulatory divergence, and economic shocks now test the limits of traditional, entity-heavy approaches to workforce integration. In this environment, the winners will be those who can transition people across borders with speed, precision, and minimal capital outlay.

Lightweight, investment-efficient workforce models — solutions that can bridge employment without long-term commitments or heavy infrastructure, are set to become essential tools for modern M&A.

For dealmakers, HR leaders, and operators, the challenge is clear: adapt your global workforce strategy to a world that rewards agility and readiness for change, because economic and political realities are unlikely to get simpler any time soon.