How an updated organizational design process can add value to an acquisition

Deals are catalysts for transformation, because they provide access to capabilities and talent that would otherwise take more time and effort to unlock through organic growth. That means deals have the potential to effectively and efficiently create value for buyers. But a deal’s value can evaporate if buyers can’t retain the talent that made the deal so promising in the first place.

It’s easy to see why talent retention is so important. Customers want to know a business has the staff to deliver on its contracts and continue to prioritize quality. A lower retention rate can leave a yawning gap in institutional knowledge — decreasing efficiency and increasing the likelihood that contracts will go unfulfilled. In times of deal uncertainty, where customers are hyper-aware of any slippages, they may start to wonder if the business is changing — and not for the better. The quality and quantity of outputs can drop, leading to revenue declines that leave money on the table and destroy deal value.

What you need to know

Why this is important now

The “Great Resignation” spawned by fallout from the global pandemic has escalated the struggle for talent that many organizations were facing even before COVID-19. Companies have to fight even harder once a deal is publicly announced, as competitors may view it as an opportunity to poach personnel. M&A activity can breed uncertainty about an employee’s future with the new organization. If not properly addressed — such as through the recommendations below — that uncertainty can metastasize into mistrust, leading to a rush for the exits.

Keep in mind

Some departures happen in the normal course of business, and with underperformers, may even be desired. In a deal, companies should swiftly identify and reassure top performers and employees who possess in-demand skill sets. It’s also important to retain employees who are crucial to business continuity — such as the Chief Information Officer at a tech company — and achieving business goals — like the primary sales representative on the business unit’s biggest account.

How org design fits in

Organizational design (org design) is not a one-size-fits-all approach; its goals and principles vary based on the deal type. The traditional org design process follows a pillar approach. It includes key components such as business strategy, leader identification, operating model, layer-by-layer design, talent assessment and selection, and employee notification. We see an opportunity here to enhance the traditional process to drive greater value for the business. Developing a more robust process can increase the likelihood that crucial positions don’t sit empty and help reduce post-integration talent acquisition costs.


Companies should empower talent in the business they’re acquiring, creating a connection between employees and the new employer. This requires effective communication that answers a number of key questions. Employees want to understand their role and how it fits in with overall goals, what stretch opportunities they will have, and how they can upskill. Maybe most importantly, they want to know why, during a time of intense change, they should trust their new employer, especially when it comes to issues involving diversity, equity and inclusion.

Why your workforce matters – and what to do next

Acquirers’ value creation plans for their target companies typically rely on the stability, development and motivation of an acquisition’s workforce. But when human capital management doesn’t meet worker expectations, an M&A event can trigger value-destroying disengagement and attrition. That can be especially true for employees from racially/ethnically diverse communities.

Request input

Rather than taking a top-down approach, leaders should seek employee input to help them decide where talent can be redeployed. This approach can help employees feel more engaged and take ownership over their careers during a time of great change.

Leaders should also encourage employees to take advantage of available People Experience tools that provide employees with tailored opportunities to support well-being, development, purpose and personal ambitions.​

Provide flexibility

Leaders should provide workers with more flexibility in the workplace, including flexible job profiles that marry job characteristics and non-traditional work arrangements such as completely virtual roles, gig work and employee-led projects. As the Great Resignation has demonstrated, workers value flexibility and are willing to change employers to obtain it.

Open up dialogue

In order to be transparent about organizational changes, leaders should hold regular planning meetings to develop their message and determine how to convey it clearly during onboarding and offboarding. It is crucial that they take time to identify the right channels and to encourage open dialogue between management and workers. For instance, leaders can speak directly to their teams and receive immediate feedback through level up meetings, team discussion forums, and virtual fireside chats.

Share regular updates

Leaders need to use the identified channels and others to communicate the availability of personalized rewards packages, such as paid time off to volunteer or upskill, that go beyond traditional benefits.

Establish metrics

Finally, leaders will want to establish metrics for determining whether the message is being communicated effectively.

Start with the traditional org design checklist…

  • Review operating models and identify what is needed to confirm a smooth day one, prioritizing business continuity over optimization.­
  • Leverage industry benchmarks to evaluate costing, full time equivalents (FTEs) and service delivery options.
  • Contemplate how decisions about the day one org design can influence the organization’s future design and capabilities.
  • Develop a transparent communication strategy to incorporate employee preferences into the org design process.
  • Implement a mechanism for feedback and questions.

…And add in these refreshed measures.

  • Conduct regularly scheduled check-ins — including employee surveys, focus groups and one-to-one conversations with key talent — and use the feedback to balance workers’ needs with the goals of org design.
  • Consider collecting employee preferences — including, when appropriate, personally identifiable information (PII) — with tools and technologies like the following:
    • Listen: Surveys of employee preferences so leaders can tailor short- and long-term plans to provide differentiated and customized benefits. Measures in real time what employees value, expectations, and value gaps.
    • Crowdsourcing sessions: Enables an open discussion regarding various topics such as communications, collaboration, community, benefits, etc.
    • Saratoga: Segmentation capabilities to focus on key demographics or groups for retention.
  • Utilize upskilling tools to retain and develop top talent to confirm that capabilities needed for the future of the business are available. The tools should:
    • Identify client skill gaps and help close them with future skills forecasting, benchmarking and personalized learning paths that achieve organizational goals.
    • Build paths to success through personalized skill-building modules that provide opportunities to earn industry-recognized credentials.

How it works in practice: A client success story

PwC worked with a leading environmental management company for more than 10 months to design interim and post-close operating structures for a multi billion dollar transaction. The transaction also prompted a simultaneous, regulatory-related divestiture to an international third-party buyer. To enable a smooth transition, the client needed to determine and communicate which employees would be transferring and which would be divested. Broken reporting lines also had to be fixed while leadership and org structure needed to be clearly defined.

The company used PwC’s org and talent workstream tools to develop a reporting structure overview of about 30,000 employees (including about 1,000 workers who were to be part of the divestiture). The tools, including Workforce Architect, a PwC Product, allowed the company to review employee data, job levels, and descriptions during the redesign. PwC also held working sessions with integration and HR leaders from 16 functions to emphasize the importance of maintaining business continuity, ensuring key talent was retained, and reducing talent acquisition costs post-integration.

PwC’s tools improved collaboration and allowed the client to experiment with moving employees around to determine the most effective reporting structure during the transition period and post-integration. The tools also helped the client leverage multiple communication channels — not only email and webcasts — to guide all employees (even deskless) through the changes taking place. Additional channels were developed to maintain critical customer relationships.

The multichannel communications approach was flexible enough to be used after the deal closed, and the executive leadership team noted that, “strong cross-functional coordination enabled a seamless day one experience regardless of employee disposition.” The team was particularly impressed by how the approach helped establish employee trust through upfront, transparent information about the selection process and set expectations around timing which aided in retention.

Retaining key talent is an important part of M&A activity. A new approach to org design, like the one used by this environmental management company, can help an acquirer keep the workforce it needs to reach its strategic objectives.


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Maria Alberico

Partner, Deals, PwC US

Jennifer Farkas

Deals Partner, PwC US

David Baral

Managing Director, Deals, PwC US