Our Take
The 75% figure is real (per EY research), but EY's prescription—that HR lead cultural due diligence upfront—treats a symptom of bad deal strategy as a fixable process problem when the issue is usually executive indifference to retention economics from day one.
Why it matters
With 53% of CEOs planning acquisitions in the next 12 months (per EY's 2026 CEO Outlook), the talent drain will accelerate. Companies that ignore this pay in capability loss, knowledge transfer failure, and integration delay—compounding across multiple deals.
Do this week
HR leaders: Map your acquired company's key roles and retention risk by role type this week, then present a 90-day re-recruitment plan to your CEO before the next board meeting so deal timelines account for people, not just tech.
Three-quarters of key talent leaves after M&A closes
EY surveyed senior leaders and workforce members across hundreds of organizations and found that on average, 75% of employees in key roles quit within three years of deal closing. The research arrives as CEO acquisition appetite surges: 53% of CEOs (per EY's 2026 CEO Outlook survey of 1,200 CEOs) plan to pursue acquisitions in the next 12 months, and 79% plan joint ventures or strategic alliances in 2026, up from 62% in 2025.
The departure rate reflects a broader pattern. Almost half of transaction leaders report that deals often fail to deliver desired value, and only 46% of transactions achieve innovation KPIs (company-reported). EY's diagnosis: business and technology due diligence dominate deal preparation, while human and cultural fit get secondary treatment.
Cultural due diligence must happen before close, not after
EY's research identifies a critical timing gap. Transaction teams prioritize financial and technical fit during due diligence, creating downstream integration failures that become visible only in the post-close phase. By then, the damage to employee confidence is already done. One HR director at a global digital payments company quoted in the study put it plainly: "The moment you get into the whole post-transaction activities, it's too late."
The cost of ignoring this is measurable. When leaders establish six specific conditions for people to thrive (purposeful vision, adaptive leadership, psychological safety, disciplined freedom, and two others), the likelihood of deal success increases 2.6 times (per EY's broader transformation research). In transactions specifically, focusing on these conditions improves an organization's ability to execute future transformations by 2.2 times. That compounds: a company that nails the human side of one deal builds institutional muscle for the next.
The converse is sharper. Nearly all transactions hit a moment where the program goes off course and leaders must intervene. EY's finding: turning points are more likely to have negative overall impact on a transaction when leadership does not actively re-recruit the acquired workforce. Employees do not assume they belong in the new organization; they must be told, repeatedly, by people they trust.
HR must be a deal partner from day one
The implied action is to shift HR's seat at the table from post-deal integration to pre-deal due diligence. This means conducting what EY calls "cultural due diligence" before a deal closes: examining leadership style, decision-making, work culture, and employee engagement at the target company. The goal is not to predict cultural fit perfectly but to surface retention risks and integration friction early enough to alter deal structure, pricing, or timeline.
EY's research also shows that companies navigating deal turning points through a human-centered approach improve their ability to carry out future transformations by 2.2 times. One HR executive at a multinational company involved in a major deal summarized the dependency: "They have to walk the talk. And as long as management is aligned, it gets cascaded down." This means C-suite and board-level commitment to retention targets, not just HR program execution. Without it, cultural due diligence becomes a compliance checkbox rather than a driver of deal outcomes.