A global carveout closes. The paperwork is done. The buyer inherits employees scattered across multiple countries.
Then reality hits: those employees have no clear employer. They’re not on the seller’s payroll anymore. The buyer can’t pay them yet. They’ve fallen into employment limbo.
These are the “orphaned employees” of global M&A. They may be small in number relative to the overall workforce – but they carry outsized risk.
Andrew Lindquist, Partner at GoGlobal and Head of M&A Services, recently appeared on a MergerWare podcast episode to discuss workforce transition challenges. He highlighted a stark reality: while deal teams focus on valuations and synergies, the people who drive business value often get sidelined until they become a deal-breaking crisis.
When small headcounts cause big problems
Many deal teams delay action on small markets. A few employees in a remote location seem manageable. They aren’t.
These small teams often include critical players — senior engineers, key account managers, specialized technicians. Losing them can cripple local operations.
Compliance adds complexity. Employment laws, tax rules and benefits requirements vary widely. In many cases, that knowledge doesn’t transfer in the deal.
They say time is money and that’s very true whenever an M&A deal is on the table. Setting up a legal entity can take six months or more. Deals run on weeks. According to Andrew, this mismatch creates not just urgency — but also risk.
The two fastest solutions: EOR and NRP
When timelines are tight, GoGlobal applies two proven methods to secure employees and maintain compliance across borders:
| Employer of Record (EOR): Speed without the compliance burden | Non-Resident Payroll (NRP): Direct employment without a legal entity |
| How it works: The EOR employs workers on your behalf and becomes the legal employer, managing payroll, benefits, taxes, and contracts in full compliance with local laws. | How it works: NRP lets you directly employ workers in-country without creating a full legal entity. Your company is registered for payroll purposes only. |
| Role split: You manage day-to-day work. The EOR handles all legal, HR and compliance responsibilities. | Role split: You manage both daily work and the employment relationship. Payroll compliance is handled under your registration. Local expert support is highly recommended. |
| Availability: Works in most countries worldwide. | Availability: Common in Europe, Canada and Australia. Typically for non-revenue-generating activities. |
Key advantages:
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Key advantages:
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| Best for: Speed-critical situations and deals with tight timelines. Can be short-term or long-term. | Best for: Companies wanting more control than EOR provides, without committing to a permanent legal presence. |
Limitations:
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Limitations:
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Matching the method to the deal
Every transaction has its own priorities, Andrew notes. Your workforce strategy should reflect them.
When speed and reassurance are critical, EOR is often the best fit. It delivers a seamless handover and ensures employees are paid on time. You get local support from day one. The message to staff is clear: you’re valued and your future here is secure.
When the priority is greater control and deeper integration, NRP can be the better choice. This model is particularly useful in markets where employees are reluctant to work for a third-party employer. Direct employment gives you greater control of HR processes as well.
Both models can be tailored to mirror existing employment terms, helping to preserve culture and continuity while meeting the deal’s operational demands.
Setting up a local entity: the long-term commitment
In many global M&A deals, EOR and NRP act as a temporary bridge. They keep employees engaged, paid and compliant while the buyer works through the longer process of establishing a legal entity.
Setting up a local entity is the most involved and costly option. It requires significant upfront investment and more time to complete. In return, it gives you full operational control and the ability to fully integrate into the local market.
Legal entities are necessary when:
- You need a permanent legal presence in the country
- You plan to engage in revenue-generating activities
- You expect significant workforce growth
- You need to contract directly with local customers or partners
While the setup timeline varies by country, it can take several months. For M&A deals, this makes EOR or NRP a potential interim solution to adhere to deal timelines related to transition of employees.
Why the employee experience matters
In M&A, the numbers may seal the deal — but people determine its value. Lose the right talent and you lose more than headcount, according to Andrew.
Customer relationships fray. Technical expertise walks out the door. Hard-won market knowledge disappears.
For orphaned employees caught between old and new ownership, uncertainty becomes the default. They wonder: Will I still have a job? Will my pay and benefits change? What does my future look like here?
Left unanswered, these questions can quickly turn into resignation letters. Addressed early, they can become a foundation for trust. That trust keeps teams engaged and preserves critical know-how. It protects the deal’s long-term value.
Workforce stability in an M&A isn’t a side issue for HR to manage, according to Andrew. It’s a business continuity imperative.
The cost of waiting too long
In working with clients, Andrew stresses one point from the first conversation: start workforce planning during due diligence, not after the deal closes.
Every week counts. Delays create “fire drill” conditions. By the time leaders notice the gap, deadlines are too tight for the best solutions. This can impact the employee experience and ultimately hamper retention of the talent critical to making the deal successful.
Small markets should get the same attention as major hubs. They’re often growth markets where losing staff means losing momentum.
A real-world example
In a recent carveout, GoGlobal helped a manufacturing buyer manage employees across several small-headcount countries.
The timeline was tight. Compliance requirements varied in every location.
GoGlobal deployed a mix of EOR and NRP solutions across multiple countries, selecting the approach that best fit each acquired workforce’s circumstances. In some markets, EOR provided the fastest route to secure employment continuity. In others, NRP offered the control and familiarity those employees preferred.
With either method, payroll never stopped and benefits carried over. The result: zero talent loss during the transition, no compliance breaches and full operational continuity from Day 1.
Strategic takeaways for deal teams
Drawing from Andrew’s extensive experience navigating complex global M&A transactions, certain truths stand out time and again:
- Start Early: Talent integration isn’t an afterthought. It needs your attention from day one, ideally during due diligence. Understanding your workforce early helps prevent surprises and smooths the path for transition.
- Don’t Overlook Small Markets: Sometimes the most critical or high-value employees aren’t in the biggest countries. Ignoring these teams can risk losing key expertise that’s vital to the deal’s success.
- Choose the Right Tool for the Job: EOR and EOR each serve distinct purposes. Selecting the approach that matches the local workforce’s needs and the deal’s priorities can make or break employee retention.
- Retention is Everything: Clear, timely communication about pay, benefits and job security builds trust. When employees feel valued and informed, they’re more likely to stay, driving the deal’s long-term value.
In M&A, people aren’t just assets on paper — they’re the heartbeat of your business. Treat their transition with the care it deserves.
Don’t do it alone: local expertise, global reach
Carveouts are complex puzzles. They’re not just financial transactions, but intricate human and operational transformations. The acquired workforce holds the keys to customer relationships, institutional knowledge and ongoing value. Guiding them through transition isn’t one-size-fits-all. It demands a partner who blends centralized technology and global reach with deep local expertise.
Success in a carveout depends on many moving parts — from legal and financial structuring to operational handover and workforce stability. A globally connected yet locally grounded approach is one way to help bring all these pieces together. The final stages of a carveout often require in-market expertise: professionals who know the language, understand the culture, navigate regulations, and move quickly with proven systems in place.
By combining the efficiency and visibility of centralized coordination with the precision of on-the-ground insight, this model supports and complements the work of other advisors — helping deal teams execute their plans smoothly and preserve long-term value.
Ready to discuss how EOR and NRP solutions can support your next M&A transaction? Connect with our M&A specialists to explore tailored strategies for your specific deal requirements.
