How to Retain Your Employees after a Merger or Acquisition


No one person is more important than the whole. That’s the going wisdom. And while it may be true, a merger or acquisition can see your intellectual capital and top performers heading out the door. To prevent this from happening, there are several key strategies that you can employ.

Why Talent Leaves in the First Place
Talent may perceive a merger or acquisition as a threat to existing culture and organizational direction. They may feel insecure about their future and lose trust in leadership. All of these things can be compounded by poor communication from a senior team, or a perception that there will be a substantial increase in workload.

So what can you do to hold onto the difference makers in your organization?

Retention Incentives
Some companies believe that offering a retention incentive will be enough to hold on to staff during a merger or acquisition. According to McKinsey & Company, however, “many of the recipients would have stayed put anyway” without the incentive and that most “have concerns that money alone can’t address.” McKinsey recommends a more tailored approach, where the critical, key players who are most at risk of leaving are offered a “mix of financial and nonfinancial incentives tailored to their aspirations.” 

The result: When a European industrial company applied this approach they required only 25% of the budget that they had previously spent on a cash-based retention strategy. 

Don’t Just Focus on the Obvious
McKinsey & Company’s research showed that companies typically tend to focus on retaining senior leadership. By doing so they neglect to retain key employees whose skills, or even social networks, are critical to the smooth functioning of the business. “Even if the employees’ performance and career potential are unexceptional, their institutional knowledge, direct relationships, or technical expertise can make their retention critical.”

Credible Leadership
Rebuilding trust is critical to retaining staff after a merger or acquisition. When Deloitte took a closer look at the data from 2750 employee surveys from an international professional services organization, they found some interesting results about retention. These employees had experienced multiple organizational changes as a result of an acquisition. 

One of the defining characteristics that helped to rebuild trust with employees after a merger or acquisition was credible leadership. Employees wanted leaders who offered transparency about the process, and who spoke consistently about organizational support. Management, “should be visible and set expectations regarding corporate performance and employee roles.” The most effective managers were the ones who consistently communicated the benefits of the acquisition, spoke to their employees one-on-one, and made sure that the messaging was heard correctly.

Keep Professional Development Programs In Place
Organizations may discontinue professional development programs leading up to a merger or acquisition.  Unfortunately, this sends the wrong message. By keeping professional development in place, the organization continues to send the message that its people are valued and worth investing in.

Be Careful About Workload Increases
Managers need to carefully monitor workloads after a merger or acquisition. According to Deloitte:

  • It’s imperative that managers speak to each individual one-on-one about their new role, and offer them support in developing the skills needed to complete their new responsibilities successfully.
  • Managers need to ensure that employees are coping with the new workload. 
  • Managers must continue to communicate that the employee is valued by the organization.
  • Performance management is a critical part of this process. Managers, “need to be encouraged to view the performance management process as a priority, investing time and energy in mentoring and developmental feedback discussion.”

Resource: Read this article to learn how to give effective feedback.

Key Takeaways
There are several key things to consider when trying to retain your employees after a merger or acquisition:

  • Employees need credible leadership who communicates honestly and demonstrates that the organization values their staff
  • Retention incentives are costly and not necessarily as effective as a tailored approach
  • By keeping professional development programs in place you send the message that the organization will continue to invest in its employees and their growth
  • Managers play a critical role in retaining talent
  • Increased workloads need to be managed and monitored, and the performance review process invested in
  • An effort should be made to retain employees whose knowledge, relationships and technical expertise are of value to obtaining business objectives

Your Next Step
No one should walk the job search or hiring road alone. At Clarity Recruitment we help others realize their success through a process that marries proprietary technology with unwavering commitment. Contact us today to take control of your career, or to partner with us to hire well.

Clarity Recruitment, connecting exceptional people with remarkable companies.

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