How can an acquiring company prevent the loss of key talent/key employees?


This topic contains 5 replies, has 6 voices, and was last updated by  Laura Manganotti Mills 3 weeks, 3 days ago.

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    What are useful ways to prevent the loss of key talent or key employees following an acquisition or merger?


    Anirvan Sen

    Interesting question Chris. I believe the definition and interpretation of the words key talent or key employees is required. This is where different people will give different opinion. Even though we want functional and operational leaders to make an unbiased and rational selection, in practice, this selection is almost always biased.

    In my opinion, here are the categories who should be considered as key talent and it should be mandatory to retain them
    – individuals who possess a key skill-set that is highly valuable for an organization specially if it is knowledge-based and part of IP of the company
    – Sales/BD people who generate most of the revenue for the organization (use pareto 80:20 principle)
    – individuals who possess deep institutional and contextual knowledge

    All other skills can be deemed as negotiable. Some practitioners may counter this and propose that high potential and/or high performers should be retiained. My cross argument is that high potentials and high performers are generally loyal and continue with their companies. In fact, a little assurance and motivation is good enough for them to continue. These are the people who can’t be easily woo-ed by other companies that easily. Of course, when I say this, I also would like to caution that if the leadership irks them and brush them the wrong way, they may walk out irrespective whether there is any retainer or not.



    One way to ensure there is no attrition of key talent is offering retention bonuses. This typically works well but may not be the long-term solution. There is some effort involved in identifying those who are key to the business or various functions. Part of the decision will depend on input from the Target Company while the rest ultimately resides with the functional leads on the Buyer side. Every function will define talent differently. As Anirvan states, it may be the employee who brings in the most revenue or knows the product extremely well. It may be the admin assistant who has been with the company for many years and can navigate all areas effectively.

    Offering an economic inducement is still not a guarantee as ultimately, the employee will beed to be happy with the new environment and culture to stay. Perhaps constant communication with key employees to gauge their level of satisfactions is one way to mitigate any flight risks.


    I always believe in a three step model:
    – Inform: knowing when you need to share information and how much information should be shared (it’s less scary than 10 years ago)
    – Invite: invite employees to give you feedback on how you handle the process
    – Involve: get employees involved in designing a part of the, f.e. integration process

    The combination of all these steps lead to a higher intrinsic motivation and has a great impact on citizenship from the employee to the organisation.
    In this example, to me, leadership is key.


    Craig Hasler

    Hi Christopher,

    Thanks for the prompt…I don’t think anybody has a “crystal ball” solution with regard to this challenge. Both Anirvan and Mona have shared great points above. I believe that those with advanced product/solution understanding and valuable industry relationships (sales/business development) are the most important individuals to retain following an acquisition. Mona’s suggestion of retention bonuses is a great place to start as most people are fueled by compensation. Additionally, employee recognition (among their peers) and involvement in future strategy planning can also be a great way to keep younger talent motivated and engaged.



    In addition to all comments above, I am under the impression that the protection periods for all the employees (during which the rewards T&C are not allowed to be less favourable than pre-merger) are becoming longer, above legal requirements where applicable.

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