Key Employee Retention
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Retaining key employees from a target can be critical for an acquisition’s success. What are some good diligence questions to gauge the capability and value of seller-recommended key employees provided either via the diligence tracker or during a diligence meeting/call with HR?
Interview key employees in a casual manner. Ask them what they like about the company, what they’d like to see changed, what resources they’d like to have access to. Ask them about their goals and where they see themselves in 5 years. Take a very candid, honest approach.
When looking at key employees, I’d ask simple but telling questions: What do they actually own day‑to‑day? How have they added value in tough moments? And what would make them stay or leave after the deal? Those answers usually reveal both capability and retention risk.
For mapping key employees, invest time with the management team and triangulate their insights with objective evidence. Use performance reviews, promotion history, sales data, salary progression, external reputation/industry profile, and any succession‑planning documentation to identify people who are critical to value. Remember that “key” looks different by role: the technical authority who underpins delivery quality, the client‑connected salesperson who protects revenue, and the long‑tenured manager who can make the integration succeed. Scan all levels of the organisation—not just outward facing roles to avoid missing hidden influencers and operational linchpins.
Employee retention is a big concern in tech companies and consulting firms that offer tech consulting and implementation services. I have seen a few cases where a company tries hard to retain its employees only for it to be a target for acquisition by a bigger firm. Tech companies’ employees are as concerned about leadership culture as much as the technologies they work with, but it is quite challenging for target company’s employees to understand the acquiring company’s leadership culture from the outside looking in….
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