[Frederik Maeng]

I think it is dependent on the industry and employee values how to approach it. Younger organisations will likely be more focused about career path and development opportunities, rather than short term monetary gain – which makes talent management important

[Olena Kosobutska]

People are the key asset to realize the value of the acquired business, thus talent retention should be on top of the agenda. Of course, monetary reward is the base to keep people satisfied / rather that offering bonus it should be something more long-term, e.g. increase to fixed remuneration, additional benefits. It is also very important to identify so called “key employees” who contributing the most to the success of the business and have deep dive discussions with them about their expectations, incl. monetary, career progression.

[Dan]

Having a retention package in place also works sometimes

[David C]

Talent retention during periods of organizational change can definitely seem like an ‘uphill battle’! However, there are several effective approaches you can take:

1. You could offer monetary ‘retention bonuses’ for folks who stay throughout a specified timeframe of the integration (e.g., 6 months) – regardless of whether or not their role will be made redundant.
2. You could launch career development options/courses to help ‘upskill’ staff to prepare for post-integration demands.
3. For any staff who are made to be redundant, you could consider offering ‘early exit packages’ for them.

[Steve]

I agree with many of the responses on talent retention and the deployed incentives. Careful attention to the target company’s culture and what the “small things” within that culture are is important to show interest in and develop ways to reserve that culture. It’s difficult not to disrupt a target company’s culture, but genuinely showing respect for the employees and their ways of working should influence your integration plans.

[Steve]

I don’t directly manage the “people strategy”/”talent retention”, but as a member of out integration management office, I’ve seen when this has been executed well. Here are some of the best practices:

1. Having early of frequent senior leadership (CEO and CSO) “sponsorship” of the key talent you need to retain
2. Accommodating the bonus and salary bands of the target company
3. Retaining the target company real estate and working conditions (whether working remotely or hybrid)
4. Measuring and acting upon culture assessments of the target company to sustain as much of the current culture as possible
5. Providing clear career paths for target company employees

[Melissa Lehman]

I think it will vary from acquisition to acquisition. Some areas, I have seen are milestone payouts, retention bonuses, stock incentive plans, paid time off, and sometimes even job titles make a difference on employees staying or leaving.

[Onzelo]

Retaining key talent post-acquisition is critical as these individuals often hold essential institutional knowledge, drive core business processes, and can greatly facilitate a smooth transition. Effective retention strategies are a mix of monetary incentives and other supportive measures that together help ensure that important employees feel valued and motivated to remain with the organization. Here’s a look at various approaches, including details on monetary instruments and additional measures.

Monetary Instruments for Talent Retention
1. Retention Bonuses

Design: These are typically offered as a financial incentive to stay with the company until a certain milestone or date post-acquisition. The bonus amount can be a fixed sum or a percentage of the employee’s annual salary.
Duration: Commonly set for critical junctures in the integration process, such as 6 months, 1 year, or 2 years post-acquisition. The payment is usually made at the end of the specified period if the employee is still with the company.
2. Stock Options and Equity Awards

Design: Granting stock options or equity stakes in the company to key employees aligns their interests with the success of the organization as a whole. This can be particularly attractive in startups or companies planning to go public.
Duration: These are often subject to vesting periods that encourage long-term retention, typically ranging from 3 to 5 years.
3. Earn-Outs

Design: This is a structured deal where additional compensation is tied to performance targets or business milestones post-acquisition.
Duration: Earn-outs can vary but often last between 1 to 3 years, depending on the expected integration timeline and business goals.
Non-Monetary Measures to Retain Key Talent
1. Career Development Opportunities

Offering clear career paths and professional growth opportunities helps retain talent who may be uncertain about their future in the new organization structure.
2. Leadership Roles in Integration

Involving key talent in the integration process and decision-making roles not only leverages their expertise but also enhances their commitment to the new entity.
3. Cultural Integration

Focusing on harmonizing differing corporate cultures and fostering a positive work environment are essential for keeping talent content and engaged.
4. Communication and Transparency

Regular and open communication about integration progress, changes, and how they impact individual roles and the company at large can help alleviate uncertainties and build trust.
5. Work-Life Balance Initiatives

Enhancements such as flexible working hours, remote work options, and wellness programs can contribute significantly to employee satisfaction and retention.
6. Recognition Programs

Recognizing and rewarding contributions effectively can boost morale and loyalty. This can be through formal award systems or regular positive feedback.
Example of Effective Retention Strategy
An example can be seen in tech acquisitions, where companies like Google and Facebook have successfully retained acquired talent by offering significant equity stakes coupled with exciting growth projects that align with the employees’ expertise and interests. Furthermore, these companies integrate the new teams by respecting their unique subcultures and blending them with the broader organizational culture, which helps maintain a sense of identity while fostering belongingness.

Conclusion
Ultimately, the best approaches are tailored to the specific needs and expectations of the key talent and the strategic goals of the new organization. Combining both monetary and non-monetary strategies effectively can help ensure that critical talent not only stays through the transition period but is also committed to the long-term success of the integrated company.

[Dana Hoernke]

Here are several approaches that have proven effective in acquisitions I’ve been a part of:
Retention Bonuses
Stock Options/Equity Grants
Performance-Based Incentives
Improved Benefits Packages (healthcare, retirement plans, and other benefits that exceed what they were receiving)
Work-Life Balance (introducing flexible working arrangements, such as remote work options and flexible hours, to accommodate employees’ needs)

[Hedwig Duronic]

You need to be aware of the talent you like to keep. Accompany them through the transaction process. Give them good interim jobs if the future position is not clear yet

[Yumi.K]

I think that providing a clear and realistic career path with specific milestones that show the corresponding position and compensation for their role and duties to keep the employees engaged and loyal to the company after the integration. Also, providing improved work conditions that suit their preferred work styles and/or benefits such as 401K, enhanced health insurance coverage that employees lacked before the integration.

[RaQia Randall-Bouchard]

Immediate retention strategies can include stay bonuses and inclusion in the PMI process, including input into the structure of the organization they will lead or work in. Additional strategies can include securing work location arrangement preferences (virtual, hybrid, relocation, etc.) and incenting the right behaviors through leadership development and compensation practices. Longer term strategies can include stay interviews to determine retention drivers.

[Christian Dueñas]

IMO and previous experience, Key talent was part of the workstreams to combine operations and create this new Co. The involvement on the areas of expertise they manage makes them important and part of the process, especially for those that never were part of this kind of process (in our case we were always the company acquired, but this was the first time playing the role of the acquirer).

In my case, I involved key talent in value capture workstreams, to evaluate and analyze the potential synergy levers, pros and cons, value (both tangible and intangible) after executing the synergies. They also played an important role tracking the synergies to make sure we were really capturing the promised value without mixing it with other business-as-usual activities.

[Author]

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