Retaining key employees
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I understand during a merger, employees can be uncertain about job security. I wonder what has worked for others on how best new management can ensure the key employees are retained?
Retaining key employees is part of M & A planning and should be inducted and tied up with Finance, Tax, and HR functions.
Assuming some of the newco ownership / leadership is staying, it is important to get them engaged in the process of retaining their employees. They can tell the story of why they sold and why it is good for the employees that have been acquired. They are a familiar face. If nothing else they can be the eyes and ears reporting back to the acquiring company management. working together with this group is essential
Having effective communication is crucial to retain the key employees to make them understand their roles and how their contributions is important to the organization.
Every acquisition we take on, we always take on every employee at the target company. Given then would like to become an employee of ours, if they decide they would like to pursue other options we help them out with that, pay for training for their new career desires, etc. Always want to see people succeed even if it means them leaving the company. They don’t ask to get bough and work for us so we try and make it right if they don’t see us as a good fit for them.
Retaining critical talent and ensuring the right people are in key roles are important to a successful merger. Talent retention plan needs to be prepared,implemented and monitored. Critical employees receive retention packages. Additionally, key candidates are identified for key positions in the combined company.
My experience shows, that communication to the staff at an early stage, being transparent all the time, keeps them in the loop, will take of uncertainties and key employees will remain in companies. In larger cooperations 1:1 meetings with key staff can underline the importance of their role and motivate them to stay.
I’m in a curious situation right now where there is no define plan after process and system integration for ressources. Part of my role is to check with them their aspiration, streng and which role in the new organization ressources could take. How do you keep ressources motivated, even thought there is still some uncertainty ? I would be curious to see if we even need to propose something, even thought we know it might chance down the integration role and what we discover ?
I think it is important to excite the new employees with roles or clear career roadmaps. The job of the company is to communicate what the company can offer to the employees. This is what the company can do – What happens thereafter depends on employee and is beyond the control of the company.
What is important but sometime understated is authentic communication – And not smoke. Employees are on “heightened sensitivity” mode during an acquisition process and will be able to sense smoke or empty promises.
Clear communication as well as meaningful incentives that are real and immediate always help to retain key employees. Displaying value and involving them in the process so they have a say is also helpful.
Incentive programs were negotiated during pre-acquisition. These programs included a mandatory retention period, revenue targets and related benefits a pre-defined milestones. It has worked well.
Perhaps key employees of the target company could be placed in leadership or senior management to send a signal that the acquirer is serious about retaining them.
Be transparent – Share with the key employees are is the to be ops model and what are their roles.
Communication – Effective, constant, and engaging communication is necessary to ensure you understand their concerns and anxiety.
Retention package – It needs to be tailored to serve your purpose.Having lived through 2 plus years of executing a merger, I see a wide scale burnout trying to meet the merger deadlines eventually leading to many critical resources jumping to newer better pastures. Why should the retention strategy apply only to high performing critical resources? Some if not most of these “high perfuming critical” resources will leave during or after the merger for various reasons. Retention strategy in my opinion should apply to 2-3 layers beyond at different permutations to ensure there is no continuity gap.
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