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My old company (Petro-Canada) was acquired by Suncor back in 2008. One of the things I noticed is that the top performers at the company no longer remained after the acquisition. Do you think in typical M&A, should the company retain the best talent, or should they make way for the new?
Aside from strategic reasons for letting people go during an integration, in a general sense I think that if the employees are given a sense of security and an assurance that the intention of the company is to retain them then most employees would probably opt to stay. It often makes things more difficult for the company to bounce back when top talent exits the company. Bringing in many new hires often means a need to account for a learning curve while they learn their new roles and become familiar with the new organization.
I think it truly depends on what business you’re in and why you’re acquiring the business. There’s also the question of possible synergies since you may not need redundant roles and what was allotted during the analysis phase. For my industry, which is more service-focused, it’s very important we keep the team intact post-merger.
in my personal opinion, retaining existing valuable talents should be a priority. As long as the “valuable” criteria is well agreed, and justified transparently
I agree – retaining talent is key from a knowledge perspective and have found with the right people/mindset they become a valuable resource during post merger integration
Retaining critical talent and ensuring the right people are in key roles are important to a successful merger. Key candidates should be identified for key positions in the combined company, this is usually a part of the retention plan.
I believe that retaining the key talent is important to the success of the acquisition. If handled correctly, they not only add value via their knowledge, but they also can be great change advocates to help their peers accept the integration and view it in a positive way.
a my experience, companies can go backwards very quickly, if they don’t retain key employees of an acquired company.
Manaers should prepare for this potential eventuality, by updating a private list of employees categorised by group. The first group should be the true high-performers, the last group those already on a PIP (Performance Improvement Plan) or someone who is halfing discussed to them calmly, to distract from their faults. .
Retaining right set of talent after careful evaluation of Culture and Org structure of both the organizations is a critical to ensure success of the transaction. I strongly feel, timely communications on positive notes and making them feel important for future growth of the organization while explaining the required organization change and role rationalization to ensure unified execution will be really helpful to win their confidence.
I think I agree with most of the comments here: keeping top talent should be a top priority. There is slip and some people do get left behind. I would just work to identify the top people required to keep things going, and make sure there are non-compete’s or LTI involved at time of acquisition so the investors are not left holding the bag on a company which has just lost its braintrust.
I have seen a similar case where the top talents are gone. You can say its part of synergy, the top talents of the acquirer basically expanded their scope. There was no need for thick layer of leadership.
Agree with retaining staff after M&A because retaining critical talent and ensuring the right people are in key roles are essential to a successful merger.
Companies definitely should try to retain the best talents. And they do it by providing incentives. But it is not easy to do as the best talents have a lot of opportunities in their careers.
We’ve had several senior leaders that came to us through acquisition. They are great opportunity to identify and acquire new talent and new ideas and perspectives.
Philosophically, yes, management should always try to retain top talent from the acquired company. Practically speaking, I think it largely depends on the scope and nature of the transaction. In some instances top talent from the acquired company may become “obsolete” (i.e. duplicate resources from each company that are equally qualified, certain functional areas/business lines may be eliminated, etc.). I also wonder what role biases may play in retention decisions (e.g. acquiring company keeps their CFO even though the acquired company’s CFO is better qualified for the position within the merged company).
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