Retention of key employees

This topic contains 37 replies, has 34 voices, and was last updated by  James Elding 1 week, 5 days ago.

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    Henrik Jernstrom

    Often, especially in smaller entrepreneurial companies, there is a risk that key employees leave when the company is acquired by a larger corporate and that this worsens the performance of the acquired company. What do you think can be done to diminish this risk of key employees leaving and the impact it might have on the performance?


    I think we should identify the key employees and discuss what our strategy and choose them as the key people and bargain with give some ESOP that make them as the owner of the company.



    David Castell

    Key employees should be addressed as early as possible about the intended/ongoing deal and the role they would take over after the acquisition would be finalised.

    The uncertainty about the future role of these key employees, how their new organisation would look like (specially considering the acquisition is done by a significant larger company compared to the target company), and missing information about the targets of the newly merged company might trigger the loss of key employees. This could lead i.e. into loosing pace on research & development projects and ongoing negotiations could slower down or even break-up.


    Vijay Dravid

    If the acquiring team can provide key leaders, with the following it will reduce attrition of key leaders

    Clarity on vision for the company
    Clarity on organization and role for the key leaders
    Predictiblity of outcomes


    Henrik Jernstrom

    Agree Vijay. And often it is about providing this in a more compelling way to show we are in this together and for the managers to show leadership. Not just the WHAT but also the HOW.


    Hannah Barber

    With key employees, transparency early on during the M&A process is key, especially with smaller organizations being acquired by much larger corporations, as it’s very possible that the start-up culture they are use to could change. I would recommend a stay bonus and incorporate their involvement in the post-integration as much as possible with key leaders. An ESOP plan as Indrama is a great incentive for employee retention. Transparency of the future state of the company and their vision of the future is key. Lastly, continued communication to make sure they do not feel as if they are being left out, which could cause uncertainty and worry, which leads to them leaving the company.



    I fully agree on all that has been said before. One addition, I would like to make is that when it becomes clear that retention of key people is not possible, a plan should be prepared to foresee in follow-up. This in order to ensure that the project remains successful.


    Belema Obuoforibo

    I think the most important thing is clarity. It’s mostly the uncertainty that drives key employees out the door. If some serious measure of clarity can be provided earlier in the process, then that would be good. However, this is not always possible.


    Matthias Arnet

    I agree, it is all about clarity and communication. Especially in the early stage and right from the beginning. However, this is the challenging part since many parameters are not clear/require time to define at the beginning.
    Nevertheless, the key employees need to be identified in the early stage including the opinion leaders, which are not always the same persons.
    What I see as a key factor as well is the “brand” integration process. The loyalty to the brand can be of utmost importance of employees from the acquired company, especially previous owners/founders. Having an open communciation, involvement in decisions and understanding can positively influnce the process of retaining key employees.



    As a part of the integration planning, retention plans need to be created so that once the key employees are identified, in my opinion, the following can be done:

    1. Immediately having a conversation with them about the need, their role during integration and beyond, the time period during which their specific help is needed
    2. Clarity around how they will operate with others to make these happen within that time frame – how the transition or knowledge transfer will be managed and tracked.
    3. Providing access to a knowledge management platform or repository to capture the work during this period
    4. Reward and recognition associated with their help
    5. Retention bonus plus any incentives on the accomplishment of the integration/transition goals and the form in which it will be paid and the terms and conditions associate with it
    6. Getting them to sign an agreement to that effect.


    Mohd Hafizuddin

    One of the best ways is to communicate the strategy clearly to the employees. Employees must be able to understand what a company wants to achieve and how it will be achieved. Another thing to consider is to provide adequate compensation that is linked to the strategy.



    Clear communication and strategic goals for the merged entity should be communicated. Inclusion by staff in both the target and acquirer firms is crucial to prevent uncertainty, leading to resignation of key staff.


    Leslie Tan

    Fully agree with the previous remarks. its vital to be transparent on situation and on communication to get the alignment for the employees to be on board.


    Mengxi Li

    The planning effort of retaining the key employees and the top leaders who are essential people assets of you are buying, especially when acquiring Professionally Services Firms, needs to be happen before the target companies are identified. Knowing what you are acquiring are critical, and knowing different type of companies require different approaches to retain key staff is also very important.


    William Yong

    Sometimes, the entrepreneurial spirit of those key employees being acquired just find it stifling to operate in a corporate structure of the acquiring company. Besides the ideas mentioned above, ability to identify a role that will harness such strengths will be useful too.

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