Many companies involved in mergers and acquisitions offer retention bonuses to key employees to ensure they stay put. But consultancy McKinsey & Company has learned many would have stayed without bonuses. A better approach? Customizing packages of financial and non-monetary incentives to each crucial staffer’s goals. A European firm using this strategy slashed its former cash-based retention budget by 75 percent.
It’s natural for key employees to feel fearful after a merger or acquisition. It’s also natural for them to consider taking their talents elsewhere. A study two years ago found just 45 percent of companies successfully retained employees through a transition. To help ensure your organization fares better, focus on the following strategies.
- Don’t rush the process. Taking time to understand the corporate culture, values and talent base of the other company helps in retaining key employees. Why are the other company’s employees happy with their job situations? What makes the company successful? These are keys to creating a retention strategy.
- Communicate clearly. Open lines of communication are critical to building trust among key employees in the conjoined team. Broadly conveying your company philosophy and goals represents one step, and meeting one on one to communicate on a personal level with important staff about their concerns is another.
- Identify cultural similarities, differences. Where do the two companies find common ground? Where are the important differences that must be bridged? Knowing the similarities and differences can help you avoid key staff defections.
- Invest in your employees. Career development initiatives reflective of the newly-constituted company’s goals impart a message to critical staff that the company cares about their professional growth and wants them to stay.
A cohesive, well-orchestrated blueprint for the transition, and full participation by the united HR team in making the transition work can help companies overcome talent defections following a merger or acquisition.
How has your company managed to keep employees during mergers and acquisitions?
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