8 Ways to Retain Employees After a Merger or Acquisition

By Esperanza Denise - Aug. 1, 2016
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Editor’s Note: This is a guest post by Esperanza Denise from Dissertation Heaven. Her opinions are her own.

One of the major challenges during any merger or acquisition is the retention of key employees.

Often, when companies go through a merger or acquisition, the employees feel insecure about the future of their employment. The ‘fusing’ of two companies often results in the implementation of new policies, procedures and business regulations. This is what makes employees feel insecure about their jobs as they are clueless about how things will turn out inside the ‘combined entity’.

As a result, many employees flee in search of greener pastures.

Here are 8 ways you can retain your top employees after a merger or acquisition:

1. Select employees on merit

While retaining employees after acquiring a company, it is important that you make your selection based on ‘merit’ and not on the ranks. When you take over an organization, you will quickly learn that there are employees who were promoted for their loyalty to a manager or team leader – not based at all on their performance.

Therefore, you should not mistake a star employee just by their number of promotions or awards. Instead, you should take a methodical approach and choose people who stand out from others on the grounds of skills, experience and talent.

2. Build your employees’ trust (the old and new)

Keeping things simple and communicating clearly makes an employee trust you more. As an acquirer, you need to share with your new employees everything from the philosophy and goals of your company to its policy and work strategy. All these things are essential for putting across the vision of your organization and how you intend to go about running the ‘new’ business moving forward.

3. Have 1:1 communication with all your team members

Effective communication plays a crucial role in gaining the confidence of everyone in the business (both the existing team members and the new employees) and keeping their loyalty with your organization.

Understand that every employee will feel some level of insecurity when a merger or acquisition occurs. Therefore, it is important to empathize with your employees and communicate with them, on personal level, to listen to any concerns they may have about their future employment prospects.

4. Offer an employee retention agreement

Where possible, offering an employee retention agreement is an effective way for employers to retain the newly acquired key talent and to benefit from the integration of their skills, competencies and experiences.

To make your offer even more lucrative, you can include valuable incentives, such as cash bonuses or other forms of financial assistance.

5. Train your new employees

When you take over an organization, you may find yourself with new employees who require a certain amount of training or development to get them up to speed inside the new entity. Investing in such employees will not only grow their skills but will also send them a message that your organization cares for the professional growth of all its employees – not just the old team.

Besides, a proper training and development program is a beneficial financial investment that results in better performance of employees and increased productivity.

6. Identify everybody’s strengths and weaknesses 

Performance analysis of all your employees is critical to their progress and your success in their retention. Remember that your employees are your biggest asset, and knowing their strengths and weaknesses could help you channel their experiences and skills for the benefit of your organization as well as allowing you to retain them longer in your organization.

7. Create an incentive program

Motivation is a fuel that encourages every employee to give their best in their work and this is where incentives produce the desired results. Setting a proper incentive or rewards program is essential to boost the morale of your new employees and make them feel part of your organization.

Offering performance-based bonuses and promotions are some of the ways you can make your best employees feel acknowledged for their service for your organization and motivate them to do better at their job as well.

8. Understand that every employee is different

When setting a retention policy for your employees, it is important to know that everyone is an individual in an organization. What works for one set of employees might not suit the others. Therefore, it is essential to understand the individual needs of your retained and new employees before settling for a strategy.

For example if, as a result of the merger or acquisition, you plan to relocate the office, then it is likely to offend a number of your existing employees. Similarly, if there is a revision in the compensation plan of any of your employees this may not go down too well either.

Esperanza Denise is a HR manager for a startup that is dedicated to providing help with dissertation. She’s also into sketching, painting, designing and blogging, and she spends most of her time finding something new to do.


Esperanza Denise

Esperanza Denise is a HR manager for a startup that is dedicated to providing help with dissertation. She’s also into sketching, painting, designing and blogging, and she spends most of her time finding something new to do.

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