The retention of key employees is one of the most critical steps in mergers and acquisitions. As soon as an employee hears about the transition, he/she begins to worry about what will happen with his/her job. Will the employee have a position with the new entity? What will the new policies and procedures be? If there is an available position, will it be different from the employee’s current job? Insecurity about the answers to these questions can lead the employee to look for employment elsewhere.
The following are a few tips on ways to retain your top performers during and after a merger or acquisition:
When selecting employees to retain, base your selection on merit. You do not want to simply rely on the employee’s title or rank, because you may be stuck with somebody who got their position based on relations with upper management rather than on performance. The employees you want to retain will have the skill, experience and record to prove they are worth retaining.
It is vital to build and maintain a high trust level with your employees. The best way to accomplish this is to communicate clearly. As the acquiring entity, you want the new employees to understand your philosophy, goals and vision for the “new” business.
If possible, offer retention contracts to employees that are key to the company’s success. This will send the message to the employee that you value their skill or experience enough to pay an additional bonus to keep them for a specified time.
An acquiring entity should train the new employees and ensure they feel prepared to succeed with the new business. Additionally, investing in an employee’s development sends the message that you care about their growth.
Find ways to motivate your employees to do their best work, such as bonuses based on performance and/or promotions. An incentive program can not only boost morale, but it can also increase productivity and profitability overall. Remember, however, every employee is an individual and what motivates one person may not work for another person. Thus, it is important to understand the individual needs of the key personnel you are attempting to retain.
We understand that mergers and acquisitions can seem overwhelming, but it is what the attorneys at Mailly Law do every day. If you believe a merger or acquisition is in the near future, contact us today to schedule your initial consultation. Our legal team is ready to help!