Tips to Retain Staff After a Takeover

These Tips for Retain Staff After a Takeover will help ease the transition for those affected
Photo by CC user foreignoffice on Flickr

It is well-known that one of the reasons mergers and acquisitions go sour is because key staff leave the company, taking with them institutional memory, expertise and possibly also customers. This can be a real challenge for new owners and their management team, especially if they were led to expect that those staff would stay on board. As M&A experts like John Binkley Dallas can tell you, there are no guarantees that key staff members will stay, but there are some strategies you can implement before, during, and after the transition that will help you to retain staff after a takeover.

Appreciate the complexity of situation

The first step towards retaining and integrating staff during a takeover is acknowledging that the situation can be difficult not only for staff in the taken-over company, but also for the staff already in place. For those taken-over, it may well be the case that the career track they imagined themselves to be on no longer exists and they need to make mental adjustments. Pay structures, benefits, accumulated vacations, stock options and a whole range of other expectations may also have to be adjusted as a result of a takeover. If the takeover was unwelcomed, there may also be lingering resentments or hostilities which make need some time to resolve. On the other side, the existing staff will now be expected to integrate new colleagues into their work patterns and hierarchies. There may be territorial attitudes to break down, and concerns to manage on that side as well. Any attempt to manage this transition must start with an appreciation of the complicated dynamics involved.

Be fair with staff who will not be transitioning by design

It may be the case that you have already made decisions as a part of the negotiation process about who will not be brought over into the new structure. This may be because particular functions will become redundant or because they are simply no longer relevant to the new business. In that case, be sure to treat those employees fairly and with respect – how you treat them will be a significant factor in your ability to retain the staff that you want to integrate. If people have a sense that their former colleagues (and perhaps friends) have been simply discarded, it may brew resentment and could contribute to a sense of employment insecurity.

Be aware that your competition is watching

Given the known challenges with transitioning a staff during a takeover, it is very likely that your competition will be watching how things unfold very carefully. They may take the opportunity to try to “poach” key personnel during this period. To some degree this can be mitigated by non-compete clauses, but not without creating ill-will.

Create incentives to stay

Consider implementing both short-term and long-term incentive programs to encourage retention. This will be especially important in the short-term when employees are still adjusting to their changed circumstances and potentially harboring fears about their jobs and futures. In the longer-term, employees who were on career tracks to management or increased ownership options need to be reassured that they still have that potential.

No solution will be completely successful, and you should expect to lose some employees after a takeover. However, by treating employees with respect and understanding, you can successfully build a new team committed to the success of the new enterprise.