M&A Employee Retention: How to Keep Staff Motivated During a Merger

Merger and acquisition (M&A) deals help companies come together to become a single, stronger business entity—and that includes benefitting from both firms’ talent. However, a merger or acquisition will only be truly successful if you’re able to retain your key talent. In fact, this is often a key part of the deal succeeding or failing.

Below, we’ll walk through some of the most important concepts in M&A employee retention, including the reasons it matters, the way leadership alignment impacts it, and how both employee empowerment and baseline support optimise retention during the M&A process.

Why Maintaining Employee Motivation During A Merger Is So Important

Before, during, and after a merger, one of the most important aspects of employee retention is employee morale. Given the massive changes coming to both the buyer and seller companies, staff may harbour fears or uncertainties that your senior leadership team will need to address and neutralise.

Here are five common concerns acquired workers may have before, during, and after a merger¹:

• Uneasiness about the potential of losing their job in the near or distant future
• Uncertainty about new senior leaders and managers and the expectations they have
• Fear of being moved to a different team or unit or reporting in a new structure
• Apprehension about an unfamiliar company culture and company values
• Fear of changes to or losses in pay or employee benefits, both direct and indirect

The less workers are told, the more valid these concerns are. The best way to address them and reassure employees that they are valued is to communicate transparently and often with them.

Aligning Leadership and Building an Employee-centred Communications Strategy

Per one 2021 survey, leadership alignment and influence were deemed the most important factors in overall M&A success.² Aligned leaders’ focus on employee engagement was one of the biggest differences between successful and unsuccessful deals. Leaders’ communication and employee retention efforts were correlated with success 65% and 56% of the time, respectively.

The way that leaders engage employees will vary depending on the structure of the deal and the companies involved in it. However, it always involves reaching out to acquired employees and opening up times and spaces for communication. Town halls are great ways to address entire workforces simultaneously, but more intimate settings like office hours help to personalise the message.

Ensure Retention by Enabling Career Growth

One of the most important elements of employee retention overall, whether or not a merger has happened, is providing opportunities for their development and career advancement.

According to a McKinsey study, a lack of career advancement opportunities was the #1 reason why people left jobs in 2021 – 2022, beating out factors like compensation and inspiration from leaders.³ And, per Pew Research, 63% of workers who left a job in 2021 did so because there were no opportunities for career advancement—a tie for the #1 reason with compensation.⁴

However, this potential gap is a major opportunity for success in post-merger integration.

An organisation can make strides toward retaining and engaging key talent who otherwise might harbour these fears by prioritising development. Setting the tone with internal workshops and external programs, like education and certificate opportunities, is a great way to improve employee satisfaction.

Maintaining Employee Well-Being and Support

In addition to supporting employees’ future ambitions, it’s also important to support them where they are day-to-day. Employees need to have their concerns heard; they need to be valued and made to feel valuable; and they need to be comfortable in their post-merger roles.

Five critical ways to centre new employees and ensure they’re supported are²:

• Communicating with employees clearly, transparently, early, and often
• Identifying, celebrating, and expanding values shared with employees
• Emphasising the importance of cultural exchange and mutual respect
• Leading by example and modelling the behaviours desired by staff
• Planning early and adjusting as needed throughout the integration

It’s especially important to extend these kinds of support to global and extended workforces during the M&A process, given differences in culture and logistical challenges like time zones. Working with a dedicated human resources (HR) service provider specialising in global talent retention is a best practice.