Retaining Talent During a Merger

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By Andrew Yue
July 2019

One of the most critical issues after a deal is
announced is retaining talent and keeping them
focused during the transition period. How many
times have you heard top management say that our
greatest assets are our people? Following a merger
announcement, everyone knows that there will be
job losses, the question everyone asks is, “will it be

Most organizations focus on the use of contingent
payments (retention bonuses) as the primary tool to
incent people to stay. However, this is not always
effective. Promises of money create short-term
incentives with no guarantee of performance or
staying once the final payments have been made.
We have seen time and again the exodus of
management once their “golden handcuffs” have
been removed. Even short-term retention payments
to lock in staff for a transition period does not
guarantee that they will stay.

For most people, securing a stable job with a steady
income is a better tradeoff than a temporary work
period with a balloon payment at the end. Your
people will continue to look and will jump ship as
soon as the next opportunity comes along.

Here are Three Ways to Retain Talent

1. Level the Playing Field

It is normally the case that the acquiring company
dictates the people who will come and go without
truly understanding the talent that they have
acquired. Have everyone reapply for their jobs, so
you can ease the “US vs. THEM” situation. This
creates the feeling that we are “all in the same boat”
and those who want it the most and are the most
qualified will rise to the surface. However, if this is
not managed correctly it can lead to widespread

First identify what roles are needed in the new
organization, this should be part of the Target
Operating Model Design. Second, who is the talent
pool that could serve in these roles and what skills
are required. Third, identify what motivates them,
i.e. their personal goals. Finally, put an action plan
together that matches people to the right roles with
the right skills and aligns to where they want to be.

2. Use Levers Other Than Money

While we go to work to earn a living it is not the
primary incentive of why we stay in a job. Doubling
pay does not double performance. If you recall
Maslow’s hierarchy of needs, once we have satisfied
our basics needs of personal and financial security we
seek belonging, self-esteem, and self-actualization.

We want to know we are working for the right cause,
we believe in what we do and we can make a
difference. Understanding people’s individual
motives and needs is key to retaining talent. People
stay because of the people they work with and not
because of loyalty to the company. Other non-monetary
levers to retain talent are: inclusion, mentoring,
job rotation to acquire new skills, geographic rotation
to broaden horizons, and formal career tracks.

3. Care for the Casualties

Caring for those who don’t have a position in the
new organization is paramount to those who
remain. You never know whether you could be
next. Not everyone is going to be a good fit and
sometimes through no fault of their own they are
being let go. This is hard for people who have had
a long tenure and have committed a significant
portion of their working life to the company.
These are friends and colleagues – people want to
see that they are being treated fairly and being
helped along the way. Not caring for the
casualties is damaging to morale for those who

The worst thing that can be done is outsource it
to a placement agency. Managers who personally
help their staff have the greatest talent retention
rates and will be followed whenever they move
on. Who will want to work for a company that
treats people as a commodity that can be easily
discarded without due respect? While top
management views layoffs as business, you can
be sure the individuals on the receiving end will
take it personally.

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