While mergers and acquisitions (M&A) might sound like an attractive strategy to generate more profit to the related parties, the actual execution is far more complex and risky. One of the biggest challenges during M&A, is to ensure talent retention in sync with change and manage key performers. The question remains, how do you retain your intellectual workforce from jumping ship?
It is no secret that in general, most employees perceive M&A as a threat to their position within the organisation. For senior employees who have been dedicating their life for the company through years, M&A could be viewed in the light of betrayal from senior leadership towards their loyalty.
This not only makes them lose trust in the company, there are several other reasons behind employee’s’ negative attitude toward this strategy. These include ambiguity about the organisational direction, inability to adjust with the changing organisational culture, uncertainty about the job security, as well as suspicion towards new leadership credibility. Owing to these reasons, employees are often thinking of jumping ship, rather than getting tossed over by elusive circumstances.
Meanwhile, from the employers’ perspective, M&A serves various advantageous purposes for streamlining business operation. For example, through mergers of companies that work for the same sector, you can reduce manufacturing costs, boost sales market for the products, while eliminating major competitors altogether.
However, despite many great benefits you can gain from a prospective M&A, employee management and talent retention is one major concern for HR managers, before executing the plan.
As a part of the whole M&A process, you might need to conduct downsizing and lay off your employees. However, after M&A it is also equally important to ensure that you keep employee turnover low, by regaining trust from the retained workforce. Here are several steps, on how your organisation can survive through M&A:
See: Strategic Approach to Cost-Cutting: Learnings for HR to Execute Layoffs Better
Providing cash and incentives for retention bonus could be a great alternative to prevent employee attrition during M&A. However, allocating retention budgets alone is not enough to assure your employees stay. Unless you work towards improving other areas to rebuild their trusts, money will only serve as temporary inducement for their stability.
Throughout the M&A process, your employees might feel uncertain and anxious about their future career in the organisation. Therefore, employers should leverage personal outreach to ensure that the workers feel valued, respected, and supported by the organisation. HR leaders should talk with them directly and discuss about the upcoming business strategy.
In order to cut costs, M&A plan might not only lead to downsizing, but also halt training and development programs. While you need to be carefully arranging the company’s financial plan, cutting the budget for professional development is not a great option. Not only directly linked to job performance, training is a great way to value and improve your employee’s skills.
Sometimes, doubt and suspicion towards M&A is caused by lack of communication and understanding among employees. To avoid such cases, the company should establish a clear communication strategy to make sure that the right message reaches out to all employees.
One of disastrous consequences post M&A is that, the retained employees often need to take additional workloads from their former coworkers. To avoid burnout and more employee turnover, you need to initiate a discussion with employees regarding their job responsibilities and provide necessary assistance in managing their workload through careful planning.
Engaged employees are the lifeblood of a successful company, and you cannot achieve this with cynicism and negative sentiments among the workforce. As business continuity is the key for efficacious implementation of M&A, you have to be able to keep your top performers on board.
Before executing M&A, business leaders should think thoroughly on how the deal will affect higher managerial positions, and impact overall employee performance.
Read also: How Should Managers Deliver Bad News of Layoffs to the Workforce?