Even in the best of circumstances, organizations can struggle with employee retention. And when an acquisition or other corporate transaction creates new uncertainties and anxiety, the retention challenge intensifies. Of most concern to acquirers are the highly skilled and experienced people who are essential to a smooth integration.
Though the importance of retaining the right talent in a deal is certain, the most effective ways to do that are far from clear. Experience has shown the value of particular tactics, but very few deal makers — from serial acquirers to one-time buyers — can point to a winning approach.
A recent Towers Watson study clarifies the picture. The results of Towers Watson’s Global 2012 M&A Retention Survey show deal makers' most effective retention tactics.
Among the organizations most successful at retaining key talent during deals, three practices are standard operating procedures:
- Identify retention candidates early. This means at or before due diligence, when feasible.
- Combine monetary incentives with relationship-building activities. These acquirers typically provide incentives via retention bonuses. They also boost targeted employees’ commitment to the deal by assigning them to integration task forces and having leaders reach out to them personally.
- Establish principles to guide deal-related decisions — and adhere to those principles. This discipline ensures that all actions align with the deal's overall objectives and the success factors that characterize effective integration. While most of these acquirers aren’t rigid about processes, they do make decisions within a framework and keep deviations to a minimum.
The survey results show that effective retention is a blend of art and science, with perhaps more emphasis on the art. The art lies in the particular way an employer combines tactics to appeal simultaneously to targeted employees' financial, emotional and career needs.
Nearly 180 deal makers worldwide participated in the 2012 M&A Retention Survey.