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A merger is one of the most important decisions that a company makes throughout its lifetime. But while executives and business owners see an excellent business opportunity that will help them make more revenue, that is not what the employees are seeing. Mergers and acquisitions can make employees more anxious, leading to a decrease in morale or motivation.

Poorly managed M&As almost always result in good and reliable employees losing their jobs, which is bad for other employees as well as the business. So it goes without saying that merging companies will have to pay a lot of attention to retaining their employees. And here are a few ways that you can do that both during and after an M&A.

Retaining Employees During and After M&A Deals

1) Choose Your Employees Early On

Let’s face it; you will not be able to keep every employee during the merger. With budget constraints always a major concern during a merger, you may have to let some employees go. So instead of making impulsive decisions after the merger, you should start selecting which employees you would want to retain. So if the merger does not go well and you will have to let some employees go, you will know which ones.

Choosing your employees early one is also great for the employees themselves, as it saves them from a lot of the anxiety and stress that comes with an M&A. Keeping track of your employees can also help you come up with better arrangements for them if they are leaving.

2) Be Honest and Straightforward  

Speaking of letting go of employees, during the merger, companies often decide on whether or not employees will have to be fired as a result of the merger. This means that you may know long before the merger finalizes who you may have to let go. So instead of beating around the bush, be honest with them about the situation.

Oftentimes, by staying honest with your employees, you gain more of their trust, and sometimes they can leave the company on good terms. And this, of course, applies to both the new and old employees. Staying honest and connected with your employees can also help sustain their morale and can alleviate some of the stress about the situation. But even if you were being honest could lead to more confusion and stress, it’s best to bite the bullet and be honest about the situation.

Being transparent to your employees can save the company from a bad rep when the news eventually breaks. And being transparent can also make the employees more understanding about the situation that they are in.

Retain Your Employees

3) Offer a Retention Agreement

M&As can be quite taxing on your employees, both physically and mentally, so some may even try to leave on their own accord. But if this is an employee that is crucial to your company or has a lot of potentials, you should try to make them stay. And sometimes the best way to do that is to offer them a retention bonus agreement. Now you will have to offer them financial incentives to agree to seem more lucrative, and if you’re lucky, they just might stay.

Employees are easily the most important asset that any company has, which means it should be your priority to secure them. And the best way to secure an employee is by offering them a retention agreement. A retention agreement is a great way of showing that you care for an employee, and you value their addition to your company.

However, more importantly, it is always good for your company to keep older employees. Older employees know the ins and outs of that specific business and are more comfortable with their coworkers. New employees will need a little more time to adjust to their current surroundings, and even when they do, there is no guarantee that they will be as productive as the prior employees.

4) Identify the Strengths and Weaknesses of Every Employee

Conducting a performance analysis for every employee is very important. It can not only tell you which employees are vital to your operation, but it can also help the employees’ progress. You should remember that employees are your company’s biggest asset. And by getting to know their strengths and weaknesses, you could help better channel their skills and experience to the benefit of your company.

Analyzing the strengths and weaknesses of all of your employees – new and old alike – can help you keep your employees productive and less frustrated. Although employees experience burnout for a multitude of reasons, a major reason is struggling against their weaknesses. By analyzing strengths and weaknesses, you can assign tasks accordingly, and avoid your employees burning out faster.

Other than reducing the rate of burnout among employees, playing to the strengths of your employees has its benefits. You can make your employees more productive by playing to their strengths, which can make them more willing to work.

Retain Your Employees

5) Create an Incentive Program

While employees are the lifeblood of a company, motivation is the lifeblood of productivity. Motivation is what helps them strive and achieve better, and it is why you should try your best to motivate them after the merger.

Morale and motivation are often low after an M&A and is why companies need to start an incentive program to help boost morale.  An incentive program can not only help bring productivity back to the way it was, but it can actively increase it. The key to a good incentive program is the “incentive.”

By providing your employees with good benefits, coupled with the tasks that they get according to their strengths, you can have quite the intimidating workforce and can retain employees easily.

6) Give Access to Information About the Merger

While some employees may be more comfortable with confronting their manager and talking to them about the changes, others may not be so open. So besides being transparent, you will also have to provide information about the merger to your employees. You can do this either through an email or through a post on interconnected software for the business.

This transparency will be key throughout the days of the merger, as not every employee will go to their manager to ask about more information about the merger. Other than easily passing on information to all of your employees, this transparency will also show your workforce that you are committed to providing them with information about the merger and that you care about them.

By reducing uncertainty and providing deal tracking, you can reduce the panic that a general M&A cause. Spreading information can also significantly control the drop in productivity among all of your employees.

7) Continual Employee Training

During an M&A, a company is always looking to cut costs to make up for the resources that are going into due diligence. And one of the first places that they look to cut costs is their employee training programs. Now, if you are thinking of doing the same, you should think twice as this can stump the productivity of your employees.

Since most of these training programs are directly linked to the performance of employees, you can expect to see a massive drop in productivity for your employees. It is always important to give your employees discretionary resources, as this can make them feel more at ease. Moreover, cutting these training programs gives the message that a company doesn’t care about its employees improving, which is not the best message to give off to retain employees.  

8) Meet With Employees Face to Face

Finally, meeting with them face to face can play a crucial role in gaining the confidence of your employees, both old and new. This face to face communication shows that you, and, in extension, the company cares about them and values their input to the company. By effectively communicating with your employees, you can reduce the anxiety of the merger and can gain their loyalty towards the organization.

Every employee will feel some form of insecurity throughout the merger. So it is your responsibility to talk to them about the changes and help ease the uncertainty of the transaction. And sometimes the best way to do that is face to face in person. This can help build their confidence, and if they have something to ask that they otherwise couldn’t in front of others, they can do so in person.

Retaining employees is essential to any company after an M&A, as it saves time and money, both of which are often luxuries a company cannot afford after a merger. So by focusing on these five tips, you can help the merger slide along. Since all new employees will need training and some form of work on them, the best thing for your company to do is to keep as many of your current staff as possible.

Retain Your Employees


Written By
Lori Wade is a journalist from Louisville. She is a content writer who has experience in small editions, Lori is now engaged in news and conceptual articles on the topic of business. If you are interested in an entrepreneur or lifestyle, you can find her on Twitter or  LinkedIn. .

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