How can an acquiring company prevent the loss of key talent/key employees?


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    What are useful ways to prevent the loss of key talent or key employees following an acquisition or merger?

    Anirvan Sen

    Interesting question Chris. I believe the definition and interpretation of the words key talent or key employees is required. This is where different people will give different opinion. Even though we want functional and operational leaders to make an unbiased and rational selection, in practice, this selection is almost always biased.

    In my opinion, here are the categories who should be considered as key talent and it should be mandatory to retain them
    – individuals who possess a key skill-set that is highly valuable for an organization specially if it is knowledge-based and part of IP of the company
    – Sales/BD people who generate most of the revenue for the organization (use pareto 80:20 principle)
    – individuals who possess deep institutional and contextual knowledge

    All other skills can be deemed as negotiable. Some practitioners may counter this and propose that high potential and/or high performers should be retiained. My cross argument is that high potentials and high performers are generally loyal and continue with their companies. In fact, a little assurance and motivation is good enough for them to continue. These are the people who can’t be easily woo-ed by other companies that easily. Of course, when I say this, I also would like to caution that if the leadership irks them and brush them the wrong way, they may walk out irrespective whether there is any retainer or not.

    Craig Hasler

    Hi Christopher,

    Thanks for the prompt…I don’t think anybody has a “crystal ball” solution with regard to this challenge. Both Anirvan and Mona have shared great points above. I believe that those with advanced product/solution understanding and valuable industry relationships (sales/business development) are the most important individuals to retain following an acquisition. Mona’s suggestion of retention bonuses is a great place to start as most people are fueled by compensation. Additionally, employee recognition (among their peers) and involvement in future strategy planning can also be a great way to keep younger talent motivated and engaged.



    In addition to all comments above, I am under the impression that the protection periods for all the employees (during which the rewards T&C are not allowed to be less favourable than pre-merger) are becoming longer, above legal requirements where applicable.

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