What’s your company’s most valuable asset? If you’ve structured things well, chances are good that the answer is your people. When you buy a business, you’re buying the team that comes with it. So don’t alienate them on day one with policies that cause them to jump ship. Remember that M&A can be threatening for employees, who may worry about job security, corporate culture, the future of the company, poor communication, changes in company policies, and so much more. What can you do to keep good people on board, ensuring smooth sailing as you take the helm? Follow these strategies.
Do Your Research
You should gain access to personnel records as part of the acquisition. Get to know as much about your new team as you can. You’ll need to understand how new employees fit in, the role they fill, and their past performance.
Be wary of official statements only, though. Often the most valuable team members have institutional knowledge, exceptional social skills, or other attributes that will only be visible once you get to know them or conduct interviews with their colleagues.
People work to make a living, not out of company loyalty. Make their work more worth their while by offering an incentive to remain on board. Cash bonuses, additional days off, flexible scheduling, remote work, and other incentives can help keep people on board. And when you can, offer recurring benefits as opposed to one-time offers. A bonus is nice, but a pay raise is more effective.
Build a Strong Leadership Team
Managers greatly influence the extent to which people remain on board. You need a good leadership team build of managers that employees trust. To whatever extent possible, consider offering management promotions to people from the acquired business who already serve as de facto leaders. Then train and develop a new generation of leaders who embrace and support the new organization.
Be Mindful of Increases in Workload
M&A often means a major increase in workload. For managers and owners, who stand to benefit more from the process, this makes sense. But for employees, there may be little reward. Keep workloads manageable by bringing on new people where possible. And when you do have to increase workloads, compensate fairly for doing so, including with promotions, raises, overtime, and bonuses.
Develop an Integration Plan
Employees transitioning to a new team want to feel welcome and valued. Often, they feel out of place and confused about their future. Develop an integration plan that treats them as valued members of the new company from day one.
Ask for Feedback—Then Use It
Feedback is always valuable—even when it’s critical, or even mean-spirited. Encourage people to talk openly about what’s wrong and right with your company. And reward them for doing it, even if you don’t like what they say. Employees enjoy insight that managers and owners are too distanced from. And they can often detect an emerging problem well before leadership does. So make feedback a part of company culture, and make it easy to provide by sending anonymous surveys or using an anonymous suggestion box.
6. Solicit and Act on Feedback.
Finally, throughout the entire M&A process, you should encourage constant feedback from your employees, old and new, about how the integration is going and what areas need improvement.
Set up feedback boxes or even (anonymous) online forms on which they can leave their comments. Beyond asking for feedback, your employees should also feel and see that their input is being heard and put into action. Be transparent about the feedback you get and how you’re working toward fixing or improving the entire process.
Employee retention is a struggle for many companies. More than 50% of businesses worldwide report they struggle with employee retention even without the added pressure of M&As.
The key to successfully keeping your employees happy and engaged amid an M&A is demonstrating your ability and commitment to doing the right things for them. This may include constant and transparent communication, setting the right expectations, offering financial remuneration, and supporting them in terms of professional growth.