Navigating Employee Retention During Acquisitions: Tips for Keeping Your Team Intact

Acquisitions are always an exciting time for the businesses involved. After all, an acquisition can lead to tremendous growth, new markets, and incredible financial gains. Still, it comes with its own set of challenges, one being employee retention.

What are the right approaches to consider in keeping a team intact during a big change, and how can these approaches contribute to successful outcomes?

Employers can navigate employee retention during acquisitions by:

Communicating openly and honestly with their team members.
Giving employees support and resources during the acquisition.
Prioritizing the well-being of your team members.
Focusing on retaining your top talent. And,
Using the right acquisition strategies.

In this blog post, we will dive into these tips further. We will also discuss the challenges acquisitions bring and how to handle them. Lastly, we will dabble on the importance of having a post-acquisition plan.

Tip 1: Communicate Honestly with Employees

The first step in managing employee retention during an acquisition is to connect with them. Be open and honest with employees from the start. The team must understand the following:

Why the acquisition is happening
What impact it may have on their roles and responsibilities
Any changes that may come along with it

When leaders communicate during the transition, employees are more likely to remain engaged. In turn, they will be committed during the entire process.

This open and honest communication must involve the following:

Explain why the acquisition is taking place. Employees need to understand the why behind the decisions that are being made. They also need to have a clear understanding of how their role may be impacted.

Identify possible changes to roles, responsibilities, and resources. When possible, make sure to explain any changes that may come along with the acquisition. Also, tackle how those changes could potentially affect their work.

Outline expectations for employees after the acquisition. It’s important to give employees an idea of what to expect after the acquisition is finalized. This can help set expectations and ensure everyone remains on the same page.

Listen to employees’ concerns and address them appropriately. Provide employees with the opportunity to share their feedback and ask questions. This is critical in ensuring a successful transition.

If possible, aim to speak with your team members individually. This way you can create a more personalized conversation that allows for two-way dialogue. It will give you the opportunity to address any individual concerns the employee may have.

Jeffrey McNulty, Founder and CEO of New Retail Ethos Consultancy, says:

“Farming and Leadership have eerily similar qualities that can transfer to any industry. Here are the nine mandatory steps (there is a litany of other steps as well) for crop farming/leadership strategies: […]

IRRIGATION/ENGAGEMENT. Watering crops/plants is analogous to providing your employees/leaders with your time, attention, and energy. Positive energy is contagious! try asking: Are You Okay? How Can I Help You? What are Your Aspirations?”

Tip 2: Provide Support and Resources for Employees During the Acquisition Process

The next step in navigating employee retention is supporting employees. Ensure that your team members have access to resources throughout this process. This could include offering additional training or flexible work arrangements.

Content creator Dave Cairns highlights:

“Companies under 500 employees are more than 2x as likely to be fully flexible* compared to companies with 1,000+ employees. – Flex Index. (Fully flexible is defined as either fully remote or giving employee’s choice on when and how often to come into the office)

Reason: Talent attraction and retention.

Too many remain fixated on the workplace experience when it’s the EMPLOYEE experience matters most! For employees, many other considerations are more valuable than the office, notably an office with a substantial commute.”

It also involves providing job security by keeping a close eye on headcounts. Reassure employees through positive reinforcement about their value to the organization.

Team leaders must provide resources such as:

Mental Health Services

Mental health services can go a long way in helping employees cope with the stress of an acquisition. Examples include counseling and access to Employee Assistance Programs (EAPs).

Career Support

Career support should be provided throughout the acquisition process. This way, employees can explore alternative career paths within the organization. Alternatively, they can pivot their skills toward new opportunities.

Technology Resources

Ensure that your team members have access to technology resources. That will enable them to continue to do their job effectively during this transition period. This could include updated software or hardware, additional training sessions, or even remote work options.

Tip 3: Prioritize Employee Well-Being

Leaders should prioritize their employees’ well-being. This means paying attention to the physical, mental, and emotional health of team members.

Paying attention to employee well-being is critical during acquisitions. It can help foster a more positive work environment. It can also lead to increased employee engagement and loyalty.

Business acquisition specialist Deb Curtis has this to say about acquisitions:

“When the baton is passed, will the company’s heart still race passionately? As you invest in a small business, remember that its people are the lifeblood that fuels its continued success. With the current owner’s departure, take a moment to evaluate the heart that continues to beat within the organization, for it is here that the spirit of the company will endure.”

Here are some practical ways that employers can prioritize employee well-being:

Offer flexible schedules and remote work options where possible.
Encourage team members to take breaks throughout the day.
Provide mental health resources for employees who may be struggling with stress or anxiety.
Regularly check in with employees about how they are feeling.
Address any concerns before they become bigger issues.

This is just a starting point for employers. The key takeaway here is that employers must be willing to put in the effort. Ensure that your team members are taken care of and feel supported throughout this process.

Tip 4: Focus on Retaining Top Talent

Employers should focus on retaining top talent during acquisitions. Paying attention to employee engagement is key here. It can help identify those invested in the organization and those who may be more likely to leave.

Team leaders need to create a positive work sphere. They can provide meaningful rewards and recognition programs. They can also offer opportunities for career growth and development.

Consider offering leadership roles or other challenging positions to top performers. This can be a way of keeping them engaged and motivated throughout the acquisition process.

Tip 5: Utilize Acquisition Strategies That Focus on Employee Retention

Employers may want to consider utilizing acquisition strategies that focus on employee retention. For example, suppose an employer is looking to acquire another company. They should prioritize those with strong cultures and values that are in line with their own.

Employers should look for companies with similar management and leadership styles. This helps ensure that employees from both companies are more likely to stay in their roles during the transition.

These acquisition strategies include the following:

Offering Competitive Benefits

Employers should consider offering great benefits to employees to retain them. If the target organization is offering higher salaries or better benefits, employers should consider matching these offers. This will ensure that their employees feel valued and rewarded for their work.

Building an Employee Retention Plan

Creating an employee retention plan before any acquisitions is essential. This will help ensure the success of the transition process. This plan should outline specific strategies that the employer will use to retain key employees during the acquisition.

Putting this plan into action can help the team be well-prepared for any changes.

Providing Opportunities for Growth and Development

Offer training and growth chances to employees. This will help them thrive in their new roles following the acquisition. This can help employees feel supported and motivated, which can lead to greater job satisfaction and improved morale.

Additionally, providing these chances may also help increase employee loyalty. Employees will be more likely to remain with the company if they are always learning and developing new skills.

Offering Flexible Work Arrangements

Consider providing flexible work arrangements to employees. This can help make the transition smoother for everyone. Flexible work arrangements include offering part-time hours, remote options, and altered scheduling. This allows employees to better manage their workloads. All the while, they can still take care of any personal obligations they may have.

The Five Biggest Challenges of Acquisitions

Although there are many benefits to acquisitions, employers need to recognize the biggest challenges they bring. These can include:

1. Integrating Different Cultures

Different companies have different cultures and values. This can make the process of integrating two companies a challenge. Employers must be proactive in ensuring that employees from both organizations can work together effectively. All team members need to feel like they are part of one cohesive team.

Managing Partner at Nordic Minds – Nordic Leadership Marcus Honkanen stresses:

“Conduct a thorough People & Culture due diligence process. This should take into account the target company’s culture, values, management system, leadership quality, employer branding and workforce. Be assured spending time on eye level with the key people of the target company during the dd phase.”

He also adds:

“Culture clashes can be a major challenge during the dd or integration processes, especially in cross-border transactions where there may be language barriers or different cultural norms. It’s important to identify these differences early on and develop strategies for addressing them, such as cross-cultural training or appointing cultural ambassadors to help bridge the gap.”

2. Retaining Employees

Employees may feel uncertain about their future during acquisitions. This could lead to increased turnover rates. Employers need to recognize this. They must take steps to retain top talent by:

Providing career support
Focusing on employee wellbeing
Offering leadership roles to those who demonstrate high performance

3. Keeping up with Changes in Technology

Acquisitions can also pose challenges when it comes to keeping up with changes in technology. Employers must ensure that their teams can work with the most up-to-date technology. Employees also need to learn any new systems that may be required for the transition.

We’ve written more about this in our piece, “7 Reasons Employees Should Attend Seminars and Other Trainings.”

4. Having Unrealistic Expectations

Unrealistic expectations can be a challenge for employers during acquisitions. Employers should focus on setting realistic goals and timelines. They must also ensure that employees have the resources they need to meet these goals.

5. Losing Employee Engagement

Acquiring another organization can lead to a decrease in employee engagement. Employers need to devote resources and attention to maintaining an engaged workforce. Leaders can start by providing meaningful rewards and recognition programs. They can also open doors for career growth and offer challenging positions to top performers.

Team leaders can engage employees by giving them adequate support. To learn more, check out our article, “7 Ways To Support Your Employees’ Personal Advancement.”

After the Acquisition

The challenges do not stop after a successful acquisition. In fact, what happens after is just as important. Employers must develop a post-acquisition strategy to ensure a smooth transition for employees and maintain their loyalty. Employers should focus on:

Emphasizing Culture and Values

Companies should strive to emphasize the culture, values, and mission of both organizations. This will create a unified corporate atmosphere. This can be achieved by:

Developing programs that help create connections between employees from both companies
Providing chances for employees to learn about and understand each other’s cultures and values
Creating a seamless transition that allows employees from both companies to work together

Developing Leadership Skills

Developing leadership skills among employees is vital after an acquisition. Companies should make programs that help develop the skills of their executives, managers, and team leaders. That way, they can better manage the new group.

Employers should also consider providing additional training and development initiatives. This will help employees contribute fully to their roles.

Fostering Innovation

Employers fostering innovation can ensure success after an acquisition. Companies need systems and processes that encourage employees to be creative and innovative. Additionally, leaders should provide the resources members need to implement these ideas.

Building Relationships

The relationships between employees are key to the success of an acquisition. Employers should:

Build and strengthen relationships. Employers should provide opportunities for employees to build relationships with each other. This will help them learn how to work together effectively.

Foster a sense of community. Employers should create a sense of community within the company. They can plan social activities, networking events, and other initiatives to help employees get to know each other.

Promote trust and teamwork. Employers should create an atmosphere of collaboration and trust. They need to promote open talking, provide feedback, and recognize employee contributions.

Business advisor Kieran Krohn highlights this about collaboration:

“Encourage salespeople and channel managers to connect with other departments within your company, such as marketing, customer success, operations, finance and product. This will give them a much broader understanding of the business and how it functions.”

Providing recognition and rewards programs. Employers should develop recognition and rewards programs. This will motivate employees and show appreciation for their hard work.

Developing Communication Strategies

Employers need to develop connection strategies that ensure all employees feel heard and valued. Employers should focus on creating open lines of contact across departments. Team leaders also need to provide feedback and support. In addition, they must offer assistance with any challenges or issues that arise during the transition

Team leaders can develop strategies that include the following:

Holding regular meetings with employees to discuss any challenges or issues they may have
Encouraging open dialogue between team members and other departments
Creating channels for employees to provide feedback
Using tools such as newsletters to share information about the organization’s progress

Communication is undoubtedly the golden key. We’ve written more about this in our article, “6 Ways Clear Communication Positively Affects the Workplace.”

Maintaining Employee Loyalty

Employers should focus on maintaining employee loyalty. This can be achieved by offering competitive wages and benefits and creating meaningful recognition programs. Employers must also provide chances for growth and deliver regular feedback to employees.

Regularly Assessing Progress

Finally, leaders should make sure to assess the progress of their post-acquisition strategy. This can be done by:

Conducting surveys and interviews with employees
Measuring key performance indicators
Making any necessary adjustments to ensure that the organization is on track for success

The key performance indicators may include the following:

The number of employees who remain with the organization after the acquisition
The level of engagement and satisfaction among employees
Overall productivity and performance levels

To Wrap Up

Navigating employee retention during acquisitions can be a daunting task. However, by taking the necessary steps to ensure success, employers can maintain their team. They can also create a positive post-acquisition space. These steps may include:

Focusing on employee retention
Fostering innovation
Building relationships
Developing communication strategies
Maintaining employee loyalty, and
Regularly assessing progress

With the right strategies in place, employers can ensure that their team remains intact.