Mercer Insights


Develop an Effective Retention Strategy to Enhance M&A Deal Success - Mercer Point of View


More and more companies today recognize that talent is one of the essential components in the success of M&A transactions. In many cases, achieving the promised value of a deal depends as much on the skills and experience of key executives and employees as on any other attribute. Companies are more likely to retain the best people in both legacy organizations — and therefore position themselves to succeed — when they focus not only on the financial and operational aspects of the deal, but also on talent management.

M&A deals create special talent risks

Even at the best of times, companies often struggle to engage and retain the talent that can help them succeed. A divestiture or an acquisition only magnifies this challenge, from increasing employees’ perceptions of risk and uncertainty. Concern about the organization’s future — and their own — can increase the motivation for some individuals to consider alternative employment.

Other issues — confusion about business strategy, problems with integrating the two entities’ organizational cultures, a lack of role clarity, and a failure to effectively communicate with the workforce — also can undermine employee engagement and leave organizations vulnerable to losing key talent. When those at-risk employees are critical to integration or to the organization’s long-term success, their potential departure poses a serious threat to anticipated deal ROI — and to the very survival of the new entity.

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