With 1 million more job openings than unemployed workers in the United States, retaining talent through an integration is more critical than ever. Whether your acquisition was driven by the desire to “acquihire” talent or retain existing talent to drive growth and business strategy, here are four tips to ensure you don’t lose your greatest assets during the deal process:
If you didn’t assess the acquired culture and talent during diligence, you’re already behind
Even if you did, its importance may have taken a back seat to financials, growth drivers, synergies and valuation models. In a recent survey, 43% of deals were delayed, didn’t close or the purchase price was impacted due to cultural issues and 67% experienced delayed synergy realization. Integrations create feelings of anxiety and disengagement for most employees. Taking the time to define and align leaders to a shared vision, objectives, and KPIs will provide clear priorities for overall people integration planning, clear messaging for employees throughout the integration process, tangible metrics to monitor progress, understanding of challenges earlier and ability to communicate value. Most importantly, make sure actions support words.
Design your target operating model based on roles, not specific individuals
When organizations start the integration planning process, leaders tend to either overlook the need to plan for the necessary future state roles or go too far into the weeds, immediately assigning specific names to specific roles. When defining the Target Operating Model, leaders should objectively identify the essential roles and associated skills for the future state while being mindful of synergy targets (on average, roughly 30% of employees are deemed redundant in M&A between companies in the same industry). As the roles necessary become clearer, draft candidate profiles and then assign names where you can to fill in the structure. Identifying these teams, roles, skills, and eventually names early in the post-close phase of an integration will better enable leaders to strategically plan for how to keep key individuals, train others, and hire where necessary.
Focus on the metrics that matter – beyond employee and customer retention
The tie between employee engagement and customer retention are well documented and are critical in meeting revenue growth targets. Make sure that your KPIs align across people, process and technology – and tie directly to your customer and revenue goals. Include leading indicators of retention through employee engagement surveys and overall health. Monitor customer net promoter score. Assess technology and process adoption rates and look at productivity metrics.
Financial retention packages aren’t enough
Yes, they matter. But even with them, more than half of the employees that leave cite culture as their primary motivator. With a vision for people integration and the necessary roles identified, integration offices will create a roadmap, process, and roles for integrating people from both organizations. Organizational change management should be part of that roadmap to determine impacts to groups and roles, manage effective communication, prepare employees with training where needed, and monitor employee readiness and engagement.
Assessing culture during diligence and preparing for people integration by defining the why, who, and how can help merging organizations keep the talent they need to drive successful business outcomes. For more information, please contact Sean Adkins or Colleen Campbell.
Have you heard the news? We’re working through our own cultural integration right now after our acquisition of Waterstone Management Group. Ask us how we’re doing!