More companies hold on to key players after mergers, says report
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Almost four-fifths of companies that have gone through a merger or acquisition have managed to hold on to their ‘acquired talent’, according to a study by Willis Towers Watson.

Its 2017 Global M&A Retention Study found that 79% of acquirers had been successful in retaining at least 80% of their employees after they signed retention agreements.

This compared favourably to the advisory company’s last survey into M&A retention, in 2014, which found that only 68% of companies met this threshold.

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However, after those employees have stayed with the company for a year, that figure goes down to around 50% of companies retaining this level of staff.

In terms of retention tools, cash bonuses (typically a percentage of base salary) remain the primary financial award in retention agreements for both senior leaders (77%) and other key employees (80%).

Timing was also important to retention. Nearly a quarter (24%) asked senior leaders at target companies to sign retention agreements before the initial merger agreement signing.

This early retention tactic was found to be a differentiator between acquirers who held on to most staff (28% did this) and low retention ones (11%).

Of those employees with retention agreements who leave the company before the end of the retention period, nearly half (44%) blamed the new or changing culture.

Other top reasons for leaving included being aggressively pursued by competitors (36%) and not liking their new role (25%).

Acquiring companies have lowered their retention budgets since 2014, found Willis Towers Watson.

More than half of the acquirers (55%) had a retention budget less than 1% of the total transaction cost, which is nearly 50% lower than 2014, when the budget median value was 1.9%.

Norton added: “While there are many reasons why this decrease may be taking place, we see acquirers becoming more strategic and more selective in using their retention spend for maximum impact on a targeted group of talent.”

Source: personneltoday.com

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