Situation: A company has either a merger with another company or sale of the company pending. While most direct staff will be retained, roughly half of the indirect staff may be at risk. The CEO’s objective is twofold: to retain key indirect talent before and during transition and to do right by those who have made strong contributions to the company. How do you retain key staff during a merger or sale?
Advice from the CEOs:
- One member dealt with this a few years ago. The company set up a retention fund for important but potentially impacted employees in advance of the anticipated transaction. The longer the employee stayed with the company through the transition, the larger the payout for which they were eligible. In the case of no transaction, the funds were to be returned to the company.
- An alternate version of the above option is to use insurance to fund a retention package for a group of key employees. This package may or may not be required depending upon the transition.
- For potentially impacted employees, consider a retention package that rewards them for staying long enough to train the purchaser in their areas of expertise.
- Look at outplacement services as part of the package for employees. Let employees know that this is part of the package if they are not retained post-transaction.
- Seek outside consultant expertise to assist in the design and administration of a retention package. To compliment this look at your own network, and seek the advice of others who are well-versed with the technical aspects of employee transition.
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