Mergers are anything but a stress-free time for company executives, and for HR and benefits professionals, the task of keeping talent around requires designing and implementing a successful retention plan.
Utilizing retention programs in order to maximize the enormous “people investment” made by global dealmakers is a nearly ubiquitous practice, with a majority putting in place financial perks to keep talent at home, according to consulting firm Mercer.
One significant trend bubbling up is that successful acquirers are taking a people-first, “bottom-up” approach when designing retention programs. They’re not first budgeting for retention and distributing to employees (“top-down” approach); they’re focusing on talent first, making sure retention is designed with a focus on key employees, Mercer says.
Some common practices of retention plan design include:
· Implementing conditions for payment: time versus performance
· Number of payments: one, two or three-plus
· Payment vehicles: cash versus equity
· Timing of payments: pre-close, post-close or both
But it isn’t just financial incentives that are on the table, says Adam Rosenberg, Mercer’s EuroPac M&A transaction services leader. Other items employers bring to the table are career growth and career progression opportunities.
In one situation, when a small employer was acquired by a larger organization, Rosenberg notes, one senior executive’s position was knocked down a few levels within the new structure.
So the larger organization changed the way it made some of its deals, making this individual an independent entity who reported directly to the global chief executive. “That restructure and that reporting line were probably just as important to the individual as the cash offered,” Rosenberg says.
“A lot of strategies are emphasizing the value of the internal opportunities those organizations create,” says Brant Shelor, a senior executive compensation consultant with Mercer, emphasizing the team aspect and ability to complete team projects.
“It helps retain not just a couple, but the majority of the team if you emphasize that mission and that goal overall,” he says.
Register or login for access to this item and much more
All Employee Benefit Adviser content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access