Employee retention is one of the biggest challenges during Mergers & Acquisitions. Many M&As are motivated by a desire to access fresh talent, yet employee turnover can be as much as 70% following a merger.
While retention is a critical component of any human capital strategy during a merger, it is far from the only consideration. Large-scale restructuring presents a unique opportunity to reimagine key talent practices—including hiring, professional development, succession planning, and team design.
Approaching these areas with a fresh perspective can help align the organization's workforce with its evolving strategic goals. With the right strategic approach, the HR team can work to get the right people into the right roles. In other words, this is a chance to review and renew the talent strategy.
Why mergers are the right time for a new talent strategy
Mergers are always a busy time, placing additional pressure on leaders and HR professionals. Talent and human capital strategy can become reactive in such moments, with a natural focus on maintaining engagement and fighting staff turnover.
Nevertheless, this can be the ideal moment for a bold new talent strategy. There are several reasons for this, including:
- Disruption is expected: Change is already anticipated during mergers, reducing resistance to new talent approaches that might otherwise face pushback.
- Systems are in flux: With processes being redesigned, it's the perfect time to implement forward-thinking talent frameworks aligned with future goals.
- Combined talent pools: The merging of workforces brings together diverse skills and perspectives, creating opportunities to identify previously overlooked high-potential employees.
- Cross-functional potential: Different organizational strengths can be leveraged to form teams with complementary capabilities that neither company could create alone.
- Strategic vacancies: Natural attrition during mergers creates openings that can be strategically filled to address skill gaps and future needs.
- Comprehensive assessment: The integration process already requires extensive workforce evaluation, making it the perfect time to implement sophisticated talent assessment frameworks.
- Leadership recalibration: Mergers provide a natural opportunity to reassess leadership needs and develop a more robust succession pipeline.
- Culture reset: The talent strategy can be designed to reinforce the desired culture of the new combined organization rather than perpetuating legacy approaches.
Right now is the exact moment to review your entire talent strategy. Here's how to do it.
How to execute a talent transition strategy
Transitioning to a post-merger organization can have huge implications for the people involved. Impacted employees might need to learn new skills, take on new responsibilities, or leave their old team to join a new one.
In the long run, however, this can be an amazing opportunity for all involved. For the team members, it means fresh challenges and new development opportunities. For the organization, it can mean a more dynamic, streamlined team. Here are five steps to making this strategy a success.
1. Engage with employees
Communication is essential during any kind of business transition. It's even more important during a merger, as employees will fear losing their jobs or suffering career setbacks.
Communication needs to be a two-way street during the merger. The organization should share news about future plans and help teams understand the vision. Employees, meanwhile, should have opportunities to talk about their goals and ambitions. A two-way conversation will help guide the talent strategy and find a balance between organizational needs and employee preferences.
Suggestion: Conduct stay interviews with staff members. Find out what they like and dislike about their role and look at opportunities to renew their career paths.
2. Create a centralized talent selection function
Mergers can often raise concerns about fairness. People worry that leaders in power might prefer their existing staff over newly acquired employees or that certain teams will try to stick together. Such concerns aren't always unfounded—there can be an element of bias in post-merger talent decisions.
A centralized talent selection team can help to efficiently organize and consistently apply all decisions, especially when discussing which staff members to retain. An impartial team, comprised of senior leaders and HR professionals, can oversee talent transitions and ensure that all decisions are based on performance.
Suggestion: Launch a Talent Strategy Team early in the M&A process. Make sure that this team documents all decisions.
3. Review current job descriptions and operational dependencies
Mergers normally call for a review of job descriptions, as the two previous organizations will have had different team structures. This is an excellent opportunity to review requirements for all roles, especially if there's a need to include new skills, such as IT proficiency.
It's also a good time to look at how teams collaborate with each other. Dependencies on certain teams or individuals might create process bottlenecks, slowing down productivity. This transition is an ideal moment to create a more dynamic team structure.
Suggestion: Work with leaders and hiring managers to see how talent needs map onto organizational objectives. Create new job roles and team structures that reflect those needs.
4. Commit to new professional development plans
Big structural changes could require additional professional development. For example, if your organization plans to adopt AI, your team might implement AI training. In some cases, people might need to revisit their planned career path. It's a chance to set new professional development goals and training programs.
Talking about professional development can also help improve employee retention. By making fresh plans, you will encourage your team to imagine a new future within the organization. This can help to allay some doubts that naturally emerge during a merger. It will also help the team understand their role in the broader strategic vision.
Suggestion: Encourage leaders to hold one-to-ones with their direct reports as soon as possible, especially if they have new people on their team.
5. Encourage a new organizational culture
Cultural integration remains the greatest predictor of merger success, yet it's often addressed too late in the process. Rather than allowing two separate cultures to persist or forcing one culture upon another, use this transition to thoughtfully cultivate something new and better.
Pay particular attention to symbolic actions during this period — how meetings are run, how decisions are made, which voices are amplified, and how conflicts are resolved all send powerful signals about the emerging culture. Create intentional opportunities for employees from both organizations to collaborate on meaningful projects, as shared work experiences build cultural cohesion faster than any policy document.
Suggestion: Create a Culture Integration Task Force with representatives from both organizations at various levels. Charge them with identifying core values for the new entity and developing specific initiatives to embed these values in day-to-day operations.
Need help managing talent transitions?
Even if your leadership team is fully behind this bold new talent strategy, you might still encounter one major issue: resources.
You need HR experts to execute every step of this plan, but the HR team might be tied up with tasks related to the M&A. How can you extend your resources to cover all of these responsibilities?
HR outsourcing could be the answer. Working with an HR partner gives you access to experts who can help with:
- Employee engagement
- Retaining key employees
- HR strategy
- HR software integration
- Compensation and benefit planning
- Training and development
- Cultural alignment
- ... and all on a flexible basis according to your needs
Want to explore your HR outsourcing options? Book a call with Helios HR today and find out how to attract, engage and retain the brightest talent for your team!
