How to navigate an acquisition without alienating your current employees

M&As can provide a bright future for the company, but the process can be stressful. Talent is your most valuable asset, so make sure you give employees what they need to weather the changes.
Babak Varjavandi Contributor Babak Varjavandi is president and CEO of Nakisa, which provides enterprise business solutions for organization design and accounting and compliance.

Many watchers expected an uptick in merger and acquisition activity when the world began to emerge from the pandemic in 2021, but the current spike is record-breaking, topping $2.4 trillion in the first half of the year. That’s more than a 150% increase over last year’s M&A activity level.

Coming out of the pandemic, there’s a worker shortage that has complex causes, which has increased the competition for talent. On top of that, we’re experiencing what has been coined the “Great Resignation,” with 4 million people quitting their jobs in April alone.

The good news is that with the right leadership approach and preparation, you can address uncertainty and keep your valuable talent on board.

Business leaders everywhere have a greater appreciation of the value of their people as a competitive asset. So, if you’re contemplating a merger or acquisition at this critical juncture, you know it’s important to retain talent and keep employees happy during the M&A process. It’s simple — you need them.

The war for talent is real

Companies — especially startups looking for highly skilled talent— were locked in a war for talent before the pandemic. COVID-19 intensified it, and if employers thought they had the upper hand when workers were getting hammered with layoffs and furloughs, they know better now. A report published earlier this year cited this startling statistic: More than half of workers in North America said they plan to look for a new job when the pandemic ends.

Money alone won’t solve the problem for employees who are motivated by purpose. Employees who are invested in your company put their heart and soul into it, which is invaluable. But employers have to work harder to keep that loyalty, and M&A situations threaten the status quo.

Acquisitions add an element of uncertainty, and workers who feel uncertain about a company’s future and their role in it are more likely to look elsewhere. The good news is that with the right leadership approach and preparation, you can address that uncertainty and keep your valuable talent on board. Here’s some advice for keeping employees top of mind during M&A:

Communicate, communicate, communicate: If you’re steering a startup or established tech company through an acquisition, the most important thing you can do is share your vision of what the new company will look like and how employees will be a part of its success. Employees today have a more entrepreneurial mindset than previous generations. They are purpose-driven, and they need to feel like they have a stake in the business. In a situation where uncertainty is driving anxiety (and causing employees to eye an exit), it’s hard to overcommunicate, and undercommunicating can be disastrous.

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