M&A deals multiple handshakesCEOs on the acquisition side of an M&A deal can make life easier and the transaction less risky by figuring out beforehand the best way to retain key executives and employees, Mercer asserts in a new report.

The consultancy said that leaders would do well to “develop effective retention strategies for executives” as well as “key stakeholder employee groups” that give the soon-to-be-acquired company its reputation and value. Mercer said that “appropriate severance programs, stay and retention bonuses, roles, and decision-making” both during and after an M&A transaction are all important things to keep in mind.

“This helps keep customer relationships intact and allow for an orderly transfer of the knowledge required to operate a business going forward,” Mercer said.

Even before that, however, leaders in the acquiring company must assess the target acquisition’s leadership team and capabilities of key employees, Mercer noted.

“Use skills inventories and competency assessments to gauge selection and ability to execute on strategy, effectively govern, lead people, drive culture change and deliver business results,” Mercer’s checklist states.

Other things that Mercer recommends CEOs keep in mind when acquiring another company:

  • Figure out “the right pace and amount of disruption.” Along those lines, it is key to communicate regularly and openly so employees understand the culture of the acquirer company, the new business goals, their roles and what will be expected of them.
  • CEOs must also evaluate HR service, delivery and design needs. In other words, make sure paychecks and benefits for the acquired company will be in place and that human resources is ready to roll so business results can be the best possible.
  • Make sure experienced people are in place in order to efficiently integrate operations and handle employee departures. Mercer recommends a project management office, integration management office or separation management office, with the idea that it would make decision-making and the merger operation proceed quicker and more efficiently.
  • Take a global view in order to manage benefits effectively.
  • Rewards matter. Mercer said that incentive metrics, non-cash rewards and other motivational tools can help attract and keep “the right talent.”

Mercer’s checklist comes from its M&A Transaction Services division.

Source: Mercer