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Why are retention strategies important during mergers?

On Behalf of | Oct 17, 2024 | Business Law

Mergers and acquisitions are common in many industries, but they’re always highly unsettling to the employees of the companies involved.

Some employees “jump ship” at the first sign of a transition, believing that they need to get out before their job is declared redundant or the leadership changes leave them feeling adrift. Others may stick around for a while but update their resumes while they test the waters.

Figuring out the proper retention strategy for your key employees is important. To that, it helps to understand why this is so important.

Maintaining a solid knowledge base

Sometimes one or two key employees know more about the business (or a key area) than anybody else above them. They are critical to keep in place if you want to integrate the two companies with a minimum of disruption.

Protecting your intellectual property

You always want to keep in mind who knows what about your business – especially when it comes to protecting trade secrets, proprietary formulas, client lists and other intellectual property. You don’t want your intellectual property to “grow legs” and walk out the door with a few of your most highly placed employees.

Preserving client confidence

Mergers and acquisitions make everybody a little anxious – and that includes clients and customers who are worried the level of service or product quality will decline or fear that they will be “lost in the system” once a new, bigger company is established. Retaining key employees who are in contact with those clients or customers can help your company transition.

Merger and acquisition strategies are complex and multi-faceted. Having experienced egal guidance throughout the process is wise.

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