Securing the Future: Career Paths and Job Security in Mergers and Acquisitions (M&A)
Robin Benoit
August 15, 2024
When a merger or acquisition is announced, employees often feel anxious about their future within the new entity. As we’ve covered in our previous articles, communication and recognition are important tools for retaining great talent through the integration process, but what about after the merger is complete? How do you ensure that the people you worked so hard to retain are now set up for a successful career within the new company? Let’s explore some best practices for career development and retention well beyond Day One.
Transparent Career Pathing
Clearly outlining potential roles within the new organization for employees can help promote engagement and alleviate fears about job security. When employees have a clear vision of future opportunities and the skills required to obtain those opportunities, they are more likely to feel secure and motivated.
Career pathing does not have to have a “one size fits all” approach. In fact, employees are more likely to have an array of career paths, rather than one singular track. Some individuals may want a lateral move to a new department, rather than a hierarchical move up to a leadership role. I have worked with an employee who moved from a marketing role to an operations role, for example, and found the challenge of a new department incredibly exciting and fulfilling. The key is that the employees know that they have opportunities available to them, but also have some measure of autonomy in their career path.
Skills Development and Training Programs
Investing in training and development programs to upskill employees for new roles within the merged company demonstrates a commitment to their professional growth and to their success within the company. Tailored training programs help fill new positions with existing talent and show employees that the company values their development. Approaching this period of adjustment with a “learning curve” mindset and an understanding that these transitions may take some time will help put employees at ease during the transition.
And to address the elephant in the room that is AI: according to one HBR article published in 2023, the value of a current skill has a half-life of less than five years, compared to approximately 26 years roughly a generation ago. With such rapid technological advances, strategic reskilling and effective training should be top of mind for any employer who wishes to remain competitive – those undergoing an M&A may just see a more focused need.
Mentorship and Coaching
Mentoring and coaching programs provide a multitude of benefits for both parties. Image via Rido/Adobe Stock.
Implementing mentorship and coaching programs can provide stability and support for employees during the transition. As a mentor and executive coach myself, I can testify to the benefits for both parties — a mentor within the organization has a chance to self-reflect on their own career path, foster engagement, and ease fears of the unknown, while the mentee has an opportunity to ask questions, bounce ideas, and build confidence.
Guidance from senior leaders helps employees navigate the complexities of the merger and feel more secure in the company. This can also help bridge communication gaps between management and employees, ensuring concerns are heard and addressed.
Performance Management and Recognition
Continuing performance evaluations and recognition programs during the M&A process helps maintain motivation and reward high performers. As noted in our post about recognition and appreciation, rewarding contributions keeps morale high and reinforces a culture of appreciation.
From the performance management perspective, ensuring expectations are clearly articulated (especially if those expectations have now changed) is increasingly important. Also, be sure to audit, review, and standardize performance management across the merging entities to whatever degree possible to ensure fair and consistent evaluations. Any process changes should be clearly and thoroughly documented and communicated to ensure aligned expectations.
Succession Planning
According to one Deloitte study, 86% of leaders surveyed believe leadership succession planning is an “urgent” or “important” priority, yet only 14% of leaders believe they do it well. Such a huge discrepancy often leads to ill-equipped external hires taking the reins, or former leaders returning to a company and their previous positions (just look at Howard Schultz and Starbucks for one highly visible example).
Although succession planning is ideal for most roles within a company, it is especially key for leadership positions that may require extensive internal training. Developing a robust succession plan that identifies and prepares internal candidates for key roles ensures that the organization has a pipeline of capable leaders ready to step into critical positions as needed. Now that the organization has merged, your candidate pool likely increased – focusing on identifying successors across both entities will increase your long-term opportunities for success.
Incorporating comprehensive career development and pathing strategies during an M&A can make a substantial difference in employee retention and organizational success. By providing transparent career paths, investing in training, and maintaining robust mentorship and performance management programs, companies can foster a supportive environment that encourages growth and stability. These efforts not only help in retaining top talent but also ensure that the merged entity is well-equipped to navigate future challenges with a motivated and capable workforce.
Robin Benoit is the Co-Founder and CEO of Benoit Global, a human resource consulting firm specializing in mergers & acquisitions.