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At this year’s Nordic M&A and Private Equity Forum, we sat down with Adam Rosenberg from Mercer to get his take on Mercer’s upcoming report on employee retention.
Mercer’s 2017 report on people issues that companies face after M&A deals recognises a recurring theme of retaining talent. Companies in 2016 were struggling to figure out which employees to keep without exceeding their budget. What the report discovered is that successful acquirers have a “bottom-up” approach. Instead of filling out a budget, they choose which employees that they wish to retain, and build their budget around retaining those employees.
The risk with retention during the M&A process is first and foremost, overspending. “We’ve seen examples of people paying huge amounts of money, way more than was needed….but they could’ve done it for half or a quarter of the cost.” The second risk was not looking past the senior managers. There were examples of companies where the talented employees, necessary to the company, were not senior employees. Adam mentions that the sellers can often be helpful in identifying those people, but buyers should be wary of their motivations. He goes on to tell us where the seller recommended the entire 200 person staff of the company by extrapolating the idea that this person is necessary to this person, who is necessary to this person, and so on and so forth.
If you missed Adam speak in Stockholm you can hear from him in London on the 6th July at the European Corporate Development Summit.