Almost nothing creates as much uncertainty and doubt in the workplace as a merger or acquisition does. While organizations may complete such deals to gain market share or capabilities, it is also often the case that they are looking for synergies and the opportunity to cut redundancies -- i.e. jobs.
Consulting giant McKinsey reports that the global M&A market continued to climb in the second half of 2021 with the value of large deals increasing by 67% as companies, private equity firms, and special purpose acquisition companies announced almost 11,000 large deals.
But while the investors and executives may be celebrating, smart employees often eye the exits when such a deal is announced. Maybe they take the first step of updating their LinkedIn profiles or resumes. They want to be ready for changes -- downsizing, department consolidations, their projects being deprioritized, or maybe just a new boss. It’s good to have your options open.
Talent Prime For Picking
Just when your employees are questioning their future with the company, that’s when they are likely to get contacted by talent recruiters.
That’s according to Mark Sasson, managing partner at Pinpoint Search Group, a cybersecurity recruitment firm, who instructs the associates at his firm to call all the talent when a merger or acquisition deal is announced.
“When we see these events occur, my guidance to the recruiters on my team are that these are the first people we are reaching out to. That’s because we know that in many of these situations there’s going to be uncertainty and a greater willingness to listen to opportunities. We go after those people. I mean, they call us headhunters for a reason,” Sasson says.
That can create a problem for enterprise organizations that want to retain their most valuable talent, particularly during the current market conditions when there are more job openings than candidates to fill them.
Ways to Slow the Stampede
How can an enterprise organization retain those valuable employees even during the uncertain time of a merger or acquisition? There are indeed steps that organizations can take if they want to retain their talent. Sasson reports that some employees are less likely to be open to his firm’s recruitment calls, and it comes down to how management has handled communications about the merger or acquisition.
For instance, with the FireEye and McAfee deal, Pinpoint Search Group talked to a number of employees at the company after the deal was announced.
“There was confusion and uncertainty, which led to a willingness for those professionals in those organizations to listen to the opportunities we had,” Sasson says. “There was no visibility whatsoever, which created an environment where they were more open to hearing what else was out there.”
In some cases a company may be planning downsizing after a merger, and they may be allowing that uncertainty to linger because they want some employees to voluntarily find new jobs, Sasson says. However, in other cases organizations may want to retain their valuable talent, particularly in this tight job market. Just because there’s a merger or acquisition doesn’t necessarily mean that everyone will make a stampede to the door.
For instance, when software private equity giant Thoma Bravo acquired Proofpoint, Sasson’s recruiting team made calls into the employees at that company, too, but got a much different result. Sasson’s team asked the employees at Proofpoint why they weren’t interested in new opportunities.
“From what we understand, the CEO at Proofpoint and the Thoma Bravo team -- they seemed to do an excellent job of communicating the value of the acquisition and limiting the jitters that would typically be felt by the rank and file,” Sasson said. There were company-wide calls that explained what was going to happen, how it would happen, and why the employees should stay and how it would benefit them, according to Sasson. These are tactics that any organization can use if they want to keep their employees during times of uncertainty.
Clear communication and transparency about what is going on is key. Communicating the ultimate benefits of the changes to your talent is even better. That’s what Thoma Bravo and Proofpoint did, according to Sasson, and it made all the difference.
“This was a calculated approach in order to ensure the retention of good talent.”
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