Your company or organization is being dissolved, downsized, or acquired into a new entity. It’s critical to maintain a level of productivity through a defined business transition period. How will employees be compensated for the uncertainty and anxiety of the experience? What blend of proactive effort will retain the staff you need for the time you need them? One thing is for sure, if you fail to implement an attractive plan for retention, there are no second chances. From our experience, most successful retention plans have four common elements to them.

1. A grand scheme of execution. Organizations who succeed in retaining staff through a closure or merger have a comprehensive plan in place before the first word is shared about the significant changes ahead. This plan includes a communication strategy with timelines and incentives spelled out for all who will be impacted. The plan needs 100% buy-in by the executive team, the human resources team, and the core management team. 

2. A substantive retention bonus. The extended period of uncertainty staff are asked to absorb is significant. Without a substantive retention bonus, the desire to retain the people you need most is compromised. A common practice is to offer a minimum bonus equal to 33% of the time you are asking them to remain in the organization. That is to say, if you want to retain employees for six months, you need to offer a minimum two-month retention bonus.

3. Attractive separation packages. Transitioning staff will want to know exactly how the company will assist them in finding new employment. A severance policy that provides an attractive financial bridge, coupled with outplacement services, becomes a compelling incentive to stay. Sometimes executive teams will choose to limit these packages because of all the other costs involved in the transaction. Most often this is usually shortsighted thinking. The potential loss of customers, production, and profits due to poor management of the transition period often exceeds the incremental costs of doing it right from the beginning.

4. Customized agreements for key leaders. Frequently there are strategic leaders whose presence and commitment is most critical to the transition. These individuals should be identified early and secured with change-of-control agreements and severance provisions that reflect the significance of their continued contribution. Standardization is the norm, but cases arise that require packages that are negotiated individually and confidentially.

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“Finishing Strong” is more than a slogan for athletes and cancer survivors. It is a mindset that enlightened companies and organizations understand. Valuing staff that supports the strategies and goals of many companies and organizations makes good business sense, whether or not they are entering or leaving your organization.

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