The Top 5 Reasons Employees Leave During a Tech Merger—and What to Do About Them

The Top 5 Reasons Employees Leave During a Tech Merger—and What to Do About Them

Tech M&A is accelerating rapidly, with owners and shareholders able to make significant profits from increased consolidation. But still, about half of mergers fail, and many more fail to realize their full value potential. What’s behind this phenomenon? Failures of integration are common, and employees jumping ship can drive such failures. If you’re buying a tech business or selling one, you need to know why employees leave during tech M&A—and what you can do to prevent them from departing.

Poor Communication

Many companies make the mistake of letting the rumor mill do the talking for them. Your team shouldn’t be the last to know about the merger. Poor communication leaves them wondering what comes next for them. So instead, develop a communication strategy early, and communicate openly and frequently with your team about what the merger is likely to mean for them. Encourage them to submit questions, then answer those questions as openly and forthrightly as you reasonably can.

Too Much Work

Tech M&A offers many rewards to owners and shareholders, but to employees, it’s just another day at the office. That means there’s little incentive for them to take on extra work just to ensure a merger goes through—especially if the merger doesn’t offer tangible benefits. Keep workloads manageable, and if you can’t, tie benefits and compensation to the work your team puts in.

Worsening Corporate Culture

A merger often means a transition to either an uncertain or a worse corporate culture. Consider what your team values most. Is it a flexible schedule? Quality management with clear directives? The chance to work from home? A workplace that does not tolerate discrimination or bullying? You should be able to offer all of these. Be mindful of how shifts in corporate culture can radically alter the experience of working for your business.

Inadequate Compensation

Money talks. In business, it is the most powerful motivator. If pay or benefits decrease, or if work increases with no increase in remuneration, you should expect the most qualified members of your team to leave as soon as they get the chance.

Identify the most valuable members of your team, and pay them as much as you can. If they’re worth it to you, they’ll be worth it to someone else. And if you fail to fairly compensate them, rest assured that another business will be happy to offer what you did not to snap up a competitor’s most exceptional employees.

Better Offers

While you may have many reasons for owning a business, people work to pay their bills and live better lives. That means when a better offer comes along, it doesn’t matter if a person likes you or the business. They’re likely to depart. Owners must be mindful of this fact, and understand that right now it’s a seller’s market. Employees have significant power. So treat them well, offering the most robust compensation packages possible, and they’ll be less likely to set sail for other companies.