Cost optimization and wellbeing strategies in M&A: A path to maximizing deal value 

In today’s uncertain economic environment, organizations are grappling with the dual pressures of maintaining workforce wellbeing while implementing cost containment measures. These pressures are felt acutely during mergers and acquisitions (M&A): one of the most transformational milestones in a company’s growth journey. The stakes are high; research shows that individuals are 8% more likely to be diagnosed with depression after an M&A transaction compared to before, highlighting the mental health challenges that can arise during these transitions.¹ Perhaps unsurprisingly, as much as 40% of critical talent leaves within two years of a deal's close.² This loss of talent and the potential decline in employee wellbeing make it crucial for companies to prioritize the wellbeing of acquired populations to drive retention and engagement.

To navigate these turbulent waters, organizations must adopt a holistic approach that addresses both monetary and non-monetary aspects of the employee value proposition. By investing in employee wellbeing, companies can foster a sense of belonging and engagement, essential for achieving deal value.

To achieve balance between these key objectives, find three actionable approaches below:

Targeted monetary retention programs

Instead of relying on broad cash bonuses, organizations should implement targeted retention programs that focus on key talent segments. By identifying critical employees who are at risk of leaving, companies can allocate resources more efficiently, ensuring that their investments yield the highest returns.

Non-monetary benefits

In addition to financial incentives, organizations should leverage non-monetary strategies that enhance the overall employee experience. Flexible work arrangements, professional development opportunities, and initiatives that promote a positive workplace culture can significantly improve engagement without incurring substantial costs.

Transformation and transparent communication

Many organizations consider M&A transactions as a catalyst to transform their operating environment, especially in a period of economic change. Whether implementing wellbeing initiatives, developing a strategic workforce plan or establishing a global benefits strategy; consider M&A as an opportunity to drive needed change in your employer value proposition. Keeping employees informed about changes and involving them in the integration process can alleviate anxiety and build trust, leading to higher engagement levels.

Ultimately, the goal of any M&A deal is to create value. By prioritizing the wellbeing of acquired populations, organizations can enhance retention and engagement, which are critical to achieving this objective. Employees who feel valued and supported are more likely to remain with the organization, contribute positively to the culture, and drive business success.

In conclusion, balancing the wellbeing needs of the workforce with cost-containment measures is not only feasible but essential in the context of M&A.

To learn more about effective retention strategies during M&A, visit Mercer’s insights on strategic retention. Embracing a comprehensive approach to talent retention will not only safeguard your deal value but also position your organization for long-term success.

Watch our webinar replay to learn more about cost optimization and employee wellbeing strategies.

_{¹ Mercer’s “Delivering the Deal: The Unrealized Potential of People in Deal Value Creation” research report, 2021}

_{² How Do Acquisitions Affect the Mental Health of Employees?, October 2021; Laurent Bach, Ramin P. Baghai, Marieke Bos, Rui C. Silva}