The Big Question: Following M&A, how do leadership changes impact company culture and staff retention?

Joanne Wright, people and culture director, Specialist Risk Group

People don’t tend to leave their jobs for higher salaries alone.

Employment has become a fuller experience and commitment, where there is a desire for gratifying work and long-term reward.

People still leave companies because of ‘bad bosses’ or follow great bosses to new homes. The impact of good leadership departing can be significant, but not unmanageable.

The departure of bad leadership can present a huge opportunity to reshape culture at the top and tune in to what teams really need and want.

Acquisition drives individuals to instinctively think about their security and future, naturally turning to their boss for reassurance.

A leader leaving can be emotional for those who have followed them and it can be daunting to have new owners or bosses.

It is therefore crucial to steady the ship.

Cultural alignment and opportunity for new colleagues are key. Colleagues are the key asset in any business and vital for a happy culture.

During the M&A process, people want to be treated as people, not numbers. Sometimes a commercial opportunity might present itself, but it’s not the right culture for the acquirer or vendor. Will the businesses complement each other? Is this a home the new teams will flourish in? Can we collaborate effectively?

Even with changes at executive level, the acquiring firm has the opportunity to reassure new colleagues and create a positive experience to avoid disruption or exits. People integration should be key in any acquisitive business.

At Specialist Risk Group (SRG), we have a dedicated head of people, M&A – Laura Irvin – who meets with all new teams as soon as a deal is announced.

People are prioritised and consulted every step of the way, ensuring they feel listened to, valued and well supported. They are then slowly introduced to our culture, way of working and wider teams.

Victoria Gallimore, chief of staff and chief people officer, The Clear Group

The most successful M&A integrations occur when the vendor is invested in identifying key talent, sharing details with them about career discussions and plans that have taken place.

Sharing this information allows buyers such The Clear Group to include key talent in the acquisition journey, ensuring they feel valued and informed about the potential opportunities available in our growing business.

In the event of leadership changes or the loss of key talent, we support acquired businesses by offering career growth opportunities for key talent who may not have had these possibilities previously.

This proactive approach helps retain talented employees and maintains continuity in leadership, which is essential for sustaining the company’s growth trajectory.

The departure of any employee impacts the business, so we maintain open dialogues to understand their reasons for leaving. This feedback is invaluable for improving our retention strategies and addressing any underlying issues.

Leadership changes or the loss of key talent can also affect company culture.

However, a strong group culture that prioritises people means that remaining staff can trust there is sufficient support to continue operations, including developing or recruiting new leaders who will foster a thriving culture for existing employees.

At The Clear Group, we emphasise the importance of a supportive and inclusive work environment.

By investing in employee development and creating career opportunities, we ensure that our people feel motivated and engaged. This helps retain top and new talent who see The Clear Group as a business that values its people and their professional growth.

While leadership changes and the departure of key talent can pose challenges, our commitment to understanding and integrating company cultures, supporting career development and maintaining open communication helps mitigate potential impacts.

This approach ensures that we continue to build a resilient and dynamic business where employees can thrive.

Leah Clancy, chief people officer, Brown and Brown Europe

How successfully a business is integrated following an acquisition depends heavily on the work put in beforehand to identify shared values, practices and goals.

Failing to do this raises the risk of cultural mismatches, which can lead to disengagement, inefficiencies and – in the worst case – attrition.

As an acquisitive business, one of the most important factors we consider when evaluating new deals is how well the company aligns culturally.

This extends beyond simply working with like-minded people – it also involves compatibility in work practices, vision, ethics and expectations.

Achieving this requires clear communication and leadership, but it also requires putting in the groundwork before the deal is completed to ensure that both companies are aligned.

To this end, it’s essential to invest in initiatives that promote collaboration and transparency, building trust and engagement within teams – an area we continually focus on.

Prioritising the wellbeing and engagement of staff during this period is also essential to maintaining morale and productivity.

While there are, of course, challenges with any deal, M&A offers fantastic opportunities for both parties, providing access to shared knowledge, new talent, expertise, fresh perspectives and a renewed sense of purpose.

But it is also important to remember that successful integration doesn’t end at the point of acquisition – it requires an ongoing effort to nurture alignment and ensure that long-term value is realised.

John Read, managing director, WTW Networks

When it comes to acquisition, for both acquirers and vendors, alignment of culture is a critical part of the due diligence and decision-making process. It is also the most difficult criterion to judge because it is the least tangible.

Issues created by the different dynamics and sizes of acquirer and vendor, as well as a natural fear of change, are greatly exacerbated if there is no common ground from the outset – integration becomes more difficult and opposing cultures can create a toxic environment.

If the leadership team of the acquired business buys into the acquiring firm’s culture, they are key to bringing the staff along with them on the journey.

While some staff leave following acquisition, others embrace the change and integrate, seeing the opportunity that consolidation can bring.

For those that stay, new or wider roles can open up and new products and facilities can become available to their clients.

The key is for the acquiring broker to recognise that staff at the vendor know their clients best and to embrace the talent and ideas that they can bring to the wider business.

Promotions should be based on merit and skill set – not done as part of a retention strategy.

Taking the time to manage the integration properly by adapting the approach based on the type and nature of the acquired broker – as well as ensuring change, compromise and clear communications take place on both sides – is vital in the ultimate success of an acquisition.

Julie Harrison, chief people and culture officer, Allianz UK

M&A activity needs to be handled with care. It is never just about products and services, but is also about aligning culture, retaining talented employees, considering their wellbeing and nurturing future goodwill.

Change is inevitable, so having a strong employee engagement plan centred on bringing people on the M&A journey, giving them a voice to help shape the change and enabling them to connect with senior leaders is paramount.

Saying farewell to colleagues is never easy, but it can create opportunities for professional growth – either through internal promotions or by welcoming in external talent who bring fresh perspectives, experience and individual flair.

There is no denying that leaders play a pivotal role in how people feel about their work.

However, with an aligned and clearly communicated purpose, strategy and company culture, the engagement and pride employees have in their organisation extends beyond the influence of any one leader.

From an employee perspective, at Allianz, we have seen firsthand the benefits of M&A.

To give a few practical examples, consolidating office space provided opportunities to rethink our working environment and we now provide a more collaborative and inclusive space for our people to come together to deliver for customers.

We have also launched a suite of new people policies, harmonising the previous Allianz and LV= approaches, which integrate extensive feedback and benchmarking from our people on what is important to them.

It has also created an opportunity to align and expand our employee networks, boosting our fundraising power and passion for volunteering.

Crescens George, chief executive, Wiser Academy

When it comes to M&A, buying the business is the easy part – actually integrating the two is where things can quickly fall apart.

One of the most important factors, particularly for the company doing the acquiring, is how the integration is managed from a people perspective.

Too often, the focus is placed on operational efficiencies or information technology systems, which – while important – are the easier aspects of a merger to tackle. The real challenge lies in cultural integration.

This requires a clear, thought out plan before the merger or acquisition takes place, with input from both sides.

One significant challenge is that acquired employees did not choose the consolidator as their employer, which can lead to staff attrition. These exits risk depriving the organisation of valuable talent and institutional knowledge.

In my experience, this often happens when employees feel the new leadership’s vision conflicts with their own. Maybe they had planned to stay for many years, but uncertainty about their futures can prompt them to seek new opportunities elsewhere.

Addressing this requires a genuine commitment to the professional growth of all employees. This often means offering tailored development plans, access to training programmes and opportunities to gain new professional qualifications.

These types of initiative not only reinforce employees’ sense of value, making them likelier to remain for the long term, but also equip them with the skills to succeed in any new organisational structure.

Ultimately, businesses need to remember that a successful merger is not just about achieving operational efficiencies or upgrading technology. It’s about uniting people under a shared vision and creating a foundation for long-term success.