What differentiates high-retention businesses
This is a brief snippet on our new findings on high retention companies. When a company is acquired it's good to keep these points in mind.
1. Specialized selection: High-retention firms are more likely than low-retention firms to target workers below the executive level with critical expertise (61% versus 47%), whereas low-retention firms are more likely to offer awards to individuals classified as high ability (33% versus23%) or high results (30 percent versus 21 percent ).
2. Early communication: Senior leaders at high-retention acquirers are required to sign before the actual signing, compared to just 11%at low-retention acquirers.
3. Standardized awards: Businesses with a high retention rate are less inclined to factor in values received at the time of selling (e.g.,equity held or accelerated stock awards) when calculating retention values.
4. Delayed vesting: High-retention acquirers are most inclined to compensate in full towards the end of the retention cycle (53% senior leadership/61% other employees), while low-retention acquirers utilize interim vesting/payment terms (35% senior leadership/39% other employees).