Towards a talent retention model: mapping the building blocks of the psychological contract to the three stages of the acquisition process

Abstract

This paper addresses a gap in the research on talent retention within the context of cross-border mergers and acquisitions (M&A). To answer our key research question: How can psychological contracts be shaped to retain talent in an M&A context? We break down the complexity of M&A by taking a process approach. Using a multiple case study methodology involving empirical data from five acquired subsidiaries, we study talent at an individual level in contrast to most studies which focus only on the organisational level. This paper extends our knowledge on the role of the building blocks of the psychological contract in talent retention post-acquisition. Our study highlights the need to reframe HR due diligence within the building blocks of the psychological contract and highlights lessons for practice in this understudied area.

Keywords:

• Mergers & acquisitions (M&A)
• talent retention
• psychological contract (PC)

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 While it is accepted that mergers and acquisitions have distinctly different legal definitions, the term M&A will be used interchangeably throughout this paper.

2 ‘agility means to strip away as much of the heaviness, commonly associated with the traditional software-development methodologies, as possible to promote quick response to changing environments, changes in user requirements, accelerated project deadlines’ (Erickson et al., 2005, p. 89).

3 The Localisation Industry Standards Association define localisation is an integral part of globalisation, and without it, other globalisation efforts are ineffective. Localisation is the process of modifying products or services to account for differences in distinct markets and addresses significant, non-textual components of products or services in addition to strict translation.