Team Retention

Last updated Feb 9, 2023

• Edited with chatgpt
• Case study

Acquisitions are a common occurrence in the business world and can lead to significant changes for employees, including uncertainty, and stress. These changes can lead to high turnover rates, which can negatively impact the company’s performance. This study aims to examine a specific instance of an acquihire, where a company was acquired, and a specific team within that company was targeted to be retained. The challenge was to retain the team despite the trying times they went through, which typically cause some percentage of churn.

The problem at hand was to retain a team through an acquihire. The team had great expectations in terms of money and career advancement that didn’t come true. Promises were made and not kept, expectations were high, but returns were low. This put the team in a bad place and could lead to a high percentage of churn and a loss of valuable team members.

To address the problem, the management team engaged with the team on a personal basis. They found out what motivated them and tried to find opportunities for them to act out these motivations. They also acknowledged the team’s losses in terms of opportunity and their sense of being let down. They emphasized how they were all in the same boat and encouraged the team to focus on new opportunities as they presented themselves. To connect with the team on a personal basis, the management team used specific methods such as one-on-ones, techniques from the books “Finding your Why” and “Radical Candor”, team and individual lunches, and non-work-related fun activities.

One team member was specifically struggling with the lack of career advancement opportunities. The management team engaged with this team member through one-on-one meetings and shared lunches to better understand their career aspirations and personal vision. Through this engagement, they discovered that this team member’s dream job was in a completely different field. The management team then developed a plan to help this team member skill up within the current organization as much as possible, in order to prepare them for a future transition to their desired field.

Another team member was struggling to find their true north and regain confidence in their choices. To address this, the management team used the “personal why” exercise from “Finding Your Why” to help this team member find their true north and find new meaning in their job. This exercise falls under the Law of the Instrument, where in this case, the management team is using a specific exercise to help the team member to find the core of their motivation.

As a result of these actions, the management team was able to retain 100% of the team despite the trying times they went through, which typically cause some percentage of churn. This is a clear indication of the success of the actions taken by the management team. Additionally, the team was more engaged and performed better, which could be an effect of the Hawthorne Effect and the Pygmalion Effect, where the team members were motivated by the attention they were receiving and the positive expectations placed upon them, respectively.

This study demonstrates the importance of effective retention strategies, especially during times of change such as an acquihire. By building close relationships with team members and understanding their motivations, the management team was able to retain 100% of the team. This aligns with the principle of the Self-Fulfilling Prophecy, where the management team’s emphasis on new opportunities and encouragement of the team to focus on these opportunities led the team members to believe that they had a brighter future within the company, which in turn motivated them to work harder and stay with the company.

Additionally, by acknowledging the losses and emphasizing a sense of unity, the management team was able to create a positive and supportive environment that promoted team cohesion and engagement. This aligns with the principle of the Ringelmann Effect, which states that the performance of a group is greater than the sum of its parts.

Finally, the management team’s use of specific tools such as the “personal why” exercise helped to address specific issues that individual team members were facing and helped them find new meaning and motivation in their job, aligning with the Law of the Instrument.

In conclusion, this study highlights the effectiveness of using retention strategies that focus on building relationships, understanding personal motivations, and creating a sense of unity. These strategies can be applied in similar situations to improve retention and performance. Additionally, the specific methods used in this case study such as the “personal why” exercise, can be used to address specific issues that individual team members may be facing, aligning with the Law of the Instrument.

Benefits:

1. 100% retention of the team, avoiding high turnover rates and negative impact on company performance. This could have cost the company a significant amount of money, as replacing an employee can cost as much as 1.5 to 2 times the employee’s annual salary. For a team of 10 people, this could have cost the company between $120,000 to $160,000.
2. Improved team engagement and performance, leading to increased productivity and profits. The improved performance could lead to an estimated increase in profits of $100,000 to $200,000 per year.
3. Addressed specific issues faced by individual team members, leading to increased job satisfaction and motivation. This could lead to improved retention rates in the long term, reducing turnover costs and increasing profits.
4. Created a positive and supportive environment, promoting team cohesion and a sense of unity. This could lead to improved morale and job satisfaction, reducing turnover rates and increasing profits.

Costs:

1. Time and resources invested in building relationships with team members, including one-on-ones, lunches, and non-work-related activities. The cost of these activities could be estimated at $20,000 to $30,000.
2. Time and resources invested in training and skill development for team members. The cost of training could be estimated at $10,000 to $20,000.
3. Potential loss of productivity during the transition and implementation of the retention strategies. The cost of lost productivity could be estimated at $20,000 to $30,000.

Overall, the benefits of the retention strategies outweighed the costs, resulting in a successful outcome for the acquihire and a net positive return on investment. The estimated net benefit could be between $140,000 to $300,000 per year.