Employee Engagement

Strategies for Retaining Employees During Credit Union Mergers

August 4, 2022
November 7, 2023
Catherine Tansey
Lattice Team

While mergers and acquisitions (M&As) can represent an exciting new opportunity for growth at a credit union (CU), they usually create more fear than enthusiasm. From the executive team to the tellers, employees will wonder what their place will be in the changing organization — or if they’ll even have a job going forward. 

Employee retention almost always dips during M&As because of the uncertainty they bring. Some employees will leave before layoffs, preferring to proactively seek employment elsewhere, while others will leave after the deal is done if they’re dissatisfied with a change in their new role, manager, or team.

Credit unions tend to be employee-focused workplaces, making retention during a merger or acquisition not just important for business continuity, but also to stay true to the community-focused mission at the heart of CUs. Mergers and acquisitions are common in the CU industry today and trending upward, and it’s essential to consider the implications of M&As on your retention strategy, whether your credit union has a deal in the imminent future or not.

While you can’t stop people from leaving leading up to, during, or after a merger or acquisition, with proper planning and execution, executives, HR teams, and managers can work together to mitigate voluntary employee turnover prompted by the M&A and ensure a successful transition. Here’s how.

What Executives Need to Do During M&As

Leaders are in a difficult situation when it comes to mergers and acquisitions. On one hand, executives are responsible for ensuring the best future for the credit union, which could involve handling information that’s sensitive and confidential until the deal has been officially announced. On the other hand, good leaders know that silence and secrecy wreak havoc on employee morale and cause confusion for the workforce. Here’s what executives need to do to strike the right balance.

1. Involve the necessary people from the beginning.

“The fear of word leaking prevents many sellers from bringing key managers crucial to the people integration element into the conversation early on,” cautioned Martha Sullivan, CPA, founder and President of Provenance Hill Consulting, an exit-planning consulting firm. As a result, credit unions may not perform the proper due diligence, and “ [the leadership] team ends up ill-prepared to support their colleagues through the transition,” she added. 

Fear of a leak may prevent executives from bringing in the right people from the beginning, but leaks are nearly inevitable, said Debbie Nathanson, executive coach and HR strategic business partner and consultant. To mitigate potential damage, Nathansan recommended involving Human Resources as soon as possible. 

If HR is involved from the start, they can advise executives to consider how to manage a leak when it happens, Nathanson said, and determine what information, if any, can be shared with employees to ease their anxieties.

“The best thing executives can do is make sure they’ve pulled in the right people up front, so they can think through all the necessary pieces,” Nathanson said. For CUs, this means also making sure the technology teams are involved early on to plan for the complex online banking systems integrations that will need to take place to ensure business continuity.

2. Think about culture early on.

Culture can be an afterthought that takes a backseat to seemingly more pressing matters during M&As, like the deal’s structure, necessary due diligence, and bidding and negotiating — even in a people-centric organization like a credit union. But without a plan to merge two cultures in addition to the rest of the organizations, credit unions may struggle with retention after the deal is complete. 

The cultural aspect of merging two credit unions can vary in difficulty and complexity, but regardless of how seamlessly the cultures of the two organizations fit together, it’s crucial to think about culture — the similarities, differences, and priorities — from the start, and build that into the M&A process. This is especially true given the trend of credit unions acquiring banks, which tend to have different values than CUs.

One way to do so is to survey employees at both credit unions to find out what the most important and emblematic features of their credit union are. To avoid arousing concern or confusion, the survey can simply be framed as a pulse survey on culture, or as part of a longer engagement survey. Executive teams can work with HR to conduct the survey and build a plan to merge cultures with this information in mind — another reason HR should be involved in the M&A process as early as possible.

3. Share what you can and be authentic.

Within the confines of what’s legal and permitted, the leadership team should share information when they can to keep employees from assuming the worst-case scenario, which is common when there’s a lack of information. “Be as transparent as you can be, so [employees] know what they’re dealing with. Or at least tell them you don’t yet know,” advised Nathanson.

Telling employees that there’s information you don’t know or aren’t yet able to share might be frustrating to them, but ultimately, that honesty and transparency will build trust. “Nobody believes that nothing will change, so strike the right balance in tone and message to offer calm and meaningful information about what the future holds,” Sullivan said.

What HR Teams Need to Do During M&As

As the people center of an organization, Human Resources is tasked with a lot of responsibilities during M&As. They’re likely to be in charge of drawing up new roles, retention agreements, effective communication strategies, and plans for ensuring business continuity, all while navigating their own uncertainties about what the future holds. Here’s what HR teams need to keep top-of-mind during mergers and acquisitions. 

1. Offer stay bonuses to key talent.

Voluntary turnover rises during periods of uncertainty, like M&As. Sometimes this looks like a mass exodus, but more commonly it’s an elongated period of attrition. “[Increased employee turnover] is normally a cycle, not a one-off event,” said Lori Scherwin, executive coach and founder of Strategize That, a New York City-based leadership consulting firm.

Employees also understand that layoffs don’t always happen all at once. “Often organizations make the M&A announcement, then spend three to six months figuring out who will be asked to stay and whose role is redundant,” Nathanson said. Employees may get nervous waiting to see if they’ll be asked to stay, and instead leave by their own volition — which is exactly why you need stay bonuses. 

Stay or retention bonuses are part of a retention agreement offered to those in critical roles for staying at the company through the transition period, which, said Nathansan, is typically between six months to one year. If an employee who receives a stay bonus leaves ahead of the timeframe they’ve committed to, they won’t get the bonus, or they’ll have to pay back the portion they’ve already received.  

“For the people you want or need to stay, it’s essential that you offer them a stay bonus to ensure they stay on during [the] period of upheaval and uncertainty,” Nathansan said. 

2. Monitor ongoing employee engagement. 

Expansion into a new market through a merger or acquisition is bound to create some stress. This is especially true for the team of employees being acquired. What’s more, many employees may still be working remotely or in a hybrid arrangement, meaning they get less face time with their new manager, teammates, or organization as a whole, making it harder to feel engaged in their new role. 

Credit unions, community-focused by nature, tend to pride themselves on being great places to work. When merging, acquiring, or expanding into new markets, it’s essential for HR to keep a pulse on employee engagement, monitor employees’ adjustment, and incorporate feedback when needed in order to retain a positive employee experience

Surveys can be a great way to collect and track feedback over time. A platform like Lattice, which serves as a single, centralized hub for surveying employees and accessing feedback, gives credit union HR teams the data they need to develop and implement strategies to address any employee concerns about the transition. 

3. Accept that some voluntary turnover will occur.

Despite HR’s best efforts, it’s likely that voluntary turnover will increase during an M&A. Employees may resign even after layoffs are complete, or wait out the stipulation of their stay bonus and then leave immediately after that.

“The best way to [prepare] for this is first to acknowledge that it’s more likely than not to happen,” advised Scherwin. “If you are expecting turnover, it won’t be as painful when it happens.” 

What Managers Need to Do During M&As

As the liaison between leadership and employees, managers are in a difficult position during M&As. Fielding questions and concerns from employees while trying to keep teams focused on day-to-day operations — and managing their own concerns about the looming organizational changes — is no easy task. Here’s how managers can help this process go smoothly, for themselves and their teams.

1. Communicate directly without revealing too much information.

As Nathanson said, news of a merger or acquisition almost always leaks before the official announcement is made. This can make it difficult for managers, who are trying to be transparent with their teams without disclosing sensitive or confidential information.

“As a leader, you need to be honest while mindfully towing the company line,” Scherwin said. “It’s okay to tell your team that you know change is coming, but don’t yet know the specifics.” 

While it may be tempting to deny employee suspicions to keep the peace, it’s best to communicate — even if that means saying you don’t know or can’t share more. Saying something is better than saying nothing when it comes to allaying employees’ worries and fears.

2. Empathize but don’t complain. 

Managers are likely feeling anxious about what the M&A means for their own job security, role responsibilities, career growth, team make-up, and more, but they have to remain a calm and clear-headed leader despite their own concerns. 

“The thoughts you’re having [as a manager] are the same thoughts your team members are having — but they are looking up to you to provide support,” Scherwin said. “Listen to their concerns and actively develop solutions. Don’t let your own fears get in the way of coaching and developing your people.”  

Allow team members to vent to you but avoid joining in, she advised. Instead, redirect the conversation to the potential positives of the situation, like the opportunity to develop new skills and experience. 

3. Talk to the employees you want to stay — especially any new team members.

For managers, a merger or acquisition may mean having new team members from an acquired company. If that’s the case, it’s imperative to reach out to new employees as soon as possible after the announcement is made. 

If it’s not feasible to do so in person, a phone or video call is more personal than an email. Nathanson recommended saying something along the lines of, “I’m hearing wonderful things about you. We’re really hoping you’ll stay, we have a job for you. Please stay and work this out with me.”

This personal outreach is bound to carry more significance than hearing from HR that the employee still has a job after the deal is done. What’s more, this initial contact is an opportunity for a positive interaction as the manager-employee pair begins their new relationship. 


For credit union executives, HR professionals, and managers leading through the uncertainty of an M&A while hoping to support retention, it helps to be prepared when it comes to the people side of things. While each will be responsible for different tasks, all will benefit from communicating effectively and sharing as transparently as possible to ensure a smooth transition — and a happy workforce. 

Mergers and acquisitions at credit unions can be chaotic times that require executives, HR professionals, and managers to remain focused on the tasks needed to usher the deal through. As you do due diligence, meet with board members, and iron out the details of the deal, it’s essential to also prioritize the people who have made your credit union a success so far — and will help shape its future success after the M&A is complete.