We can`t say it enough: work closely with your lawyer to make sure your deal is firm and beneficial for both parties. It is a fact that mergers and acquisitions generate a lot of revenue (30% of employees can become redundant during the process). At the same time, companies also need to make sure they retain important talent during the move, where a commitment bonus can come into play. And the first step is to establish a commitment bonus agreement that your employees can verify and sign. According to the SHRM, employers generally pay retention bonuses to dismissed employees based on the length of their work under the agreement. In your agreement, you must define exactly how redundancies work. We don`t want to provide a complete sample here, because it really, really depends on how you structure your agreement. As always, make sure your legal team reads this policy to make sure you comply with all local, state, and federal laws. SHRM states that retention bonuses are usually refunded to the organization when a person terminates under the agreement. Then you want to go straight to what is discussed in this letter: offering a retention bonus agreement. We advise you to get straight to the point: great employees are precious. If you want to encourage an employee to stay with your company, you can use an employee retention agreement. It describes the agreement between the employee and the company that the employee stays in the company for a certain period of time and receives a guaranteed commitment bonus (even though the company could be about to buy or change direction or ownership, which could ultimately result in the employee losing a job).
Ultimately, your retention bonus agreement should benefit both you and the staff you want to keep. By offering a bonus, you can entice your top talent to stay close and help you achieve your business goals after a merger or acquisition. At the same time, you reward the commitment of your employees. From there, you need to dwell on a few finer details, which respond to what happens when the person is terminated during the retention agreement. As you can see, this goes straight to the point. You need to make sure that you set up your hold bonus agreement in such a way that the person knows exactly what you are talking about above. Imagine a retention bonus agreement as pretty much the opposite of a termination agreement. While a severance pay involves payment if the employee agrees that they have been terminated fairly, the retention bonus agreement offers them a payment to stay. In this case, the first step towards writing a retention bonus agreement is to actually start writing a document in the form of a letter. This will eventually be sent to your collaborators, which means it`s a good time to complete the document as quickly as possible so you can easily fill in the gaps and ship them without much effort.