Employee retention during Cooperative banks' mergers and acquisitions

Abstract

Although mergers and acquisitions are important for an organisation's future growth, they often result in high employee turnover. Employee retention though is an essential prerequisite for achieving the projected benefits for the newly formed organisation. The paper draws empirical evidence from a study that explored critical factors in retaining key employees, since their concerns and problems often lead to voluntary turnover and merger failure. The study utilises qualitative data, collected through in-depth semi-structured interviews and focus group discussions with 55 participants from the wider environment of the Cooperative financial services sector in Cyprus. At the time of the study, the sector was undergoing dramatic changes, eventually leading to a number of previously independent Cooperative credit institutions coming under state control and ownership. The number of these institutions was reduced from more than 90 to just 18, which were subsequently merged into the Cyprus Cooperative Central Bank, which itself was sold in 2019 to a larger banking organisation.