The retention of acquired startup talent is a significant challenge facing acquiring companies today. It is keenly felt as programming employees are among the most valued assets of many startups. The loss of these professionals post-acquisition can hence signify a substantial setback for the acquiring organization.

According to a new study using data from the U.S. Census Bureau (1990 to 2011), which covered around 230,000 acquired startup workers, there exists a significantly higher turnover rate among employees of acquired firms compared to general hires.

The advent of acquisitions as a primary channel for startup exits was also highlighted. These exits through acquisitions have increased over the last two decades, primarily because they provide entities with access to fresh talent, increased market strength, and new sources of technological advancement. Startups’ human capital, often the key driver behind their innovation and success, is highly sought after.

The study discovered prevalent scenarios detailing employee departures post-acquisition, unraveling the motives behind their decisions. It recommends several strategies to minimize the talent drain experienced by companies when they absorb startups.

Source: The Challenge of Retaining Startup Talent After an Acquisition.