How to keep your best employees from walking

The fastest way to tank a newly acquired business is losing your key people.

If you want the business to run without you (and you should), keeping top talent is non-negotiable.

Today I’ll show you three strategies to lock in your most valuable employees from day one.

Strategy #1 - Offer Real Equity

If someone is truly irreplaceable (they run daily operations, command respect from the team, and keep customers happy), give them ownership.

Even 3-5% equity can completely change someone’s relationship to the business.

They stop thinking like an employee and start thinking like an owner.

One of my students bought an auto body shop with two managers essentially running everything, and he gave each of them 5% equity immediately.

Neither had ever been offered ownership before.

They instantly became much more loyal and had a mindset shift from “this is my job” to “this is my business.”

Strategy #2 - Immediate Raises And Retention Bonuses

When you take over, everyone’s watching to see what kind of owner you’ll be.

Give raises on day one if cash flow supports it (and it should if you structured the deal correctly).

Structure retention bonuses that vest after 12 months to incentivize people to stay through the transition period.

This sends a clear message that they’re better off with you as the owner than they were before.

(Inside Acquisition Ace, members learn all the best ways to retain key employees during an acquisition. To learn more about how the community can help you on your acquisition journey, book a call with our team here.)

Strategy #3 - Phantom Equity

If you don’t want to add people to your cap table or operating agreement, phantom equity accomplishes the same goal.

The employee gets treated like an owner for compensation purposes (they receive a percentage of profit distributions and sale proceeds) but they’re not a legal owner.

For example: 5% phantom equity means they get 5% of quarterly distributions and 5% of the sale price when you exit.

This creates owner-level incentives without the legal complexity of actual equity.

Which Strategy Is Best For You?

You don’t need all three strategies for every employee.

But for the people who keep the business running that you can’t afford to lose, use whatever combination makes sense.

The cost of losing a key employee is always higher than the cost of keeping them happy.

If you want to learn how to retain your best employees while growing your business in the Acquisition Ace community (with 2,000+ other members)…

👉 Book a call with my team to see if you’d be a good fit.

Onward,

— Ben Kelly