When IPOs go well, employees can get rich. How does HR retain them?

The minting of new millionaires is a well-known phenomenon among some startups with IPO ambitions. If an employee gets in on the ground floor of a new business and amasses equity grants in the company over time, they could come into an enormous amount of wealth quickly when said company debuts on the stock market.

This isn’t the case for all IPOs, but it certainly was when SpaceX went public earlier this year. When Anthropic has its IPO in mid-November, some 3,000 employees are set to become multimillionaires, according to an analysis cited by the Washington Post from Hill.com, a platform tracking private market transactions. Another 1,200 employees will likely become deca-millionaires, while 50 early employees could become centimillionaires (Anthropic has 5,300 employees total, per an S-1 filed ahead of its IPO).

“Depending upon when you joined an organization, you could be coming into life-changing wealth,” Lauren Tropeano, chief people officer at Docebo, an AI-enabled learning management system, explained.

What motivates employees to keep working after they become millionaires (or better) overnight? HR leaders, analysts, and consultants told us about the strategies they use to retain top talent amid an IPO, from offering additional compensation to new opportunities.

Start early. Some HR teams start thinking about retention well before their organizations list on the stock market, sources told us.

This is the case at Deel, an HR tech platform with ambitions to go public. “When you go public, your equity is not just a thought in your brain. It’s like a number, right? You see it, you’re like, ‘we can do something with this,’” Nadia Alaee, senior director for HR business partners and people programs, said.

Alaee said Deel’s HR business partners are currently focused on identifying “key players” among the company’s leadership, and what succession looks like for people in those critical roles. Deel’s people team built an “attrition risk modeler” that analyzes employees’ likelihood of leaving the company, based on factors like their time in the role, last promotion, and where compensation falls within their salary band.

From here, Alaee and her colleagues can consider ways to motivate and engage critical talent. She said the goal is to be thoughtful about the programs they build over the next year or two, considering how career development, internal mobility, and compensation can all affect an employee’s propensity to stay with the company.

More money can’t hurt. Even if workers stand to make a lot of money off an IPO, additional pay can still play a role in incentivizing them to stay on after the event, sources told us.

Companies may offer employees a one-time equity grant at the time of the IPO as a thank you for getting them to this milestone event, or provide annual grants thereafter, Gregory Kopp, managing director for advisory at KPMG US, said. As a public company, employers can also roll out employee stock purchase plans (ESPP), “so that employees have the ability to purchase stock at a discount in fair market value,” he noted.

Retention strategies will look different depending on the employee, Tropeano said. Employees who come into life-changing wealth may zero in on pursuing opportunities that are “purposeful and meaningful” in their careers, and choose to focus on their “professional legacy” through avenues such as thought leadership or writing books. Others, who come into new—but not life-changing—wealth, may still respond to more traditional retention strategies, such as additional stock option grants.

While money can prove critical to retaining talent, “it’s not the end all, be all when you get into these IPO situations,” Kim Seals, a senior partner with consulting firm West Monroe’s people and change practice, said. A chief operations officer, for example, might wonder if they’re in the succession slate to become CEO one day.

“If my desire is that, you know, what does my future career path look like? What are the opportunities for me to continue to expand my role, to grow in this role?” Seals said.