Posted in Human Resources Articles, Total Reads: 1785
, Published on 17 November 2013
Microsoft acquiring Nokia is the buzzword of the global economy and so is the Verizon-Vodafone deal. These are industry giants acquiring others and strengthening their businesses. Ever wondered why a technical giant goes forward to buy a firm with low profits and an unrelated product line? The answer to this Acqui-hiring where huge businesses buy startups to get innovators and game changers which are usually referred to as “Purple Squirrels”. They are the out-of box thinkers of the organization.
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Acqui-hiring (Acquisition hiring) is a more strategic and bold hiring strategy as it enables hiring of teams at the same time. This saves the organization the trouble of developing team collaboration and ensuring co-operation. Another positive of this hiring strategy is that the organization which acquires gets already trained and top performance employees. This is because these employees having worked with a startup are willing to put on long hours with comparatively less exhaustive resources. A cherry on the cake is that the organization gets the entrepreneurial leader of the startup, his ideas and the ability to successfully lead a team. Leaders get a broader platform to spread their ideas.
But what impact does this strategy have on the acquired firm and its employees? For a firm which is a startup, being acquired by a massive market player is an acceptable goal as it gives a sense to the firm that is the best amongst the lot of the startups. For the purple squirrels, advantages of having a better brand name associated and well-designed compensation packages as well as stock-options are motivating enough to retain them for a long time in the new cultural environment.
With Google being the king of acqui-hires and Yahoo’s Marissa Mayer treading its footsteps, the hiring strategy also has a flip side to it. Companies like Apple faced problems when it used this strategy to acquire the mapmaking talent of another firm. Despite of being a strategically sound hiring technique, it still requires industry giants to weigh certain aspects before implementing acqui-hiring. Organization needs to assess the delay and recruiting costs involved in acquiring the quantity and quality of talent through traditional recruiting channels. It also becomes necessary for the acquirer to identify and assess the talent quality of each of the potential acqui-hires and then take a call. Another major implication of acqui-hiring is that it kills other recruitment strategies as the potentials employees feel that even if they get selected, they would be a cultural misfit in the organization due to the already existing teams.
Despite of the all the above mentioned issues, acqui-hiring is one of the most spoken things in the mergers & acquisitions domain of the market. A senior management employee of Facebook recently said, “No one bought a company for the company itself, but for the excellent people that it has.”