Across all industries, many HR leaders are struggling to recruit skilled tech employees and developers. Software engineers are listed as the fourth most in-demand job right now, and experts predict that the role will see 19% growth by 2024. As a result, companies are doing everything they can to attract these workers away from the competition — and they’re getting pretty creative.
One trend in particular is on the rise: “acquihiring.” That’s the process of acquiring an entire company with the main objective of gaining its skilled employees. According to a survey we conducted with Mergermarket, 38% of corporate executives say they’ve acquired a software company for its talent in the last five years.
As the tech talent gap widens in the coming years, it’s likely that this rate will rise even higher. But is it easier to acquire a whole organization instead of recruiting individual developers and tech professionals?
In many cases, yes. There are a number of causes for this trend. For one, enterprises that are launching large-scale tech initiatives like new websites, internal programs or applications often need entire teams of developers at once. Considering that these employees have already invested time developing internal processes and are accustomed to working with one another, the acquirer saves time and money they would’ve spent individually training each new employee and adjusting processes.On top of that, these employees were likely present for the conception and development stages of their technology, and therefore know its ins and outs. So, they are able to provide support for their product when issues arise, which cuts research and IT costs in the long-run. Lastly, on a broader scale, it’s important to recognize that skilled technologists likely receive a number of compelling opportunities and offers from other companies. By acquihiring, companies can sidestep the competition to secure talent.
With these factors in mind, it’s no surprise that companies in the process of their own digital transformations are executing strategic acquisitions as a way to recruit technologists. But whenever a company buys another primarily to gain its employees, HR leaders face a unique set of challenges. Here are four strategies HR professionals should keep in mind during this transition.