Aggressive Recruiting: Acquiring the Talent and Avoiding the Buildings

There is a very interesting article today on ere.net, written by Dr. John Sullivan, regarding aggressive recruiting as an alternative to a merger and acquisition. His point is an excellent one if what you are seeking in the M&A is the talent of the target organization. He calls this the "neutron bomb" approach, where you take all the talent and leave the buildings standing. He cites Microsoft's recruiting campaign for Yahoo employees as an example of this approach. Microsoft could not get Yahoo and its search capabilities by purchasing the company so now they are aggressively trying to woo away Yahoo employees with this background.

In a traditional M&A you get all the "assets" of the organization and also all the liabilities. One of these liabilities is all the poor performing employees the target organization had. Also in a traditional M&A you have all the regulatory stuff you have to deal with, during which time all the talented people you wanted may have jumped ship. So his solution is that if you want the talent go for the talent and skip the rest of it.

One point he mentions that will stand in the way of getting this done is the lack of aggressiveness many HR recruiters have. Historically, to directly poach another company's employees was a no-no. Companies would use third party recruiters, and hence pay a big fee, to have the recruiter go after the talent wanted. Sullivan says that HR needs to get over that roadblock and face business realities about capturing the talent needed. I have seen this before as well. However, I think it may not be exclusive to HR. I have had company managment direct HR to be careful in recruiting because of some relationship between the CEO's.

Obviously this does not apply if the purpose of your M&A is the actual buildings and equipment. In some situations, as in heavily unionized facilities, you take particular pains NOT to acquire the people in the transaction. But even in that situation, there may be talented people in your target that you may want to try and recruit before you go after the company. HOWEVER, one very large roadblock to this PROACTIVE step occurring is that HR usually only gets involved in M&A AFTER the fact and not before. Another reason to have that "place at the table".