systematicHR

There are many reasons companies buy or merge with other companies.  Sometimes, you just want more market share and it’s easier to buy it that to grow organically.  Other times you want to acquire products or expand into new market segments that your current product mix does not represent.  More and more however, I think we’re going to see acquisitions that (in part) look for high caliber talent.

Everyone is sick of me talking about the death of talent and how terrible the next few decades will be.  (Although I’m not entirely sure I believe it).  If the looming talent shortage is real though, it’s going to start making sense to ensure that acquisition targets have great talent to make it worth the investment.

Let’s take a look at the Oracle/PeopleSoft deal.  If you were to ask me for a prediction before the deal, I would have told you that in 6 months, you’d have all the PeopleSoft employees roaming the streets looking for a job.  Many would have been displaced by Oracle, others would have left of their own accord because the PeopleSoft and Oracle brands were too incompatible.  Let’s face it, getting acquired by a fierce competitor is hard on employees.  Interestingly enough, Ellison apparently had a talent strategy in place.  A couple years after the acquisition when you’d expect few remaining PeopleSoft employees, you have huge amounts of PeopleSoft talent working for Oracle in several areas (where Oracle clearly didn’t have the same level of expertise – read HR functionality).  While Oracle needed the market share to compete with SAP, and they also needed the new product direction in Fusion, the acquisition clearly targeted talent shortcomings in their existing organization.

I’m certainly not saying that anyone is going to acquire a company purely for talent.  If there isn’t product or market to be gained by it, getting your talent through acquisition doesn’t make much sense.  However, talent will become a larger and larger component in the valuation of acquisition candidates.