5 Ways Recruiters Can be Tremendously Helpful During Acquisitions
January 7, 2015
Conventional wisdom says that corporate acquisitions are the exact opposite of recruiting. Rather than going through the laborious process of identifying, contacting and interviewing top candidates, with an acquisition, you simply "acquire" the talent you need to move the company forward.
In this case, conventional wisdom is dead wrong. The personnel transferred into a firm through acquisition —especially the ones who have specialized, high-demand skills—are likely to find jobs elsewhere unless they are actively recruited into your company.
Think of it this way: acquisitions are highly emotional events for the employees involved. Employees know that the acquisition may mean relocation, layoffs or changes in compensation. Getting the employees "on board," requires selling them on the idea of working for the new company.
With that in mind, here are five ways recruiters can help ensure a successful acquisition.
1. Share insights about the other company’s culture.
An acquisition entails forging a relationship that will continue long after negotiations are over. As a general rule, nobody on either the acquiring or to-be-acquired firm should make remarks or behave in ways that might later make it difficult to work together in the future.
While negotiations can be tense, anything that smacks of bluster or derision will leave a foul taste in the relationship that could linger for years.
For example, when I was on the negotiating team for Digital Equipment Corporation during an attempted acquisition of Lotus Development Corp (which IBM subsequently bought), one of the DEC executives treated Lotus's CTO like a peon, simply because the CTO was dressed casually.
If we had thought to include recruiters on the negotiating team, this spectacular deal-killing blunder might have been avoided. Since recruiters meet with workers inside the same industry but in different companies, a recruiter could have alerted the clueless DEC executive that Lotus executives dressed like engineers rather than in three-piece suits.
Put another way, recruiting is an "outward facing" corporate role. Recruiters are therefore likely to better understand the expectations of the employees in the to-be-acquired firm, which helps the good will and respect of the employees involved.
2. Help the team avoid the "landmines."
Acquisitions frequently entail changes in the "social persona" of the employees. While the employees in the acquired firm are obviously concerned about their compensation, the following issues can also take on, sometimes exaggerated, importance:
- Job titles. Some employees tie their personal identity to the job title that they hold. While the difference between "customer engineer" and "service technician" seems trivial, it may loom large in the minds of people who work in customer service.
- Location of facilities. Unless the two companies are located very close together, the prospect of having to pull up stakes and move—or else remain in a backwater—can assume overwhelming importance for executives and employees alike.
- Brand names. Some employees feel a deep personal attachment to a corporate brand or product brand. This is especially true inside companies where the employees have been involved in building the brand from the bottom up.
For example, I was once in an engineering group acquired by the French computer manufacturer Groupe Bull. Without any input from the newly acquired employees, the new management decided to name the acquired division "Bull Worldwide Information Systems."
If recruiters had been present, they might have explained to the new management that an acronym destined to be pronounced "Bull Whiz" was not the best way to elicit enthusiasm for the new structure.
While it's not always possible to align the social persona of employees with strategic decisions that must be made in the wake of an acquisition, recruiters can use their knowledge of candidate psychology to help ensure that opinions and emotion are taken into account.
3. Keep the talent well informed.
Even if the merger was negotiated in secret, employees in both firms will have heard rumors about the upcoming change. They’ll be waiting on tenterhooks, wondering whether they’ll still have a job, whether they’ll like the new management, and what they’re supposed to be doing next.
This is analogous to the drop in productivity that typically happens when a company announces layoffs or a major restructuring, except that the level of uncertainty is more toxic because there are more unknowns.
In a layoff or restructuring, employees can distract themselves from the fear of change by playing politics or speculating on who will win the ongoing turf wars. While those are not exactly productive behaviors, they do keep employees engaged and involved in the workplace.
With an acquisition or merger, though, even that unproductive work grinds to a halt while everyone updates their resumes or frets about the future. Therefore, it's an excellent idea to provide as much information as possible to the employees during each point of the acquisition.
If recruiters are on the negotiation team, they can use that inside knowledge to prepare top employees for the change. Just as they normally recruit talent from the outside, they can use those skills to recruit inside talent.
4. Help create the orientation guide.
To ensure that the acquisition goes smoothly, employees should receive a comprehensive orientation guide as soon as the acquisition is officially announced. This guide should provide a thorough introduction to the new corporate identity, answer most of the rational questions that people likely have, and help employees cope with the inevitable emotional challenges. Here's a sample outline:
- Company history, goals and culture
- Corporate challenges and goals
- Strategic reasoning behind the merger
- Expectations and measurements of success
- Organizational challenges and goals
- Current organizational structure
- Direct reports and lines of authority
- Current “unknowns” and what remains to be done
- Likely opportunities to assist the organization
- Likely opportunities for career improvement
- Corporate policies and procedures
- Where to get questions answered
A recruiter's perspective is essential for items 1, 9 and 10 particularly because those sections, in essence, recruit the existing employees by describing the benefits of the newly merged company.
5. Help plan the announcement celebration.
A completed acquisition is an important event for all concerned. It’s therefore appropriate to hold some sort of celebration to mark (and to market) the signing of the contract. To create positive excitement, an acquisition celebration should be upscale and upbeat, more like a wedding than a business meeting.
Botching the announcement can exact a high price. For example, when the now-defunct networking hardware firm Cabletron acquired Standard Microsystems, the "announcement celebration" consisted of sending a bus to take the new employees to a party where they'd meet their peers at Cabletron.
Once the bus had left, however, the employees who remained were told to pack up and leave, because they didn’t have jobs. When the employees on the bus found out how the layoff had been handled, many of the most valuable quit in disgust.
It's hard to believe that Cabletron would have made such a bonehead move had recruiters been involved in the acquisition. Because they often recruit from other companies, recruiters understand the social bonds that exist between employees who've worked together.
As you can see, far from being an alternative to traditional recruiting, corporate acquisitions represent a huge recruiting challenge and are far more likely to be successful when professional recruiters are involved at every stage of the process.