How M&A tech can solve your skills shortage

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Short on resources? Optimize your M&A process with Dealsuite and cater to your client requests more efficiently.

With businesses facing a lack of skilled staff in the wake of the pandemic, some firms are using acquisitions to fill the gaps.

This strategy of acquihiring is particularly common in the healthcare and IT sectors, where the demand for skilled professionals is exceptionally high, but skill shortages are common across these sectors.

According to Mercer, 98% of companies have significant skills shortages, while Manpower says the global talent shortage is at a 16-year high. It reports that three-quarters of businesses worldwide are having difficulties filling vacancies. 

A skilled workforce is critical to business success. An inability to find people with the appropriate skills can have a negative effect on business performance, stifling growth and weighing on staff who are asked to do more to make up the shortfall.

With a lack of skilled staff in the job market, the normal hiring process can be painfully slow and inefficient. This has contributed to a marked increase in the number of businesses that cite talent acquisition as a reason for pursuing M&A deals.

Benefits of acquihiring

By identifying and hiring a whole team of skilled people, companies that pursue a strategy of acquihiring aim to avoid the delays and frustrations in the job market. Acquihiring also allows employers to bring in a group of people who are used to working with each other and can hit the ground running.

However, there are also potential pitfalls, as with any recruitment strategy. When talent is the motivating factor in an M&A deal, it’s important that the buyer has a clear strategy. An acquihire transaction won’t make much sense if the key individuals leave, which means that buyers need to have a plan for retaining these people.

When executed correctly, acquihiring can deliver better results than other types of hiring, including improved employee retention, an increase in employee motivation and confidence in the hiring company’s future ambitions.

Acquihiring is especially common in the tech sector. The pandemic accelerated many companies’ plans for digital transformation, creating huge demand for skilled workers who can do front-end programming, build APIs, or with expertise in databases and data science.

Similarly, interest in the healthcare sector has boomed in response to the pandemic, leading many companies to explore the possibility of adding a healthcare component to their businesses. The fastest way to achieve this is often by acquiring the talent through M&A.

The same is true in other sectors. Acquihiring can be a good way to bolt on missing industry expertise as a business seeks to expand into new areas.

Automation

Despite the benefits, the advantages of acquihiring can be difficult to achieve when conducted through traditional M&A channels. This is where platforms such as Dealsuite can make a big difference for M&A professionals who are also short on resources.

Dealsuite’s algorithm helps to improve deal-sourcing by offering an overview of relevant deals and allowing M&A professionals to contact other dealmakers more efficiently. Such tools are making acquihiring a much more effective strategy in today’s talent-squeezed environment.

Just as automation is helping M&A professionals, it’s also driving acquisitions more generally. One approach to addressing the labor shortage has been to deconstruct jobs into discrete tasks and automating tasks wherever possible — and some businesses are using M&A to buy the technology they need to automate those tasks.

Whether acquisitions are motivated by talent or technology, the ability to source deals quickly and move transactions forward efficiently is key. Optimizing your M&A process with Dealsuite allows you and your clients to use acquisitions in creative ways that may not have been possible previously.

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