Have you ever wondered why companies like Yahoo, Google, Apple, Facebook and Twitter are seemingly able to easily attract their industry’s top talent in droves, while your organization may be struggling to acquire any kind of talent? It’s how they deal with their talent acquisition pipeline.
In truth these companies are constantly waging a war to achieve their talent goals and they spend an inordinate amount of time upfront assessing the market. Consequently, they do some interesting things in order to hire talent, which you may not even be aware of. The aim of this article is to introduce you to some of these strategies and let you know how an executive search firm can help you out.
One of the most aggressive strategies employed by top companies for recruiting talent is the acqui-hire. Just like it sounds this strategy involves acquiring start-ups by established organizations. The technology industry has practiced this for decades now. The acquisition may not be just for a company’s products, but also to quickly get hold of an entire team of talented employees before a competitor.
Marissa Mayer, Yahoo! CEO, is open about the acqui-hire strategy that she employs to recruit talent. Mark Zuckerberg, Facebook CEO, himself has said that Facebook buys companies to get talented workers. I’ve had two of my aqui-hiring suggestions acted on by clients. Both were very successful and all staff participated.
This hiring strategy was originated by large tech firms, but Cloud technology has made it possible for all organizations to access, integrate and hire talent globally. This is because many of the startups have discarded the brick-and-mortar set up to make use of the cloud environment and eliminate investments on relocating employees, upgrading technology infrastructure in order to acquire skilled people. IBM is particularly adept at this as are several venture capital firms.
As a strategy, Acqui-hire is not for you if you’re a faint-hearted person. A slightly less aggressive strategy, compared to aqui-hiring, is the lift-out strategy. I’ve orchestrated several of these during my tenure as a headhunter. A ‘Lift-out’ involves the recruitment of an intact team rather than acquiring the entire organization. This strategy potentially delivers all the benefits that the acqui-hiring strategy provides without either the expense or aggression associated with aqui-hiring.
A guy I know really well had his first lift-out experience in the late 80’s as I recall. When he reallocated a complete accounting department, sans CFO, for a real-estate developer. His client needed to be up and running fast or risk losing a $100 million deal. Apparently the CFO at another company had a reputation for paying above market salaries because he was known to be ‘nasty!!!’, on the best of days. Separating the team came down to transparency about who the Newco was and who they would be working for but little else during the courting ritual. Interestingly none of the six candidates ‘targeted’ knew about the others until they all had dinner Friday evening after resigning using an identical resignation letter the same afternoon.
Another well known example – in the recruiting community – involved a large telecommunications company hit by an R&D project designed to reallocate about 100 sales people nationally… the company missed its projections two quarters in a row and was sold off to another international competitor.
7-Steps to executing a successful Lift-out project
Research shows that great performers who move, along with their team, are successful faster in the new company, compared with those who move alone or are ‘assembled’ as part of new group, because the team already works as a ‘unit’ and they don’t need to get to get acquainted or make the group dynamics work.
Here are the seven key steps that every company should take when implementing a lift-out:
- Ensure that the prevailing market conditions support the addition of a complete team.
- Be transparent where possible ahead of the change (after you’ve secured the team though – no heads-up ahead of time). Make the goals of the move clear to employees and new hires through honest open dialogue post event.
- Examine client loyalty pre-event. Clients may be more loyal to ‘firms’ than the team that leaves. A recent confidential survey for a client, the pre-event, revealed that the targeted lift-out team’s customer base were split 60/40 in favor of staying with the firm.
- Is it solely to gain high profile clients? Make sure to ascertain whether current employees and the lift-out group are culturally compatibility – move forward knowingly. (Mixing oil & vinegar makes for some interesting displays, however, vodka and Red Bull .. not so good!)
- Provide the team leader with access to resources as well as management of your company. This is to ensure a seamless transition.
- It is critical to make the newly hired team feel they’re wanted. When the team is announced you need to get them together with their colleagues in a social setting
- Integration becomes complete and inseparable once the new team establishes its’ credibility, out to others to build relationships. Intervene where natural to help with the bonding process.
When a lift-out is planned and executed well, the expertise and experience of the group will give a boost to your company’s bottom line almost immediately. However, irrespective of how a lift-out is executed, it is a disruptive and destructive event that a client has to face. Therefore, the services of an executive search firm will be of immense help in implementing a lift-out. Such a firm would be well versed in handling legal issues that are likely to arise when attempting a lift-out.
Protecting yourself against a Lift-out
As far as companies are concerned, it pays to periodically review the contractual obligations that have been placed on employees, diversify risk by spreading customer relationship responsibilities to multiple employees, establish a contingency plan to deal with a lift-out, identify as well as protect trade secrets and confidential information and constantly monitor employees who access confidential information in order to reduce the chances of a lift-out.
On the other hand, the aspects to be considered when responding to a lift-out could include quick action; mapping out a legal strategy; collecting, preserving and analyzing evidence related to the conspiracy; developing a factual narrative; and differentiating legal issues from business issues.