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Don’t Buy the Company…Recruit Its Employees Instead
Posted By Dr. John Sullivan On June 23, 2008 @ 4:27 am In Advice and How-Tos,News and Features | 4 Comments
Microsoft has a clever strategy to recruit away Yahoo! employees. For the most part, Microsoft has successfully relied on its strong employment brand and near-boundless opportunities to attract the best and brightest as opposed to seeking them out.
That is, until recently, when Microsoft raised the level of its recruiting aggressiveness to the point where it would have to be rated an “A” on the aggressiveness scale.
The first indication came prior to the initial merger offer to Yahoo, when its central sourcing team directly emailed recruiting messages to Yahoo engineers, playing on their concerns about Yahoo’s future. Just last week, they ran a full-page color ad in the paper announcing in bold type…“Microsoft has search jobs in the valley ”.
There is no secret who the ad was intended for, despite daily defections from Yahoo there is still some top-notch talent inside the company that the competition would love to poach. No subtlety here!
In nearly every industry, talent is the primary driver of both a firm’s capability and its capacity to perform. For firms that are growing, either holistically or through industry consolidation/expansion, there are really only three options to ensure access to talent.
Some companies opt to build or develop talent; unfortunately, development is often a “slow” option that provides mediocre results in a fast-changing world.
A second option, growth through mergers and acquisitions, allows the firm to increase its capabilities relatively rapidly as a result of “buying” or merging with a major competitor. It is one of the most common and fundamentally sound business strategies available, and one in constant use around the world. However, M&A is expensive, and often leads to defections of the very key talent you have liked to have retained. Mergers and acquisitions can be hostile or tame, something we have witnessed with Microsoft’s attempt to acquire in recent months.
When M&A doesn’t work, companies have yet another option, one that is less complex, less time-consuming, and much less expensive. This option is to poach away most, if not all, of the talent that provides the competition with its capacity to exist, something Microsoft is obviously doing in a very public way.
The “Plan B” poaching strategy that firms should consider a feasible alternative to mergers and acquisitions focuses on using strong recruiting approaches to directly “poach away” the target firm’s key employees. This effectively gives you access to all of the capability that produced their intellectual capital without the internal drama that led to the competitor’s chaotic state.
I call this recruiting-based alternative to mergers the “neutron bomb” strategy, because much like the military’s neutron bomb after detonation, “the buildings” are left intact but the people are gone. (Yes it’s the same neutron bomb metaphor that earned Jack Welch the former CEO of GE, his nickname “Neutron Jack.”)
Microsoft not so subtly revealed its new recruiting emphasis by running a full-page color ad last week in the San Jose Mercury News  (the key newspaper of the Silicon Valley). While it’s generally true that employed engineers don’t read newspaper career sections when they’re looking for a job, the act of placing a full-page ad garners buzz on the Internet, blogs, and social networks.
In that ad, Microsoft made it clear that it was investing heavily in search technology (the strong-suit of competitor Yahoo) and that it wanted to grow employment in that area. It also noted that it currently has over 2,000 employees in the Silicon Valley, thus indicating to potential Yahoo employees that relocation wouldn’t be necessary.
If you have enough courage and a strong recruiting function, there are many advantages associated with implementing a “neutron” recruiting strategy in lieu of buying a competitor:
Unfortunately, HR and talent management are seldom brought into a merger or acquisition situation until after the deal is already done. Even then, their primary role is just to smooth the transition into a single firm.
However, there is a role for talent management prior to the decision to even begin M&A activity. That role is to offer senior management the option of achieving almost the same results (gaining a large volume of quality, trained talent quickly) without the associated complexity and costs related to mergers and acquisitions.
In my experience, not very many Directors of Talent Management or Chief Talent Officers have had the courage to step forward and intervene before major merger plans are underway. However, because M&A activity is continually increasing, even in our troubled economy, now might be the time to make an exception and to propose the “neutron” recruiting option as Plan B.
Recruiting talent is a business function, and business activities get branded as hostile or aggressive all the time without the negative connotations that are often associated with aggressive or hostile recruiting. As global competition heats up and the balance of global economic power shifts away from the United States, recruiters are going to have to get over their personal objections and embrace business realities.
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URL to article: http://www.ere.net/2008/06/23/don%e2%80%99t-buy-the-company%e2%80%a6recruit-its-employees-instead/
URLs in this post:
 Microsoft has search jobs in the valley: http://kara.allthingsd.com/20080618/dear-disgruntled-yahoos-microsoft-is-hiring/
 Image: http://www.ere.net/wp-content/uploads/2008/06/msftvalley.jpg
 San Jose Mercury News: http://www.mercurynews.com/
 Image: http://2014fall.ererecruitingconference.com/speakers/130?utm_campaign=ERE2014RCEF&utm_source=ere&utm_medium=related+content&utm_content=Dr.+John+Sullivan
 How One Single Action, Tracking Quality Of Hire, Can Dramatically Improve Your Talent Acquisition Results: http://2014fall.ererecruitingconference.com/agenda/session-descriptions/?utm_campaign=ERE2014RCEF&utm_source=ere&utm_medium=related+content&utm_content=author#session-1125
 ERE Recruiting Conference & Expo 2014 Fall: http://2014fall.ererecruitingconference.com?utm_campaign=ERE2014RCEF&utm_source=ere&utm_medium=related+content&utm_content=Dr.+John+Sullivan
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