Insights & News

Looking to acquihire: why people buy people

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It might look like a spelling mistake, but ‘acquihire’ is one of those neat, clever words that sums up an interesting phenomenon. 

Essentially, it means the act of buying up a company purely for the skills and expertise of staff, rather than its products or services. It’s common in California’s silicon valley, where larger tech companies have found it more cost-effective to hire talented employees en masse than headhunt individuals. 

In these cases, the staff are the business.

The practice raises an interesting point about cultural fit between companies, and the value of your employees. We’ve spoken to two very different clients this week, both of whom have seen talented staff headhunted for more pay at a bigger company, only to return within a year. It wasn’t that they couldn’t cut it – it’s that they preferred the culture and environment at the smaller company.

Working for a big corporate has its benefits, but it’s not for everyone. Just like entrepreneurs and business owners, many employees prefer working in smaller, agile organisations – working on exciting new projects, identifying opportunities. It’s often said that smaller companies typically offer employees greater freedom to innovate.  Attrition rates are typically low at successful SMEs, where staff feel close to the company’s leadership, and loyal to the cause.

And that’s why they’re so good at their jobs, and so highly prized externally.

BCMS staff – many of whom have worked for major listed organisations and big-brand corporates – understand that cultural fit is a critical factor in any business sale transaction. It’s why we put every effort not just into finding any buyer for our clients, but finding the right buyer for our clients. 

Selling a business is not simply transactional. You’d be surprised how often our clients turn down larger offers from prospective buyers because the deal didn’t feel right for their staff. And it’s not just ‘acqui-hirers’ who value a business based on the talented people in it.

Dave Rebbettes's picture
Posted Jul 2015
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