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{{Short description|Process of acquiring a company to recruit its employees}} |
{{Short description|Process of acquiring a company to recruit its employees}} |
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'''Acqui-hiring''' or '''Acq-hiring''' (a [[portmanteau]] of "acquisition" and "hiring") is "the [[Mergers and acquisitions|acquisition]] of small companies primarily to gain access to their employees".{{sfn|Chatterji|2014|p=395}} |
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'''Acqui-hiring''' or '''Acq-hiring''' (a [[portmanteau]] of "acquisition" and "hiring") is [[Mergers and acquisitions|acquiring]] a company primarily to [[Recruitment|recruit]] its employees, rather than to gain control of its products or services.<ref name="Sullivan">{{cite web|url=http://www.eremedia.com/ere/acqui-hiring-a-powerful-recruiting-strategy-that-youve-never-heard-of//|title=Acqui-hiring: A Powerful Recruiting Strategy That You've Never Heard of|publisher=ERE.net|last=Sullivan|first=John|date=10 December 2012|accessdate=20 April 2013|archive-date=27 October 2016|archive-url=https://web.archive.org/web/20161027124153/https://www.eremedia.com/ere/acqui-hiring-a-powerful-recruiting-strategy-that-youve-never-heard-of/|url-status=dead}}</ref><ref name="Yarow">{{cite web|url=http://www.businessinsider.com/why-so-many-startups-are-being-acqui-hired-2012-8|title=Why So Many Startups Are Being Acqui-Hired |last=Yarow|first=Jay|date=10 August 2012|work=[[Business Insider]]|accessdate=20 April 2013}}</ref> |
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| ⚫ | Talent acquisitions can provide a relatively favorable [[exit strategy]] for employees, with the prestige of being bought by a larger company, combined with the typical process of hiring.<ref name=atd-nosense>{{cite web|title=The Vanity of the "Acqhire": Why Do a Deal That Makes No Sense?|url=http://allthingsd.com/20120810/the-vanity-of-the-acqhire-why-do-a-deal-that-makes-no-sense/|publisher=All Things D|accessdate=23 May 2013}}</ref><ref name=":0">{{Cite news|url=https://www.nytimes.com/2011/05/18/technology/18talent.html|title=In Silicon Valley, Buying Companies for Their Engineers|last=Helft|first=Miguel|date=2011-05-17|work=The New York Times|access-date=2019-04-19|language=en-US|issn=0362-4331}}</ref> A risk to talent acquisitions are employees that are not interested in working within a corporate environment — which may cause them to defect elsewhere.<ref name=":0" /> |
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==History== |
==History== |
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[[File:Acqui-hiring between 2009 and 2013.png|thumb|Acqui-hiring between 2009 and 2013]] |
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[[Ben Zimmer]] traced the derivation of the phrase to a blog post in May 2005.<ref>{{cite web|title=Buzzword Watch: "Acq-hire"|last=Zimmer, Ben|date=29 September 2010|url=http://www.visualthesaurus.com/cm/wordroutes/buzzword-watch-acq-hire/|publisher=Visual Thesaurus|accessdate=27 May 2013}}</ref> By the early 2010s, acqui-hiring had become increasingly common in [[venture capital]]-backed [[startup company|startup companies]], especially within the competitive [[technology]] sector (where skilled [[software engineer]]s working for startups were considered lucrative). By March 2013, [[Facebook]] was the largest performer of talent acquisitions, with 12 over the previous five [[Fiscal year|fiscal quarters]]. One such Facebook purchase in 2009, [[FriendFeed]], brought several high-profile [[Google]] alumni into the company, including [[Bret Taylor]] — who became Facebook's [[chief technology officer]] shortly after the purchase.<ref name=":1">{{Cite web|url=https://www.recode.net/2015/3/9/11559956/facebook-shuts-down-friendfeed|title=Facebook Officially Shuts the Door on FriendFeed|last=Wagner|first=Kurt|date=2015-03-09|website=Recode|access-date=2019-04-19}}</ref> [[Twitter]], [[Yahoo!]], and Google ranked alongside Facebook as similarly major users of talent acquisitions.<ref name=ubj-acquihire>{{cite web|title=Facebook leads growing acqui-hire craze|url=http://upstart.bizjournals.com/money/loot/2013/03/28/facebook-leads-growing-acqui-hire-craze.html?page=all|publisher=Upstart Business Journal|accessdate=23 May 2013}}</ref> |
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[[Ben Zimmer]] traced the derivation of the phrase to a blog post in May 2005.<ref>{{cite web|title=Buzzword Watch: "Acq-hire"|last=Zimmer, Ben|date=29 September 2010|url=http://www.visualthesaurus.com/cm/wordroutes/buzzword-watch-acq-hire/|publisher=Visual Thesaurus|accessdate=27 May 2013}}</ref> In the early 2010s, acqui-hiring attracted widespread media attention because of some high-profile acquisitions by large software companies such as Facebook, Twitter, and Google.{{sfn|Chatterji|2014|p=396}} It had become increasingly common in [[venture capital]]-backed [[startup company|startup companies]], especially within the competitive [[technology]] sector (where skilled [[software engineer]]s working for startups were considered lucrative). {{cn}} |
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==Examples== |
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It is difficult for researchers to determine the motivation for an acquisition if it was not reported in the media. A 2014 analysis of media reports found that Facebook, Google, Twitter, [[Zynga]], Yahoo, and [[LinkedIn]] were the most prolific acqui-hirers, and that others included [[Palantir Technologies|Palantir]], [[Airbnb]], and [[HubSpot]].{{sfn|Chatterji|2014|p=399}} |
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===Facebook=== |
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In 2010, [[Facebook]] CEO [[Mark Zuckerberg]] stated, "We have never once bought a company for the company. We buy companies for excellent people".{{sfn|Chatterji|2014|p=402}} One of Facebook's earliest acqui-hires was the seed-funded startup [[Parakey]] in 2007.{{sfn|Chatterji|2014|p=402}} |
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Chatterji separates Facebook's acqui-hires into: |
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*Strategic—to acquire the founder of the startup into a high-ranking role. Examples include [[Bret Taylor]] ([[FriendFeed]], 2009), [[Gokul Rajaram]] (Chai Labs), Sam Lessin ([[Drop.io]]), and Peter Wilson ([[Rel8tion]]), which totaled over USD$67 million.{{sfn|Chatterji|2014|p=404}} About these acquisitions, Zuckerberg stated that hiring entrepreneurs helped Facebook retain its start-up culture.{{sfn|Chatterji|2014|p=404}} |
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*Innovation—hiring to develop a new feature quickly. In 2010, Facebook bought Beluga messenger service. Within five months, it released [[Facebook Messenger]] to 750 million users.{{sfn|Chatterji|2014|p=404}} |
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*Product improvement—to enhance existing features. |
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===Google === |
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[[Google Glass]] was the product of acqui-hiring Neven Vision and DNN Research. Google obtained both [[patent]]s and expertise from the acquisition of MicroOptical Corporation.{{sfn|Chatterji|2014|pp=401-402}} |
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==Rationale== |
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| ⚫ | Talent acquisitions can provide a relatively favorable [[exit strategy]] for employees, with the prestige of being bought by a larger company, combined with the typical process of hiring.<ref name=atd-nosense>{{cite web|title=The Vanity of the "Acqhire": Why Do a Deal That Makes No Sense?|url=http://allthingsd.com/20120810/the-vanity-of-the-acqhire-why-do-a-deal-that-makes-no-sense/|publisher=All Things D|accessdate=23 May 2013}}</ref><ref name=":0">{{Cite news|url=https://www.nytimes.com/2011/05/18/technology/18talent.html|title=In Silicon Valley, Buying Companies for Their Engineers|last=Helft|first=Miguel|date=2011-05-17|work=The New York Times|access-date=2019-04-19|language=en-US|issn=0362-4331}}</ref> A risk to talent acquisitions are employees that are not interested in working within a corporate environment — which may cause them to defect elsewhere.<ref name=":0" /> |
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Although access to talented employees is one of the key factors driving the competitive advantage of companies, the best way to attract this human capital is a matter of debate.{{sfn|Chatterji|2014|p=396}} |
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==Use of acquired human capital== |
==Use of acquired human capital== |
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Typically, a company that performs a talent acquisition does not show an interest in the products and services of the target, which results in them being discontinued upon the purchase (so that their staff will focus exclusively on incorporating their knowledge into their new employer's projects) or some time afterward. The file sharing service [[Drop.io]] was shut down after its 2010 purchase by Facebook, while FriendFeed was left dormant (with no new feature development and a slowly shrinking user base) until 2015, when it was discontinued.<ref name=":1" /><ref name=":0" /><ref>{{Cite web|url=https://mashable.com/2010/10/29/facebook-acquires-drop-io/|title=Facebook Acquires Simple File-sharing Service Drop.io|last=Parr|first=Ben|website=Mashable|date=29 October 2010 |language=en|access-date=2019-04-19}}</ref> |
Typically, a company that performs a talent acquisition does not show an interest in the products and services of the target, which results in them being discontinued upon the purchase (so that their staff will focus exclusively on incorporating their knowledge into their new employer's projects) or some time afterward. The file sharing service [[Drop.io]] was shut down after its 2010 purchase by Facebook, while FriendFeed was left dormant (with no new feature development and a slowly shrinking user base) until 2015, when it was discontinued.<ref name=":1" /><ref name=":0" /><ref>{{Cite web|url=https://mashable.com/2010/10/29/facebook-acquires-drop-io/|title=Facebook Acquires Simple File-sharing Service Drop.io|last=Parr|first=Ben|website=Mashable|date=29 October 2010 |language=en|access-date=2019-04-19}}</ref> |
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In some cases, the company was purchased both for its human capital and product. For example in 2017, [[Novartis]] acquired [[Advanced Accelerator Applications]], gaining access to new cancer drugs in development as well as experts.{{sfn|Camuffo | Stefano|2019|p=283}} |
In some cases, the company was purchased both for its human capital and product. For example in 2017, [[Novartis]] acquired [[Advanced Accelerator Applications]], gaining access to new cancer drugs in development as well as experts.{{sfn|Camuffo | Stefano|2019|p=283}} |
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==Research== |
==Research== |
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By 2014, the phenomenon had been discussed in the media but was not yet a subject of published academic research.{{sfn|Chatterji|2014|p=395}} The benefits of these acquisitions are a matter of debate.{{sfn|Chatterji|2014|p=396}} |
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== References == |
== References == |
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Revision as of 02:47, 17 May 2024
Acqui-hiring or Acq-hiring (a portmanteau of "acquisition" and "hiring") is "the acquisition of small companies primarily to gain access to their employees".[1]
History
Ben Zimmer traced the derivation of the phrase to a blog post in May 2005.[2] In the early 2010s, acqui-hiring attracted widespread media attention because of some high-profile acquisitions by large software companies such as Facebook, Twitter, and Google.[3] It had become increasingly common in venture capital-backed startup companies, especially within the competitive technology sector (where skilled software engineers working for startups were considered lucrative). [citation needed]
Examples
It is difficult for researchers to determine the motivation for an acquisition if it was not reported in the media. A 2014 analysis of media reports found that Facebook, Google, Twitter, Zynga, Yahoo, and LinkedIn were the most prolific acqui-hirers, and that others included Palantir, Airbnb, and HubSpot.[4]
In 2010, Facebook CEO Mark Zuckerberg stated, "We have never once bought a company for the company. We buy companies for excellent people".[5] One of Facebook's earliest acqui-hires was the seed-funded startup Parakey in 2007.[5]
Chatterji separates Facebook's acqui-hires into:
- Strategic—to acquire the founder of the startup into a high-ranking role. Examples include Bret Taylor (FriendFeed, 2009), Gokul Rajaram (Chai Labs), Sam Lessin (Drop.io), and Peter Wilson (Rel8tion), which totaled over USD$67 million.[6] About these acquisitions, Zuckerberg stated that hiring entrepreneurs helped Facebook retain its start-up culture.[6]
- Innovation—hiring to develop a new feature quickly. In 2010, Facebook bought Beluga messenger service. Within five months, it released Facebook Messenger to 750 million users.[6]
- Product improvement—to enhance existing features.
Google Glass was the product of acqui-hiring Neven Vision and DNN Research. Google obtained both patents and expertise from the acquisition of MicroOptical Corporation.[7]
Rationale
Talent acquisitions can provide a relatively favorable exit strategy for employees, with the prestige of being bought by a larger company, combined with the typical process of hiring.[8][9] A risk to talent acquisitions are employees that are not interested in working within a corporate environment — which may cause them to defect elsewhere.[9]
Although access to talented employees is one of the key factors driving the competitive advantage of companies, the best way to attract this human capital is a matter of debate.[3]
Use of acquired human capital
Typically, a company that performs a talent acquisition does not show an interest in the products and services of the target, which results in them being discontinued upon the purchase (so that their staff will focus exclusively on incorporating their knowledge into their new employer's projects) or some time afterward. The file sharing service Drop.io was shut down after its 2010 purchase by Facebook, while FriendFeed was left dormant (with no new feature development and a slowly shrinking user base) until 2015, when it was discontinued.[10][9][11]
In some cases, the company was purchased both for its human capital and product. For example in 2017, Novartis acquired Advanced Accelerator Applications, gaining access to new cancer drugs in development as well as experts.[12]
Research
By 2014, the phenomenon had been discussed in the media but was not yet a subject of published academic research.[1] The benefits of these acquisitions are a matter of debate.[3]
References
- ^ a b Chatterji 2014, p. 395.
- ^ Zimmer, Ben (29 September 2010). "Buzzword Watch: "Acq-hire"". Visual Thesaurus. Retrieved 27 May 2013.
- ^ a b c Chatterji 2014, p. 396.
- ^ Chatterji 2014, p. 399.
- ^ a b Chatterji 2014, p. 402.
- ^ a b c Chatterji 2014, p. 404.
- ^ Chatterji 2014, pp. 401–402.
- ^ "The Vanity of the "Acqhire": Why Do a Deal That Makes No Sense?". All Things D. Retrieved 23 May 2013.
- ^ a b c Helft, Miguel (2011-05-17). "In Silicon Valley, Buying Companies for Their Engineers". The New York Times. ISSN 0362-4331. Retrieved 2019-04-19.
- ^ Cite error: The named reference
:1was invoked but never defined (see the help page). - ^ Parr, Ben (29 October 2010). "Facebook Acquires Simple File-sharing Service Drop.io". Mashable. Retrieved 2019-04-19.
- ^ Camuffo & Stefano 2019, p. 283.
Sources
- Banalieva, Elitsa R; Dhanaraj, Charles (2019). "Internalization theory for the digital economy". Journal of International Business Studies. 50 (8): 1372–1387. doi:10.1057/s41267-019-00243-7. ISSN 0047-2506.
- Boyacıoğlu, Beril; Özdemir, Mahmut N.; Karim, Samina (2024). "Acqui‐hires: Redeployment and retention of human capital post‐acquisition". Strategic Management Journal. 45 (2): 205–237. doi:10.1002/smj.3556. ISSN 0143-2095.
- Camuffo, Arnaldo; Stefano, Federica De (2019). "Getting access to strategic human capital resources: a multiple strategic factor market approach". Handbook of Research on Strategic Human Capital Resources. Edward Elgar Publishing. ISBN 978-1-78811-669-5.
- Chatterji, Aaron; Patro, Arun (2014). "Dynamic Capabilities and Managing Human Capital". Academy of Management Perspectives. 28 (4): 395–408. doi:10.5465/amp.2013.0111. ISSN 1558-9080.
- Chen, Jun; Hshieh, Shenje; Zhang, Feng (2023-07-19). "Hiring High-Skilled Labor Through Mergers and Acquisitions". Journal of Financial and Quantitative Analysis. Cambridge University Press (CUP): 1–37. doi:10.1017/s0022109023000856. ISSN 0022-1090.
- Coyle, John F.; Polsky, Greg D. (2012). "Acqui-Hiring". Duke Law Journal. 63: 281.
- Elfenbein, Daniel W.; Sterling, Adina D. (2018). "(When) Is Hiring Strategic? Human Capital Acquisition in the Age of Algorithms". Strategy Science. 3 (4): 668–682. doi:10.1287/stsc.2018.0072. ISSN 2333-2050.
- Fantasia, Roberta (2016). "Acquihiring: A New Process for Innovation and Organizational Learning". Information and Communication Technologies in Organizations and Society. Vol. 15. Cham: Springer International Publishing. doi:10.1007/978-3-319-28907-6_13. ISBN 978-3-319-28906-9.
- Gala, Kaushik; Mueller, Brandon A. (2024-05-03). "Acquihires by SMEs as a strategic response to industry digitalization". Journal of Small Business Management. 62 (3): 1430–1468. doi:10.1080/00472778.2022.2140161. ISSN 0047-2778.
- Kehoe, Rebecca R.; Brymer, Rhett Andrew; Keller, Jr; Kim, Joonyoung (2024). "Hiring by professional affiliation: The benefits and challenges of leveraging prospective hires' prior employment ties to improve matching and access to resources". Personnel Psychology. 77 (2): 497–526. doi:10.1111/peps.12553. ISSN 0031-5826.
- Kim, J. Daniel (2023-11-17). "Startup Acquisitions as a Hiring Strategy: Turnover Differences Between Acquired and Regular Hires". Strategy Science. doi:10.1287/stsc.2022.0026. ISSN 2333-2050.
- Ng, Weiyi; Stuart, Toby E. (2022). "Acquired employees versus hired employees: Retained or turned over?". Strategic Management Journal. 43 (5): 1025–1045. doi:10.1002/smj.3361. ISSN 0143-2095.
- Nolan, Samantha (2015). "Talent for Sale: The Need for Enhanced Scrutiny in Judicial Evaluation of Acqui-Hires". Hastings Law Journal. 67: 849.
- Seitz, Nikolaus; Kopp, Jasmin (2023). "Does Acqui-Hiring Really Pay Offs? An Empirical Investigation of Founders´ Retention". Academy of Management Proceedings. 2023 (1). doi:10.5465/AMPROC.2023.15156abstract. ISSN 0065-0668.
- Tung, Rosalie L. (2016). "New perspectives on human resource management in a global context". Journal of World Business. 51 (1). Elsevier BV: 142–152. doi:10.1016/j.jwb.2015.10.004. ISSN 1090-9516.
- Xiao, Jing; Dahlstrand, Åsa Lindholm (2023). "Skill-biased acquisitions? Human capital and employee mobility in small technology firms". Small Business Economics. 60 (3): 1219–1247. doi:10.1007/s11187-022-00654-1. ISSN 0921-898X.
