The future of work: Will acquihires replace traditional hiring methods?

Today, acqui-hiring has become a powerful strategy compared to traditional hiring methods. To answer the title question , it is important to discuss each method once and initiate a comparative analysis between them. While acquihire refers to a process of buying out an organization’s skills and expertise rather than its products or services, traditional hiring methods refer to internal hiring with human resource management, hiring through newspapers, local employment offices and temp agencies as well. They differ from the modern recruiting process, as mediums such as smartphones, and social media are excluded. It is quite evident that traditional hiring methods are too limited in numbers, which is one of the most important reasons why the demand for start-up acquisitions is increasing day by day!

Traditional methods of hiring

• Local postings of the employment office

If you put up your job posting in a local employment office, there are chances that many people will come across it and get to know about the job. When they are aware of the given job details, they can apply for the specified job role.

• Newspaper advertisements

Next are newspaper advertisements. It is one of the most popular traditional methods at present. All the people who read the newspaper daily can get to know about job postings through newspapers. An employer can post the job details in a newspaper, the job seekers can get to know about it by reading the ads posted in the paper.

There is a problem here, as not everyone reads newspapers daily or frequently and prefers to follow other platforms for news, and the junk employees don’t get to know about it.

• Internal hiring

It is nothing but relying on existing employees and hiring one of their own to fill the gap! The suggestions of trusted employees in an organization can introduce growth.

• Job fairs

Job fairs are hiring events. Here, the recruiters have the opportunity to engage with the job-seeking candidates. It is an ideal event for both the employer and the employee, as both of them can interact, and communicate to conclude.

• Temp agencies

It is one of the most used methods. You can make use of a temporary employment agency to shortlist and find good candidates for your company.

Drawbacks of traditional hiring methods

The above-mentioned traditional hiring methods are not flawless, they have their flaws too. Let’s get into the details now!

• Restricted flexibilities in the job posting

Even just posting the job ad will present you with many challenges. The majority of print advertisements don’t have enough room to include the full job description and criteria. This is the same as undervaluing oneself.

The regularity with which job postings can be made is another issue. Recruiters can remove an outdated job posting and create a brand-new one on employment sites for increased visibility in the digital space. However, using the conventional method makes that impossible.

• Limited access to diversity and talent

Your chances are limited if you place a job post in a newspaper not only by geographical restriction but also by an element of luck. The ideal applicant may skim right past your job posting without even noticing.

No algorithm matches ideal candidates to job listings, unlike a computerized system. In a traditional hiring technique, you can only target potential employees so much.

• High costs and low application

Traditional hiring is a pricey procedure. You’ll have to invest between $1,000 and $5,000 on each hire. Depending on the sector, that sum can easily be in the $10,000 range. With contemporary hiring techniques, you can find individuals for a far lower cost.

Benefits of Acquihires

Acqui-hiring is a relatively new phenomenon in the tech industry. It stands for purchasing companies to recruit and acquire their employees, while the product of the company becomes secondary. It is considered one of the most beneficial hiring processes at present. Wondering how can acqui hiring benefit you? Here you go with the answer!

• Time-saving

Acqui-recruiting is a wise employing approach because it reduces the time and expense of hiring new employees. It stands for a practical shortcut to quickly hire top talent in huge numbers. Additionally, it offers a company that is being acquired a replacement for a shutdown. Companies that are being acquired frequently have financial issues, thus this kind of business transaction gives them a way out while allowing investors to get back some or all of their investment. After being bought, the acquired company frequently closes.

• Eradicating competition

Acquihire is sometimes a fantastic strategy for the company that is buying out a smaller firm to get rid of rivals. This can occasionally give access to a customer base of the purchased business. In rare instances, this may also be a founders’ bid strategy when they are cash-strapped and have no choice but to sell their company to the highest bidder and quit the business.

• Advances skills of the purchasing company

It overcomes the difficulty of locating the ideal talent pool. By bringing in talent from other smaller companies and merging the knowledge into one company, it is one of the quickest ways to hire a good number of people with cutting-edge talents. These types of clever tactics are best exemplified by Urban Ladder, Swiggy, and RailYatri. Hiring through this process thus increases the earning potential as well!

To conclude, it could be said that the demand for startup acquisitions is increasing day by day which reflects the fact that most people prefer acquihiring compared to traditional hiring methods. There are a few points that need to be considered in the process of acquihiring, such as the deal structure process, potential tax questions, fair value of acquihire, the impact of the purchase and post-closing liabilities. You need suitable guidance in this process. Growthpal can help you here, the experts working with this reputed online platform aim to assist startups and investors by delivering customized, actionable intelligence to enable informed decision-making!