Time & Attendance
Prevent Call Outs
Implementation & Launch
By Kris Dunn
Nov. 8, 2010
There has been a lot written in the past two decades about human capital related to acquisitions. After all, companies buy competitors not only for intellectual property and market share but also for economies of scale, which is code for “via this acquisition, we can slash $100 million in duplicated payroll costs and make a dollar.”
Of course, the term “duplicated payroll costs” leads to fear and backstabbing, with men ending up in the organizational lifeboat instead of women and children.
There are winners and losers in every acquisition. Most of what has been written focuses on the resulting purge and layoffs that address duplication and cashing in on the aforementioned economies of scale.
But somewhere in the deep underbelly of the company, there are folks trying to make a call whether life is better or worse and if the new organization fits their values and world view. That’s especially problematic when the folks trying to make the call hold the keys to your competitive advantage.
If you sent them a card at the time you closed the acquisition, it would start out as follows: “Dear talented mobile employee who can walk out the door with all the IP we think we just bought in your head. We love you. Please don’t leave.”
The issue is in play at the former Palm Inc., as some key people decided to get the hell out of Hewlett-Packard Co. after their acquisition was announced in April. A key employee compared working for a big company to a wedding and a small company as a first date. As the employee wrote in this article last month for TechCrunch, “I am not looking to dance down the aisle just yet, no matter how pretty the bride is.”
As such, he and another former Palm employee are starting their own company. They aren’t sharing much beyond the fact that they’re interested in developing technologies they don’t think HP would support or embrace.
So let’s break this down. Two former Palm employees who chose to jump from HP are high-profile folks, but there are hundreds if not thousands of this morality play taking place within HP/Palm, and for that matter in any acquisition of significant size.
How do you figure which employees are likely to bolt once an acquisition goes down, and who do you need to invest in to have the best shot at making them stay? I’d do the following three things:
Step 1. Get data points down and across the organization on who you can’t lose in the just-acquired company. Get multiple data points—not just from their manager, because let’s face it, that’s often tainted. Too often that’s all organizations do—get a list from the manager or the department head. That’s weak.
Step 2. Ask your human resources folks to analyze every one of those individuals using their LinkedIn profiles. The main question: Does the background and career arc for each person indicate they are a flight risk? Do they have a history of jumping when things get more corporate? Do they have a history of jumping for other reasons that would indicate they won’t put up with the acquiring entity for long?
Is that subjective? Yes, but I could do this in two full days across 1,000 employees if you give me the list; most of them have LinkedIn profiles/résumés on file.
A couple notes about this process: If your HR team tells you they don’t have the capability to do this, they’re not good enough or they’re embedded close enough to the street at your company where stuff happens.
If they tell you they don’t have time, ask them how much time they can spend on the project. When they answer, tell them your expectation is that they triple the amount of time on the project. It’s that important and core to what you do.
Step 3. I’d call a social network analysis expert and ask them to use your e-mail servers and other tools to assess who the most connected, influential and active people are on that list with the outside professional world. There is some custom social network analysis involved in this step, but I’d want to know who’s most connected and active with the outside professional world in their industry, because if I know that, I likely know who could leave tomorrow and have a lateral gig at another company by the end of the week.
This step is the equivalent of the digital dumpster dive. Don’t feel guilty. You own that e-mail data, and you’re not planning on posting the results on the intranet. It’s privileged information for your eyes only.
So you’ve got a list, but what do you do now? Let’s take a look at what we’ve built and what you should do as a result:
• Step 1 builds the list of who I need to worry about.
• Steps 2 (LinkedIn analysis) and 3 (social network analysis) give me data to tell me who’s at risk.
• Score high in steps 2 and 3 and you get maximum retention attention as a flight risk via more ego-stroking and stay bonuses.
• Score high in Step 3 alone and you’re next on the chart. You’re building your network to give you options even though your past doesn’t suggest you’re going to jump.
• Score high in 2 but not 3, you get some attention, but you’re at the end of the line behind the first two profiles listed because your ability to flee is not as high as the others.
• Score low in both 2 and 3, and thanks for being a loyal corporate citizen. When it comes to retention bonuses, however, there’s no soup for you.
That’s right, I’m using your e-mail and maybe even phone and Web traffic to determine if I need to be concerned at a high level about retaining you. In an ironic twist, if I can do the analysis without you knowing, I have no intention of paying the people most likely to be loyal and go nowhere.
It’s a crazy world, but if I’m advising the CEO for the acquirer, that’s how I would roll, assuming I could deal with the inconsistencies in the organization (those most loyal and least likely to jump getting nothing—a bit of a PR problem for any young Vader of HR).
Don’t hate me because I’ve got a plan. Hate me because I’m treating human capital like any other marketplace and making measured bets based on the best facts I can find—not on emotion.
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