Leading companies have realized that skills obsolescence is real. The skills gap has a massive impact on the market and it requires attention at the highest level of businesses. In order to fill the gap, these companies are continuously evolving their talent strategy to stay ahead of the game.
Businesses with successful capabilities development, are thus, being able to enjoy the outsized fruits of their new competitive advantage.
In 2020, World Economic Forum (WEF) published a report on the future of jobs. The 10 years outlook predicted that up to 50% of the jobs would change radically due to automation. The report was optimistic about the fact that only 5% of the jobs will be eliminated but said that 90% of the jobs would require digital skills.
The reality is that most companies do not have a sound capability-build strategy to address the tectonic shift in the job market. As a result, the capability gap will be the single biggest problem that companies will face in the future.
The problem with skills and capabilities is that it is expensive and time-consuming to develop. It is fraught with hiring challenges, misfit staff members, internal resistance and non-aligned leadership perspectives.
One of the capability-build strategies these companies must explore is talent acquisition through M&A.
As the world moves away from finance-centric M&A to people-centric acquisitions, companies need to adopt a smart talent-centric M&A strategy.
The logic is simple. Talent acquisition through M&A can provide a massive advantage to a business as is highlighted through the following elements:
Time: A business can get access to hugely talented people overnight through M&A
Talent Pool: Since it is a company acquisition, along with individual brilliance they also get access to entire teams
High-performing teams: One of the reasons, a company gets acquired as talent acquisition is because the acquiring company has a proven track record of working well together.
Fresh ideas: Acquired companies always bring fresh ideas and potential innovations that can leapfrog the acquired company to a higher growth trajectory
Avoidance of pitfalls: The development of skills and capabilities is not a sure-shot science. Myriads of pitfalls lay sprayed along the path of capabilities creation. With an M&A, companies can completely bypass these challenges
As you can see, skills obsolescence is as much a threat as it is an opportunity. Skills obsolescence is a real threat and it is a threat that every business is going to face.
How businesses address this challenge will determine their future survival?
Unfortunately, traditional in-house skills development will no longer be feasible to be managed and maintained by most businesses and definitely, all businesses in the mid-market and SME segments. Under these conditions, there will only be a few options.
Talent acquisition through M&A definitely, will be a compelling strategy for businesses to pursue.
Van Eerd, Robbert and Guo, Jean, 17 January 2020, Jobs will be very different in 10 years. Here’s how to prepare, accessed on 26 June 2022, https://www.weforum.org/agenda/2020/01/future-of-work/