One Answer to Labor Challenges

Posted by Jennifer Smith on

Recently we were talking with a business owner who is in a tight spot. She’s trying to fill a linchpin position within her company and she’s extremely frustrated at the lack of quality candidates she is finding through sites like and industry-specific headhunters. We asked her if she had thought about buying a competitor to not only fill this key position, but also acquire their customers and lower-level support teams? Her response was “This would have been perfect advice 6 months ago, but now we’re desperate and out of time. It’s a terrible place to be.”

If you have employees, you might be feeling the squeeze of a tight labor market as well. Restaurants need servers, retail storefronts need clerks, and construction companies need skilled labor in order for their business models to work. Unfortunately, a labor shortage and supply chain challenges are causing some sleepless nights for business owners and managers.

Assuming the price and terms are right, there are several advantages to essentially buying your employees though acquisition instead of sourcing talent organically position-by-position:

  1. The employees are already working and productive in your industry.
  2. The employees have circles of influence your current workforce may not that you can tap into for additional future recruitment.
  3. Clients and possibly new vendors also come with the package which you may be able to further develop or cross sell.
  4. You may gain an additional geographic footprint if the target office is in a different part of town or the country.
  5. There may be some economies of scale or synergies that could drive down the cost per employee.

Need a real-life example? We had a client with a national footprint that acquired a company that was very similar to theirs. With this acquisition, they gained the midwestern presence they were looking for, employees that could travel more efficiently to service current customers, a new customer base, and new skill sets for services that are complementary to what they already offer. The process was so successful that we’re working on more acquisitions for them now.

This strategy may not be right for everyone, but if it sounds like something you might like to explore, schedule a confidential conversation here. We can help you whether or not you already have a target company in mind. You might even consider buying a supplier or other vendor for a more vertical integration growth strategy.

Growth through acquisition has many benefits and, if handled correctly, can be the answer to some of the bigger business challenges we’re facing today.