Acquiring a Company to Address Talent Shortages: Should You Buy or Build Capabilities?
Acquiring a company to address talent shortages is becoming an important strategic option for business owners and management teams. A lack of critical skills can restrict growth as much as insufficient capital, technology, or market access.
A company may have customers, funding, and an attractive product. However, without the right team, it cannot deliver its investment plans. It may also miss valuable opportunities for expansion and growth.
Business owners and management teams therefore face a strategic choice. Should they develop the required capabilities internally or obtain them through an acquisition?
An acquisition can provide faster access to specialised knowledge. However, the target team must support the buyer’s long-term growth strategy.
A capability-driven transaction involves much more than acquiring employees. The buyer also gains time, experience, established processes, and customer relationships. In addition, the company acquires the ability to deliver complex projects.
Talent Shortages as a Strategic Factor
Demographic change is reducing the availability of appropriately qualified employees. As a result, talent shortages are no longer solely an HR issue.
They now influence investment decisions, expansion plans, and the ability to execute corporate strategy.
According to the European Commission’s Joint Research Centre, the EU workforce could shrink by approximately 42.8 million people by 2070. This forecast assumes that current labour participation rates remain unchanged. [1]
The skills gap already has a direct impact on investment. In the European Investment Bank’s 2025 survey, 79% of EU companies identified skilled labour availability as an investment barrier. [2]
This pressure may become particularly severe in Poland. The Polish Economic Institute estimates that employment could fall by approximately 2.1 million people by 2035. This would represent a 12.6% reduction compared with the current employment level.
If the retirement age remains unchanged, around 3.8 million people may leave the Polish labour market. Meanwhile, younger generations are expected to add only about 1.7 million workers. [3]
Forecasts also suggest that 64% of all job openings in Poland will require high-level qualifications by 2035. The term “job openings” includes both newly created roles and positions vacated by departing workers. [4]
For business owners and management teams, the implications are significant. A persistent skills gap may become a permanent constraint on strategy execution.
The challenge becomes more serious when a company needs an entire specialist team. This may include automation engineers, cybersecurity experts, product engineers, or technical sales specialists.
In such cases, traditional recruitment can be expensive and slow. It may also fail to deliver a complete and effective team.
Research based on the United States H-1B visa system supports this conclusion. These visas allow foreign specialists to work in roles requiring advanced qualifications.
Restricted access to such professionals may increase a company’s willingness to pursue acquisitions. Potential targets often employ people with the exact capabilities the buyer needs. [5]
When Is Acquiring a Company to Address Talent Shortages Better Than Building Internally?
A capability-driven acquisition is most likely to make sense when four conditions are met.
The required knowledge belongs to a team.
The company’s value should not depend on one specialist alone. Instead, it should come from a group that works effectively together.
Such teams usually share a professional language, established procedures, and practical experience. They also have a track record of delivering projects collectively.
Recreating these relationships through individual recruitment may take considerable time. Moreover, newly hired specialists may not immediately operate as a cohesive team.
Time has measurable economic value.
Building a team internally may delay market entry by several months. During that period, the company may lose revenue and competitive advantage.
Therefore, management should calculate the economic cost of delay. In some cases, that cost may exceed the acquisition premium.
The comparison should cover more than recruitment expenses. It should also include missed contracts, delayed launches, and slower growth.
The transaction includes additional assets,
An acquisition may provide access to technology, intellectual property, and certifications. It can also include contracts, references, technical documentation, and established operating procedures.
Customer access may create further value. This is particularly important when the target has strong relationships within a specialised market.
The combined assets may therefore be more valuable than the employees alone.
The buyer has a credible retention plan
The buyer must know how to retain key employees after closing. Without a clear plan, the expected value may disappear quickly.
Preparing the transaction requires the identification of suitable acquisition targets. The buyer must then assess their value and estimate potential synergies.
The next stages include due diligence and an appropriate payment structure. These are essential elements of professional M&A and capital-raising advisory services.
What Should Be Valued in a Capability-Driven Acquisition?
A traditional target analysis focuses on financial performance, cash flows, assets, legal risks, and potential synergies. A capability-driven transaction requires an additional assessment. The buyer must determine how much value depends on specific people and their working relationships.
Costs of the “build” option. The analysis of an internal capability-building strategy should include:
- recruitment and salary costs;
- the time required to create a complete team;
- the cost of unsuccessful hires;
- employee onboarding periods;
- lost or delayed projects;
- the cost of entering the market later.
Costs and risks of the “buy” option. By contrast, the acquisition analysis should include:
- the purchase price;
- advisory and transaction costs;
- integration costs;
- incentive programmes;
- employee departure risk;
- customer loss risk;
- the probability of achieving the expected synergies;
- compatibility between organisational cultures.
The nominal number of acquired employees is not the main issue. Their ability to generate future cash flows is far more important. They may also create value by preventing losses or accelerating strategic projects. Benefits from an acquisition or merger should never be treated as automatic. The buyer must identify and value them before closing. Each initiative should have a responsible owner and a clear timetable. This approach increases the probability that expected M&A synergies will actually be achieved.
Talent Due Diligence: More Than Employment Contract Analysis
Standard due diligence should include a detailed human capital assessment. The buyer must answer five fundamental questions:
- Which individuals and teams genuinely create the company’s value?
- Has critical knowledge been recorded in procedures and documentation?
- How much knowledge remains with only a few key employees?
- What is the risk that important employees will leave after the transaction is announced?
- How would individual departures affect customers, projects, processes, and expected synergies?
The assessment should not focus only on CVs, salaries, and notice periods. These factors provide an incomplete view of the organisation. The analysis should also cover:
- formal and informal roles within the team;
- the level of process and knowledge documentation;
- incentive arrangements for key employees;
- relationships with the founders and management team;
- the team’s level of autonomy;
- customer dependence on specific individuals.
The buyer must understand who will join the organisation. More importantly, management must know why those people would remain after ownership changes.
How Can the Transaction Structure Protect Value?
The risk of key employee departures can be reflected in the price and transaction structure.
For example, the buyer may complete the transaction in stages. An earn-out can also connect part of the payment to future performance. Another option is to defer part of the purchase price. Incentive or share option programmes may further support employee retention. Communication is equally important. The buyer should clearly explain the transaction rationale and its expected outcomes. Poor communication can weaken trust among key employees. It may also put the planned benefits of the transaction at risk. Therefore, communication planning should begin before the transaction is announced. Employees need to understand both the strategic logic and their future roles.
Integration Determines Whether Capabilities Are Retained
In a talent-focused acquisition, post-merger integration should protect the team’s value. This includes its knowledge, relationships, and established ways of working. The integration model must reflect the purpose of the transaction. It should define autonomy, responsibilities, reporting structures, and communication processes. Rapid standardisation may destroy the capabilities that justified the purchase price. This risk is especially high when the target team is used to working independently.
For that reason, the buyer should plan post-merger integration before closing. Waiting until after completion may increase uncertainty and employee turnover.
When Should a Company Avoid an Acquisition?
An acquisition is not always the right solution. It may be unnecessary when the required capabilities can be developed within a reasonable period.
The “build” option may also be more suitable when the relevant knowledge is widely available. This is especially true for skills that are easy to replicate and scale.
Management should exercise particular caution when:
- the organisations have significantly different cultures;
- critical knowledge has not been documented;
- customer relationships are personal rather than institutional;
- the target’s value depends heavily on the continued involvement of its founders;
- employees do not understand their future roles;
- the buyer lacks sufficient integration resources;
- expected synergies have no assigned owners or implementation timetable.
Under such conditions, the buyer does not acquire a sustainable organisational capability. Instead, it assumes a significant employee retention risk. After closing, the company may need to rebuild the same capabilities at considerable cost. This outcome would undermine the main purpose of the acquisition.
An Acquisition Should Buy the Capacity to Grow
Talent shortages can provide a rational reason for an acquisition. However, they should not be the only argument supporting the transaction. A well-prepared acquisition combines capabilities with technology, customers, and established processes. It should also generate synergies that management can identify and value.
The most important question is not: “How many employees does the target company have?”
Instead, decision-makers should ask: “What ability to execute our strategy will we gain, and how can we prevent that capability from disappearing?”
The answer should be specific and measurable. It must also be protected through the transaction structure and integration plan. When properly planned, acquiring a company to address talent shortages can significantly accelerate business growth.
Otherwise, the buyer does not acquire a competitive advantage. It simply purchases an expensive staffing problem. It simply purchases an expensive staffing problem.
Sources
[1] Tackling EU’s shrinking workforce? Better education, more women in jobs, skilled migration.
[2] EIB INVESTMENT SURVEY 2025 EUROPEAN UNION OVERVIEW
[3] The Consequences of Demographic Change for Labour Supply in Poland.
[4] 2025 skills forecast Poland
[5] Hiring High-Skilled Labor Through Mergers and Acquisitions