How to Measure Quality of Hire During M&A: Insights from Thibaut de Vos

Open Source Hiring: 
How to Measure Quality of Hire During M&A.
Insights from Thibaut de Vos

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In the world of mergers and acquisitions (M&A), one of the biggest challenges businesses face is integrating new talent while maintaining high standards of performance. Assessing the "quality of hire" becomes a crucial component in these processes, and understanding how to measure it effectively can have long-term effects on an organisation’s success.

In a recent interview, Thibaut de Vos, Director of Talent at Tide, shared his experience working on talent acquisition and integration during M&A at companies like Uber and Newbank. His insights reveal the importance of strategic frameworks and robust metrics when evaluating and hiring talent, particularly during periods of organisational change. Below, we explore Thibaut’s approach to defining and measuring quality of hire and why it’s become the "holy grail" of modern recruitment.

Leadership and Talent Evaluation During M&A

Thibaut’s experience in M&A processes at Uber and Newbank has given him a front-row seat to the complexities of assessing talent in these scenarios. As he explains, it’s not just about finding the right people; it’s about ensuring that the acquired talent can integrate smoothly into the new organisation.

He developed a comprehensive framework to evaluate talent during M&A, focusing on five critical indicators:

1. Leadership Quality: Leadership plays a huge role in the success of an acquisition. Thibaut mentions, “Interviewing every VP in the company was vital to get a sense of leadership dynamics.” Strong leadership is a predictor of how well the company will integrate into the parent company.
2. Skills and Functional Distribution: Understanding the acquired company’s core focus—whether it’s engineering-led or sales-driven—helps evaluate how the team will fit with the acquiring company’s goals.
3. Level and Seniority Distribution: Thibaut emphasises that assessing the balance of junior and senior staff provides important context about the organisation’s structure and culture.
4. Talent Flows: Analysing where talent comes from and where they go is an excellent proxy for evaluating overall pedigree, according to Thibaut. “It’s a good way to assess talent without interviewing everyone,” he says.
5. Engagement and Culture Data: Metrics like Glassdoor reviews, attrition rates, and internal engagement surveys provide insights into how well the team collaborates and how satisfied they are. Understanding culture is crucial for ensuring that talent from the acquired company integrates smoothly.

This framework allows for a well-rounded assessment of the talent in question, which is essential during an M&A process where the stakes are high and the margin for error is low.

The Challenges of Talent Integration in M&A

Despite the structured framework, challenges often arise when integrating teams post-acquisition. One of the biggest obstacles Thibaut identifies is getting a seat at the table early in the process. Too often, M&A decisions are made before talent acquisition teams can influence them. As he puts it, “Talent acquisition teams are often brought in late, after a deal is signed. Having a seat at the table is a rarity and a privilege.”

Secrecy during M&A also complicates matters, as only C-suite executives are typically involved in the early discussions. Thibaut shared that, in some cases, he was able to negotiate interviews with top-performing employees across departments, which helped provide a clearer picture of the company’s overall talent level. But in most cases, this level of access isn't available, making it harder to assess talent holistically.

Even after the acquisition, integration challenges often persist. “The people integration aspect is always longer and more complex than anticipated,” Thibaut explained, noting that this can undermine the expected value of the acquisition if not handled properly.

Measuring Quality of Hire: A Two-Pronged Approach

When it comes to measuring quality of hire, Thibaut provides a straightforward yet powerful definition: “Quality of hire defines the value an employee adds to an organisation.” However, measuring that value requires both short-term and long-term indicators.

He suggests looking at two sets of data:

1. Early Signals of Quality: These include probation pass rates and hiring manager satisfaction surveys within the first few months. Tools like Ashby allow companies to gather this data, helping to provide an early sense of whether the new hire is meeting expectations.
2. Long-Term Signals of Quality: Over time, performance reviews, retention rates, and promotion data become essential for assessing long-term success. Thibaut also points to engagement scores and employee satisfaction surveys as indicators of whether the hire is a cultural fit.

Thibaut highlights the importance of correlating these early signals with long-term data to ensure accuracy. At Newbank, they ran a regression analysis comparing hiring manager satisfaction with eventual performance reviews. This allowed them to predict long-term success based on early data, helping them avoid costly hiring mistakes.

“Quality of hire defines the value an employee adds to an organisation.” However, measuring that value requires both short-term and long-term indicators.

The Role of Engagement and Satisfaction

While performance is key, Thibaut emphasises the importance of employee satisfaction. He explains that there’s typically a strong correlation between performance and happiness. “It’s rare to find an employee who is exceeding expectations and is also unhappy,” he said. However, when mismatches do occur, it’s often because the role is not aligned with the employee’s skills or aspirations. This misalignment could indicate a “mishire,” even if the individual performs well in the short term.

Employee engagement metrics, such as eNPS (Employee Net Promoter Score), are valuable tools for assessing satisfaction. Thibaut recommends keeping a close eye on these scores to ensure that new hires not only perform but also thrive in their roles.

Adapting for the Future: The Role of AI in Recruitment

Looking to the future, Thibaut is excited about the potential of AI and automation to improve the recruitment process. He sees these tools as key to streamlining administrative tasks—like resume screening and scheduling—allowing recruiters to focus on more strategic, value-adding activities. “The goal of automation isn’t just productivity,” he noted. “It’s about freeing up time for recruiters to give candidates a better experience.”

By automating the more repetitive aspects of recruitment, AI can help recruiters focus on evaluating quality of hire more effectively and ensuring that the right talent is integrated into the organisation.

“The goal of automation isn’t just productivity,”

The State of the Talent Market in 2024

As the job market continues to recover, Thibaut is optimistic about the future. He’s observed an increase in open positions, particularly in the fintech sector, and believes that investor confidence is returning. “The IPO market is heating up, and I think that’s a good sign,” he says.

Tide, where Thibaut currently leads talent acquisition, is growing its headcount by 30% in 2024, reflecting this upward trend. With plans to improve their tech stack and introduce more AI tools, Tide is well-positioned to continue hiring top talent while ensuring a high standard of quality in their recruitment process.
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“The IPO market is heating up"

Conclusion

Measuring quality of hire is no easy task, especially during M&A, but Thibaut de Vos’s framework offers a practical and comprehensive approach. By focusing on both early and long-term indicators, companies can ensure they’re not only hiring the best talent but also integrating them successfully into their organisation. With tools like AI and automation on the rise, recruitment is becoming more efficient, allowing teams to focus on the human side of hiring: providing great candidate experiences and ensuring long-term success.