In tech deals, it's sometimes people that raise a red flag during software due diligence — in particular, the potential loss of talent.
Even in M&A transactions focused on the acquisition of technology assets, an integral part of their success is tied to identifying and retaining the key people in tech development and/or having a contingency plan in place.
The 2021 ManpowerGroup Talent Shortage survey listed IT/Data as one of the top five in-demand roles, stating: “As tech disruption accelerates, employers are looking for the right blend of technical skills and human strengths”.
There’s an increase in job opportunities for tech talent but, according to an analysis by Visier, a workforce analytics company, it is accompanied by an upward trend in resignations with the highest rate occurring in the tech industry.
Digital transformation and innovation require talent, but with recent increases in voluntary turnover, companies will need to focus on strategies not only to attract new talent but to retain the talented people they already employ.
Insight into tech talent turnover can be gained through data. In the Harvard Business Review, Ian Cook wrote: “These trends highlight the importance of taking a data-driven approach to determining not just how many people are quitting, but who exactly has the highest turnover risk, why people are leaving, and what can be done to prevent it.”
Avalia Systems takes a data-driven approach by combining methods and tools to analyse data from various sources to gain insight into the people-related risks of a tech deal. In a particular case, we employed machine learning to identify turnover patterns and predict the next most likely talent departures.
By analysing the company’s available data and evaluating the technology in the context of the investment thesis, software due diligence can provide clarity on the people in tech by:
Identifying turnover patterns;
Evaluating for the skills needed for scaling;
Identifying candidates for proactive retention;
Identifying possible causes of turnover;
Recommending practices to mitigate the risks associated with turnover;
Recommending a contingency plan in case of talent loss.
Gaining insight into tech talent turnover and strategising for retention and attraction can be achieved with a rigorous software due diligence capable of turning quantitative and qualitative data into actionable insights that hold business impact at the centre of its focus.
For data-driven and business-centric Software Due Diligence that delivers results quickly, contact Avalia Systems.