To Build Or To Buy (Talent)?

Welcome to The Shift, a weekly newsletter where I provide thought-provoking ideas to help you think differently about your career and money.

Before I pass the reigns to David, just a heads up that once upon a time David and I worked together.

He actually recruited me - as in he dug up my LinkedIn profile and eventually convinced the team he worked for to hire me (or did he convince me to work for them, I can’t remember….) 

I’m a big fan of David and his thoughts on ways to recruit and work with talent. He’s a big thinker and a trusted partner. Doesn’t get better than that.

About David: David has over 10 years of experience in Human Resources acting both as a leader and individual contributor. He currently works at LPL financial leading both their experience talent sourcing team and university recruitment.

If you like what you read below, please consider following him on LinkedIn.

Business vs. Talent

Businesses have two options when it comes to growth: Build it, or buy it. 

This age old debate has lead to heated discussions in board rooms and executives suites across the most prominent companies in the world.

Weighing the differing philosophies is complex, especially given the number of factors to consider. It all boils down to the company’s objectives, budget, timeline and last, but certainly not least, the leaders in charge. 

In the world of HR, a similar question pops up when companies look to grow or deliver new capabilities. Do we buy (acquire) talent? Or do we build (develop) talent?

As an HR professional spending most of my career on the talent acquisition side, I’ve seen first hand these two strategies play out. While it may not be as closely studied or monitored, it’s essentially the same problem.

Do we pay a premium for skilled talent? Or do we focus on development of existing or prospective talent to enhance their “human capital”?

Dejargonating Human Capital

Human capital is everything someone brings to the table -- the knowledge, skills and abilities one possesses.

This is not just occupational knowledge or information learned through studies.

It's ALL of the experiences one has accumulated; all the traits they’ve built or were born with; successes; failures; how they overcame failures and how that can be leveraged and utilized by companies to accomplish there goals.

Buying Talent

Now, most don’t say “buy” talent, they use the term “talent acquisition” or simply put, recruitment. However, when you are acquiring human capital that provides the knowledge skills and abilities a company needs, can offer quicker results, or the potential for unexpected positive outcomes, typically that comes at paying a premium price for it.

… and if the job doesn’t meet their expectations or another company offers more, what’s to stop them from leaving? Taking their human capital with them.

While there are indeed factors outside of compensation that matter to employees… do you do your job for free? I don’t.

Building Talent

As needs change, companies can also invest in developing talent and equipping them with those necessary skills. Not only can this fill those crucial skill gaps, but 94% of employees said that they would stay at a company longer if it invested in their career development¹ .

This talent development can lead to stickier employees who don’t opt to leave for a slightly higher offer elsewhere.

However, while it sounds nice, developing talent outside of on the job experience proves to be a challenge.

51% of executives surveyed said their companies' existing L&D programs feel like a "waste of time."²  

This might not speak to the idea of developing talent, but the process in which they are developed. Some people don’t want to invest the time needed to develop new skills. And some forms of talent development like self-directed modules may miss the mark completely. 

What Does it Mean for Me?

Well, if you are and employee looking to grow or make a change, keep these 3 things in mind:

1. Know you’re worth

   Understand your true human capital → what you bring to the table.

2. Own your own development

   Don’t rely on your employer to develop your skills, develop them yourself.

3. Identify the right skills to learn and grow

   We can’t tell the future, but you can get a sense of where companies are going and what is valuable. Learn and develop the RIGHT things.

Thank you David! 🙏 

Let’s make The Shift!

Lindsey

Sources:

1. LinkedIn.

2. edX.