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The build or buy question is, according to Jeff Hudak, Vice President of HR at Precision Walls, a US Construction industry supplier, a simple one. "It's like asking should I get a freshly laid egg and hatch it, or get a fully grown chicken," he says. "It depends on when you want to have dinner."
Obviously raising talents from a graduate or lower level means their skills can be tailored to exactly fit your organisation. It's also often a cheaper investment, at least in terms of salary. But what employers gain in those factors, they lose in the lag that it takes "built" talent to get up to speed. By directly hiring the skills required, employers can enjoy "dinner" more or less immediately.
That's a reasonable analogy when only one worker is required; but it gets more complicated when employers are planning a full talent management strategy over the long term. In such situations, most experts advise on a mixed strategy - ensuring some talents are built up in the company culture and values over time, while others are brought in for immediate impact.
The buy side
Victor Dumitrescu, of Pedersen & Partners, says there are added advantages to bringing in established talent. He says the "fresh eyes" that come with new hires, particular at top and middle management positions, can have lasting value. "Unless you have someone within the organisation whom you're absolutely positive can cope with the role, it is better to look for someone outside," he advises. "That converges into a new way of looking at the problems the organisation is facing, the costs of the training are minimised, previous experience in similar roles make his integration a smoother one, and he is capable of performing from 'day one'."
Bringing someone in from the outside also helps facilitate change. "If a business desires a culture shift or needs to move quickly in a specific area then buying in skills to hotwire this process is often a good option," says Rachael Baker, Head of Organisational Change and Development at TAC Europe. Having noted this, she does acknowledge there is still a need for some continuity. "Even in a situation of driving cultural change there is likely to be some inherent value in the existing knowledge and skills of incumbent staff," she says. "This shouldn't be overlooked in the desire to change quickly."
Nurturing for the long term
There are several more arguments in favour of the 'build' side of the equation. William Meirs, Senior Search Consultant at The Church and Palfrey Group, says employers should aim to get smart, enthusiastic and flexible people on their payroll, even if their existing skills are not an exact match for the roles required.
"They are the building blocks to growth," he says. "Their loyalty will be greater and they will become invested in your business. Also, they are probably quick students.
"Only when a particular skill set is mission-critical to the organisation, so the luxury of training is not an option, do you go outside."
Obviously, a major issue with nurturing talent is that organisations must have the right training and mentoring plans in place. These are generally built up over a long period but can also be brought in if an immediate change of culture is called for.
Meirs says employers also need to ensure senior staff have the time and energy to develop the skills of junior members. He recalls a number of clients who have lost junior staff because their leaders were too busy to take an active part in the nurturing process.
The cocktail mix
Most organisations will employ a mixture of build and buy efforts in their talent management strategies. The exact ratios used will depend on the individual employer's circumstances, but experts warn that under-selling the 'build' part could lead to problems with retention.
Mike Lehr, President of Omega Z Advisors, advises clients to restrict external hiring to 20%. "If you do not have a good developmental strategy for your talent, then even your hired talent will tend to go stale," he says. "Compounding the problem will be that a dominating 'buying' strategy will tend to undercut morale in your current workforce.
"There is no hope for advancement (when) openings are being filled from the outside. So, today's desirable 'bought' talent becomes tomorrow's discouraged 'current' talent."
Mark Condon, director of Talent Acquisition - Asia, Talent2, says the perfect balance will always depend on the employer's individual situation. "Recruiting external 'ready-made' talent is often the only way to change a culture quickly and is a valid change management strategy to change the power balance internally," he says.
"The other side of the coin is true however. Organisations that continually recruit externally for key roles are also missing a great opportunity to develop internal talent." This can help to improve key metrics like employee engagement, staff turnover and productivity.
Doing this well requires long term thinking at the HR-level. "Succession planning is critical to understanding the potential within a company and where to allocate the development budgets."
Bringing in reinforcements
If it all sounds too difficult; there are plenty of outsourcing providers who are prepared to take up the slack. Condon says HR has a huge range of activities to manage effectively, so it's not surprising many call in specialists to handle their talent management strategies.
"It is challenging to both manage strategic talent issues while also being best practice in more functional areas such as payroll, recruitment, and first-level support," he said. "All of (these) are time-intensive and require high levels of specialisation."
He says it is perfectly possible for companies to build their own expertise in this area; but often not as efficient as calling in outside help. Employers need to look closely at the money and time they are allocating to the issue and weigh up who is the most efficient provider.
"The argument needs to be - can the provider extract more value from the process or function than the company doing it themselves," he says.