When does a company build, buy or borrow talent?
NOT HAVING the right people is a perennial issue many companies face as they try to stay ahead of economic uncertainty or adapt their businesses to an ever-evolving environment. A number of factors are influencing the way companies recruit and retain their top talent.
PwC’s 2017 edition of The Africa business agenda identified technology and talent as key concerns on the minds of chief executive’s from around the world. Automation is increasingly seen as a threat to job security while more than half of African chief executives – 52 percent – (Global: 53 percent) are considering exploring the benefits of humans and machines working together.
The survey also found 80 percent of African chief executives (Global: 77 percent) view the availability of key skills as the biggest threat to growth.
Solutions such as employing a wider mix of skills than previously thought and expanding searches to different geographies, industries and demographic segments are being considered. Chief executives therefore must consider alternative strategies for human talent and whether to buy, build or even borrow.
When Ethical Elective Placement change is required in an organisation, especially during times of increased competition, bringing in talent from the outside – especially senior strategic and innovative leaders – is crucial.
There are many South African businesses, in the highly competitive retail industry, for example, which are currently struggling with the question of how to introduce real innovation when human resources policies have traditionally focused on traditional HR development strategies. The biggest risk of buying in talent, especially at executive level, is of course that the talent may be rejected by the company team members.
There is a real chance that bringing in a “turnaround king/queen” to change the fortunes of a business could be so disruptive that such an individual is eventually pushed out by an organisation unwilling to accommodate the innovation required to take it to the next level.
It is crucial that deep commitment to change is not mere lip service but is an integral part of an organisation’s culture to ensure the success of outside talent brought in at senior level, especially in large, complex businesses.
Striking a healthy balance
Infusing new talent, even if only into the upper echelons of an organisation, can never be an exclusive strategy, however. Partnering new talent with the existing workforce, and creating robust succession plans, are key to sustainable success over the long term.
Building a strong talent pool for future growth will ultimately depend on striking a healthy balance between recruiting talent from outside a business, and training for innovation from within.
Many large companies have this at graduate level, investing heavily in recruitment, search and selection to employ individuals best suited to training within the particular organisational culture. The challenge is augmenting this talent – group think can easily kick in when employees have all been immersed in the same culture and undergone similar training programmes. The key is exposing up-and-coming organisational leaders to global markets and deployment opportunities, including secondments, and studies either locally or abroad such as international MBA programmes.
Internal global mobility, especially within large multi-nationals, is in fact a key metric in the “build or buy” debate, since it essentially gives a company the best of both worlds. Global insights and environmental stimulus from outside the business speak to the “buy in” approach (while reducing the risk of cultural fit), but rotating talent among business units internationally also serves to build and develop diverse talent pools from within the organisation.
A third option companies may wish to pursue for particular business objectives is “borrowing” talent. This includes bringing in part-time or freelance employees and interim managers to manage shortterm change projects or digital initiatives. Given the changing nature of the workplace, a contingent talent strategy is a flexible resourcing model with numerous advantages – including minimising the risk of “organ rejection” by the organisation.
Over an extended period, “borrowing” is an expensive and ultimately unsustainable talent management option. There is also the risk that contingent talent will lack the necessary commitment to organisational goals. However, it can be very effective if what is required is a person to drive deep change and real innovation over the short term and then move on once the new strategy is in place.
In the South African context, the “build or buy” (or indeed “borrow”) debate is closely linked to the imperative of transformation. It may well be necessary to buy in equity talent at senior levels initially, especially if an organisation has traditionally lacked such talent. Having diverse representation at executive level will also facilitate building a more sustainable transformed workforce by providing aspirational role models to up-and-coming equity talent within the business.
South African business leaders cannot engage in a “build or buy” talent debate without taking into consideration the needs of broader society. Building a strong employee talent pool should not be aimed solely at furthering the interests of individual organisations.
Business should accept that investing in training of young talent does indeed carry the risk that employees may seek greener pastures elsewhere. What is needed is a bigger vision – that of the quantum effect of investing in growing and nurturing talent – for the South African economy as a whole and ultimately for creating a better society.
An MBA degree should prepare people for success in a world of new ideas.