Obsolete, out of date, discontinued, antiquated. In the modern world of ever-increasing technological advances, we all understand what it is like to have outdated equipment in need of replacement. Cell phones slow down, older computers can’t hold enough RAM, and your car radio should be well past playing cassette tapes. But what happens when this obsolescence, this need to be updated, happens to our employees and how should we choose to approach it?
Can You "Buy Talent?"
The industrial and technological landscape is always changing and with each change comes new skills that are necessary to remain competitive. Increased levels of automation require employees capable of maintaining new machines, new coding languages and software need varying levels of digital literacy. As we have seen with the COVID-19 pandemic and the rise of remote work, unexpected disruptions call for new management and communication skills. In the face of these new demands, companies tend to think of the best solution via the perceivably easy “buy, not build” strategy. It’s a simple solution and one that at first glance just makes sense.
If there is a new need and you have the resources, it would take less time and effort to recruit a new employee with the needed skills than it would take to retrain your current employees. It’s no doubt appealing at first, but the back end of this strategy, the part that is sometimes harder to face, is that obsolete employees are usually let go. Their skills are no longer utilized and the new required skills have been acquired from new hires, so there is no remaining place for them in the company. So yes, you can “buy talent,” but this short term solution can create serious risk in the long run.
Replacing Employees May Dull Your Competitive Edge
The truth of the matter is that a well-developed training and development system, while perhaps a headache in the short term, can be incredible for an organization in the long term. Current employees can receive training in new skills, increasing their sense of job satisfaction and productivity. Employers will sometimes incorrectly assume that older employees are less productive and that buying younger talent would help this, but studies actually show that older employees are more productive than younger ones after experiencing retraining. Additionally, the recruiting pool can actually be expanded to include underqualified or undereducated individuals if quality training and development practices are in place to offer novel training to entry-level employees.
While it is important to give your company a competitive edge in transformative times, doing so at the expense of your existing workforce can spell immense trouble for your long term sustainability. A company not utilizing and caring for quality training and development and instead “buying talent” is not increasing the value of their human capital. Rather, in many cases, they are actually lowering it.
Transforming Your Workforce from Within
Companies adopting the “buy, not build” strategy take on two substantial risks to their sustainability: small talent pools and a damaged organizational image. The first comes from the false assumption that a company’s recruitment pool is going to have enough volume and diversity to fill whatever rising need they require. New, competitive technologies don’t roll out with thousands of people prepared to operate them and a company relying on that notion is going to struggle to make those necessary hires in order to keep on the cutting edge and stay competitive. Additionally, companies with this strategy tend not to have fostered training and development, meaning that when this problem arises, they are not adequately prepared to compensate for it.
A training and development focused company also accounts for another sustainability risk. Organizational image is an important factor for both consumers and applicants. The more favorably the public views an organization and its practices, the more customers are willing to buy from them and the more potential workers are going to desire employment from them. However, a company with a reputation for just recycling employees anytime there is significant change is not going to attract new talent and will actually shrink its recruitment pool even further.
- Talent shortages are prominent across all industries, particularly when it comes to high technological competencies.
- Companies adopting the "build, not buy" strategy allow for innovation from within, lowering the cost of turnover.
- Digital literacy is more important than ever, and companies who conduct a skills gap analysis can identify areas for improvement and additional training.
Source: 1. Beatty, P. T., & Visser, R. M. (2005). Thriving on an aging workforce: Strategies for organizational and systemic change. Malabar, FL: Krieger Pub.
Author: James Lovett, Critical Ops Intern
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