Door A: Why Now Is the Right Time to BUILD Talent

New skills and competencies seem to be cropping up every day, and your organization needs to tap into them to remain competitive — but your business model centers around nurturing fresh talent and promoting from within.

Is a “building talent” approach — as opposed to “buying” — sustainable for your business today? That boils down to not just your preference and corporate culture but also your organization’s immediate needs plus at-play external market factors, according to a study conducted by the University of South Florida, the University of Cincinnati and India’s Institute of Management Technology Hyderabad.

The study utilized eight years of data from about 175 large U.S. law firms — but its findings are applicable to any type of professional services organization, said AJ Chauradia, an assistant professor of instruction in the School of Management at the University of South Florida’s Muma College of Business and one of the study’s authors.

The choice to develop talent rather than “buying” experienced, already-trained external hires often rests on three broad organizational factors, Chauradia said:

• Significant financial resources;
• A lineup of senior employees and managers who are ready to provide mentorship; and,
• Stable, longer-term client demand.

Access a related Workspan Daily article on this subject:

• Door B: Why Now Is the Right Time to BUY Talent

Access a bonus Workspan Daily Plus+ article on this subject:

• To ‘Build the Best’ or ‘Buy a Star’: A Strategic Cost-Benefit Analysis

“As skills become obsolete faster, companies need an ongoing upskilling engine, not just one-off external hires.”
— Stella Ioannidou, senior director of research, The Josh Bersin Company

Why Businesses May Choose to Build

Organizations that decide to build talent, either by upskilling their current workforce or hiring entry-level workers and bringing them up to speed with relevant skills, may choose to do so because some of the following scenarios apply, according to experts interviewed for this piece:

• You are a larger firm with stable clients, creating the opportunity for employees working with those clients to learn over time.
• You have clarity on the skills the organization needs today — and an understanding of the capabilities that will be needed beyond just today.
• You have a workforce with the capacity to be reskilled or upskilled — one that is likely to respond to learning and development with increased engagement and loyalty.
• You prioritize institutional knowledge.
• You have the time, infrastructure and resources to support development.
• You are experiencing a tight labor market for in-demand skills, creating costly and competitive hiring conditions.
• You have concerns about internal pay equity issues stemming from paying above-market rates to attract certain skills.

“A strong culture and employee value proposition that emphasize growth and internal mobility make [the choice to build talent] even more attractive, especially when the organization can retain and fully realize the return on that development investment,” said Sue Holloway, CCP, CECP, a content director at WorldatWork. “Internal development also makes sense when the skills are ongoing, business-critical or unique to the organization.”

Businesses in newer or tech-heavy industries may struggle to find outside talent, since the skills their organization hinges on are often novel and rapidly involving, Chauradia noted. In those cases, organizations often prefer to hire research university grads who just learned the newest, cutting-edge technology and then train them from the ground up.

When organizations develop a reputation for building talent, they’re more able to attract the best entry-level employees who know they’ll develop marketable skills by signing on with those organizations, Chauradia added.

“If organizations feel they can’t find certain skills elsewhere, then they have no choice: They have to build the talent. The nascency of the industry matters — with all those folks in Silicon Valley, the fresher, the better,” he said. “And because it’s so expensive to do, you can’t just say, ‘We’re going to build one year and not the next.’ It’s a system that involves years of development that you keep reinforcing.”

A long-term talent-building structure is most practical for industries whose competencies continually change — and in the long run, it can be a more cost-effective choice, reiterated Stella Ioannidou, the senior director of research at The Josh Bersin Company, an HR research and advisory firm.

“As skills become obsolete faster, companies need an ongoing upskilling engine, not just one-off external hires,” she said.

HR and Total Rewards Considerations When Building

There are certain HR and total rewards (TR) implications to keep in mind when supporting a “building talent” strategy, which was listed prominently in the results of WorldatWork’s 2026 Priorities of Total Rewards Leaders study.

On the one hand, organizations may find some of the employees they’re hoping to develop simply aren’t trainable in the way that’s needed, Chauradia said. At some point, the cost of managing those workers’ mistakes as they learn may no longer be worthwhile.

On the flip side, Holloway said, you also want to avoid successfully training your workers and then losing that talent before you can reap the rewards.

“HR needs to ensure the organization can deploy those new skills, reward them competitively and retain the talent they’ve developed,” she said. “Cultural alignment is also essential — skill development needs to reinforce, not conflict with, the way the organization operates and grows.”

Mobilizing Those Build Strategies

Here’s how that looks in practice, Ioannidou said:

• Paint a clear picture of how new skills translate into career paths, higher pay and recognition.
• Offer protected time for learning so training doesn’t create an unsustainable workload.
• And, don’t push employee development without providing opportunities to use those new skills or step into new roles.

When it comes to rewarding entry-level employees you’ve hired to build, their priorities are often unique, Chauradia said. Providing equity and stock options can help encourage them to grow and improve their work within the organization, knowing that could translate to longer-term rewards for them. But while pay is important, it may be less of a priority for a fresh hire — and the same goes with health benefits. These employees are often new to the industry and workforce, and are looking for social interactions, in-office connections and new professional relationships.

“These workers coming into their first job are looking to change the world and make a difference,” Chauradia said. “There are other ways HR can motivate and compensate them, such as giving them opportunities to do pro bono work to help people who are less fortunate. These things mean a lot to those entry-level workers. They’re looking for other factors to motivate them. Make it fun for them — if they’re not having fun, they’re not going to want to stay.”

Editor’s Note: Additional Content

For more information and resources related to this article, see the pages below, which offer quick access to all WorldatWork content on these topics:

• Career Growth
• Employee Benefits
• Employee Compensation
• Finance and Budgeting
• Total Rewards