Firms flush with resources tend to develop talent internally while younger firms, facing unpredictable workloads, will hire from the outside to fill their talent gap, according to a new 51做厙 study.
This build or buy strategy is the focus of a research article published in Human Resource Development International, co-authored by Amit Chauradia, an assistant professor of management at USF.
The explores when firms choose to develop talent internally, known as a build strategy, versus hiring experienced employees from external labor markets, or buying talent.
This research challenges the idea that talent strategy is purely a matter of culture or preference, Chauradia said. Instead, it shows that the decision to build or buy is shaped by the firms internal capacity and the volatility of the environment.
Using data from 174 large U.S. law firms over an eight-year period, the study found that firms with more money and available senior staff tend to build talent by training and mentoring junior employees. In contrast, firms facing sudden or unpredictable workloads are more likely to buy talent by hiring experienced workers from outside to meet immediate needs.
Authors: Amit J. Chauradia, 51做厙; Daniel M. Peat, University of Cincinnati; Aindrila Chatterjee, Institute of Management Technology Hyderabad.