TAMPA 鈥� 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 a new USF study.
This build or buy strategy is the focus of a research article published in Human Resource Development International, co-authored by Amit (A.J.) Chauradia, an assistant professor of instruction in the School of Management at the University of South Florida鈥檚 Muma College of Business.
The article, co-authored with researchers from the and the , explores when firms choose to develop talent internally 鈥� known as a 鈥渂uild鈥� strategy 鈥� versus hiring experienced employees from external labor markets, or 鈥渂uying鈥� talent.
鈥淭his research challenges the idea that talent strategy is purely a matter of culture or preference,鈥� Chauradia said. 鈥淚nstead, it shows that the decision to build or buy is shaped by the firm鈥檚 internal capacity and the volatility of the environment.鈥�
Using data from 174 large U.S. law firms over an 8-year period, the study found that firms with more money and available senior staff tend to 鈥渂uild鈥� talent by training and mentoring junior employees. In contrast, firms facing sudden or unpredictable workloads are more likely to 鈥渂uy鈥� talent by hiring experienced workers from outside to meet immediate needs.
Amit J. Chauradia
The study鈥檚 insights provide practical implications for human resources leaders, emphasizing that talent strategy should align with both long-term goals and immediate operational pressures.
鈥淔or executives and HR leaders, this study highlights that talent decisions are strategic levers, not simple administrative choices. A firm鈥檚 decision to build or buy talent directly shapes its future competitiveness,鈥� Chauradia said.
The study, titled 鈥淭alent Hiring Strategies: When Do Firms Build versus Buy Their Human Capital?,鈥� also underscores how mentoring capacity within an organization can support sustainable internal development.
Firms with more senior-level leadership available to coach and support junior employees are better equipped to pursue a build strategy, the authors found.