Should You Build or Buy Skilled Talent?

For employers, the labor market challenge is exacerbated by an incredibly rapid rate of change in the workforce. Work now looks wildly different than it did just a couple of years ago. The global pandemic and the “great resignation” changed peoples’ perceptions of work. There was a great re-examining of our collective relationship with work, and where, when and how work should be performed. The “new normal” this created is still evolving.  

Add to this the rapidly advancing rate of technological change and the rate at which automation is being adopted. Artificial intelligence is being used everywhere and the impact of generative AI on the workforce, the subject of endless debate, is sure to be felt in ways that we don’t currently realize. And three to four years from now, work will again look wildly different than it does now. 

We’re already seeing rapid automation adoption in various business sectors and in advanced manufacturing, shifting the skills requirements in these vibrant fields. In accounting, for example, automation may take over some of the most basic and repetitive tasks, freeing up time for those professionals to work on less repetitive, more highly valued consultative or analytical tasks. In healthcare, on the carpeted side of the industry anyway, we’ll see shifts in some aspects of health information technology and electronic medical records. 

Research by McKinsey Global Institute indicates that by 2030, activities that account for up to 30% of hours currently worked across the United States economy could be automated.¹ This trend is accelerated by generative AI. STEM professions will see acceleration of AI adoption of about 16%, while business and legal professions and production work will see 14% and 4% acceleration respectively.

It is widely believed that adoption of generative AI technologies will lead to more jobs, not fewer. People in the lowest earning categories, mostly in the office support, customer service and foodservice areas, are up to 14 times more likely to need to change occupations by the end of this decade. While these shifts, according to the same research, are predicted to result in a loss of 1.1 million jobs by 2030, jobs in the highest wage categories, fueled by anticipated growth in healthcare, STEM and builder roles, could grow by nearly 4 million.¹ Through more effective job matching, access to training programs and different approaches to both hiring and training, workers in low-wage, shrinking occupations can move into better-paying jobs with more stability.  

Depending upon a rate of adoption that is still uncertain, generative AI and other AI-powered automation technologies have the potential to increase workforce productivity as well, if stakeholders manage the transition well, supporting new and existing members of their workforces in learning new skills.

In technology careers, we’re going to see major shifts at the intersection of technology and business processes. We’re going to need different skillsets around large data processing, large learning models around artificial intelligence and how we deploy them. Building technology in a vacuum will be neither satisfactory nor sufficient. New technologies will need to be built around changing business processes and the way we get work done.

When you consider this change in the context of today’s historically low unemployment rate, the challenge becomes abundantly clear. You can also see how employers may want to turn up the volume on their “build” strategies. With this rate of change, sitting idly by is simply not an option. Employers who do will see large proportions of their talent and capabilities become misaligned to organizational strategies and objectives. From an ethical, moral and financial standpoint, it's simply not sustainable to believe you can continue buying new talent and changing your talent out. That’s a practice that won't work for society and certainly won't work for an organization. So by leaning into a build strategy, in which employees are taught new skills that align with emerging technologies and processes, talent strategies can remain relevant as the nature of jobs changes. 

Because there are so many variables, I don’t believe there is a hard-and-fast cost ratio between building talent from within and buying it from outside your organization. But I will say that building from within can be more cost-effective, especially over time. According to a study by Josh Bersin, the cost associated with hiring and training someone who is new to the company can be ​6 times more than building from within.² Considerations here include the specific skills your organization needs, when you need them, at what operational areas and levels and more. When you need skilled talent quickly, you may be more likely to hire from the outside. A long-term solution may be a learning and development program.  

General L&D programs serve a couple of important purposes and certainly have their place in thoughtful and strategic workforce planning. Their most prominent attribute is that they are retentive in nature and are highly valued by the younger generations that are becoming an increasingly larger portion of the workforce. 

A number of the skills that will need to come out of that workforce planning process, however, are likely not things that an L&D department can handle on its own. Going far deeper than a good L&D strategy is the importance of specifically defining the hard and durable skills that will be critical to your organization’s success going forward and then having a purposeful and intentional strategy in place to be sure you have those skills in place at the right time horizons to power that strategy.

This illuminates the difference between a general L&D strategy, which can be quite a bit more costly, and an immersive and bespoke upskilling and reskilling program that can be possible through partnership with a strong educational institution. A good partner can take those discrete elements, build them into a learning pathway or certificate, and then have that certificate stack into other programs. This leads to a long-term retentive approach. An individual can continue along the pathway to grow their personal worth, while working toward a degree or other credentials with skills that align with the technological change we’re seeing.

While the current supply-demand balance favors the employee and not the employer, there is some good news. With creativity and thoughtful planning in talent acquisition and skilling strategies, employers can be successful in either build or buy approaches. 

Non-traditional student populations are seeking opportunities in areas like health information technology, software development, computer information systems and cyber security. At DeVry University, we help employers meet talent objectives on both sides of the “build or buy” strategic conundrum. 

On the build side, DeVry can develop customized skills pathways that are closely aligned with the technical needs of organizations. Another component of a smart workforce planning strategy is an internship or apprenticeship program that cultivates skills in entry-level employees, reduces time-to-hire and acts as a formal screening process. 

In helping employers recruit from outside their organizations, DeVry and our Keller Graduate School of Management can support talent acquisition needs by tapping into a nationwide student and alumni population. Employers can post jobs on our online HireDeVry platform and participate in virtual career fairs. Our institution has also made progress recently in developing pre-internship programs to help employers to connect with students earlier and deliver better ROI.