Better Buy

From my previous blog (Promote or Hire) you know by now that I have a bias towards promoting talent from within. In my experience, which is also backed by research, employees that have been promoted within the company are most likely more successful and cost you less.

So why would you go outside and ‘buy’ talent from the market? Apart from obvious reasons, such as individuals in the company don’t have the specific skill set you are looking for or that nobody can be released (which in my view is always debatable), there are a couple of reasons that justify buying from the market rather than looking for a candidate within the team.

The most important are:

  • Expansion 
  • Capability
  • Outside – In
  • Diversity
  • Culture

Let’s start with the easiest one; If your organization is likely to expand in the future, then of course the decision to look outside and buy talent from the market is pretty straightforward. As the company grows, you don’t have to worry too much about the impact on current employees as they will get enough opportunity to grow in an expanding organization. Engro Foods has been a great example of this approach. They continued to recruit people from the market, whilst at the same time they accelerated the career growth of their existing team members over the past 5 years.

A shift in strategy could be another reason to buy talent in the market. If you have concluded that your past strategy will not get you to your future goals, you most likely have to invest in building new organizational capabilities. These capabilities could be anything from specific functional skills or the ‘secret sauce’ that defines your competitive advantage. It is very likely that your current team does not have these capabilities and therefor you will have to look for talent outside. Obvious example are diversified business groups like Nishat and JS that have limited food / agriculture / retail experience are now moving into the food industry.

An external recruit is often brought in to provide an ‘outside-in’ perspective. If your company is like Unilever, then your management positions are mostly filled through talent that has come through the ‘system’. While that has a significant advantage it also implies a number of dangers. Most importantly, that people will think and act alike and not be able to see things from a different perspective. A new recruit will then allow you to bring new ideas to the table.

Related to this is, of course, the business rationale behind increasing the diversity of your talent pool. The biggest stick in the mud is the absence of senior female leaders in our part of the world. We have to make a significant commitment and a huge effort to find and hire (female) talent to increase diversity in the team, helping to ensure we bring more points of view to the organization and with that improve the quality of decision making.

Finally, you can use external recruits in an effort to impact and change the culture of an organization. Of course no ‘one-man’ can change a culture, but as long as the person is appointed in a position of influence and is supported by the power structure in the organization, there is opportunity for change. This will only work if your external hiring is one of the elements of an overall cultural change program, in which current employees are also guided in what is expected of them and what is in it for them (but that brings up the topic of change management and that will require a few future blogs!)

So keep on hiring but make sure it is for the right reasons!

– Paul Keijzer

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9 thoughts on “Better Buy

  1. I agree with Paul. That creates healthy environment & promotes competition…Diversification of culture immensely increases value of organization resulting in improved performance at individual as well as group level. And when it comes to organizations in Pakistan, we are very weak at Teamwork… individually we are among the best…

    • Thanks for the comment Shahzad. It is all about how you get the best individuals to work together as a team. Will certainly cover this topic sometime in the future

  2. Whether promote a team member or hire from talent market, objective should be very clear and that is, best candidate get promoted. This single massage can change the performance of entire team, true leaders engage their team challenging each other to get the title of “Best Available Candidate

  3. Hundred percent agree with Shahzad, on the other way it is also enhanced the educational & professional intellect at society level…

  4. Totally agree with the sensible and interesting stuff shared by Paul.
    As rightly said by Shahzad, now a days we rarely find such Groomed Managers to promote and encourage the right candidate (within their team or within the company itself).

  5. In America the average time spent with one company has reduced from 30 years in the ’80’s to on average 3 years of service with one company now. When they ask employees why they jump from one company to another, they state that the organization doesn’t provide them with development opportunities. When they ask companies why they don’t provide these development opportunities to employees the organization says that they can’t because the employee is likely to leave for another company so why would we invest in them. A classic catch 22 situation, that can only be broken by organizations investing in people and make their stay worthwhile.

  6. If you are ignoring a worthwhile person within the organization or have failed to conduct a soild survey for finding the right “ready now” candidate for promotion; you will have it! These capable resources are there almost all the time in almost every company. And when found an opportunity elsewhere, end up doing very well, proving that the decision makers were not capable enough of doing what they really intended to do.

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