Through 2020, businesses across the world faced unprecedented challenges related to the global pandemic. COVID-19 fractured workforces, limited productivity, and hampered companies’ outputs. While the far-reaching effects of the pandemic remain a concern for businesses, many are determining the most effective and sustainable methods for rebuilding their workforces.
The concept of “build, borrow, buy” examines each respective strategy to fulfill staffing and talent recruitment needs, and the pros and cons of each in different business situations. Staffing needs are unique to each organization, but in 2021 and the coming years, properly managing the acquisition and retention of talent will require an even more strategic approach.
What is Buy, Borrow, Build?
Buy, borrow, and build are the three different approaches that an organization can take to staff their organization.
- Buy: Buying talent is the approach where an organization brings in an outside hire to permanently fill a staffing need. This is the most traditional staffing approach and one that most hiring managers think of first.
- Borrow: Borrowing, as one might expect, is a temporary measure where an organization fulfills their needs with the use of “fractional talent”. This includes temporary staffing, freelancers, contractors or consultants.
- Build: Building talent focuses on fostering talent from within by working with current employees to expand their skill sets, empowering them to take on a new role within the organization. This strategy involves hiring entry-level or inexperienced staff and “upskilling” them.
There are pros and cons to each of these approaches to hiring, and a variety of factors will determine the optimal method for any given business. Below, we’ll examine the individual benefits of build, borrow, buy, and take a closer look at some of the reasons an organization might want to choose one method over another.
When using the buy strategy, an organization looks to bring in experienced talent from outside of their current pool of employees on a full-time, permanent basis. This often happens in cases where more senior-level employees are needed or employees who bring specialized skills and experience. There are a number of reasons an organization might want to employ the buy method. Perhaps they’re expanding their products or services and need a new specialist to market them or have to expand their sales team in order to successfully make their new venture profitable. Another benefit of the buy strategy is that bringing in a new, outsider’s perspective can be very healthy when it comes to improving various processes and overall productivity.
Benefits of the “buy” strategy include:
- Fills more specialized, senior roles
- Relatively speedy hiring (as compared to “build”)
- Builds the competence and knowledge base of the organization
- Brings new perspectives
- Expands the skillset at your organization
- Mitigates burnout, overwork, and overtime
- Brings new leadership styles and philosophies
Like the borrow strategy, this method helps businesses to get the exact type of talent they need for their given situation. But more similarly to the build method, the key is to make these employees a “permanent” part of the workforce.
The potential downside of the buy strategy tends to be in its cost. Consider a company that suddenly needs a new, experienced salesperson. Employees like these are always in demand, and the organization will likely need to be very competitive with salary and benefits offerings to land and retain this salesperson. Additionally, it can take some time for outside hires to acclimate to the company culture, and some current employees may prefer to see a promotion from within. With that said, virtually all organizations will have to use this strategy at some point—even those who place a strong emphasis on building talent and promoting from within.
Potential downsides to the “buy” strategy include:
- Higher upfront costs
- Competing in the open market for talent
- More time to acclimate to company culture
- Training and orientation costs
Take the Quiz: Buy, Borrow, or Build? Which Strategy is Right for Your Business?
Different roles require different staffing needs, and it can be difficult to know where to start. Take our 8-question quiz to help you determine the best staffing strategy for your organization’s needs.
Borrowing talent is an approach that many organizations can leverage. It’s often the case that a business situation will arise in which a distinct set of skills is required for the task at hand, and when this happens, it might be a one-off or otherwise temporary situation where hiring or developing a full-time employee to do the job doesn’t make sense from a cost-benefit perspective. Taking on a freelancer, contractor, or consultant immediately delivers a business the skills they need, and only for as long as said skills are needed.
Additionally, certain businesses might have busy and slow periods throughout the year. For organizations seeing this pattern, it might make the most sense to take on temporary or part-time employees to support this increased demand in the business. This flexible staffing arrangement means you have the talent you need when you need it without making an on-going commitment. Taking part-time employees or contractors on temporarily, in many situations, allows businesses to use their time and financial resources most efficiently. The premise of the borrow method is that an organization has access to the exact skills they need, for the exact amount of time they need.
Potential benefits of the “borrow” strategy include:
- Fulfills work and skill demands with little to no recruiting effort for the host employer
- Investment is limited to the specific needs of the business
- Provides a “talent on-demand” approach
- Accommodates the ebb and flow of productivity demands
On the other hand, contract workers or consultants may have a higher hourly cost than developing employees in-house or taking on a permanent employee because a staffing firm, agency or consultancy is supplying that talent. Another consideration is the relationship between the “host employer” and the staffing supplier who is typically the employer of record. Because of the shared control over the nature and conditions of the work being performed, both have liability in the employment relationship. It’s important to choose your staffing partner carefully with this shared liability in mind.
Potential drawbacks of the “borrow” strategy include:
- Difficulty training quickly
- More turnover due to the “temporary” nature of the work
- Impacts to company culture and morale
- Legal concerns
When a company takes the approach of building talent, they’re making an investment in their own employees. They’re investing time and resources into expanding the skillset of a team member, and down the road, anticipating they’ll have the payoff of a more skilled, productive, and oftentimes, happier employee.
There are many benefits to taking this approach. When employees see that their employer is willing to invest time and resources into their skills, it tends to have a very positive effect on morale, productivity, and retention. Additionally, keeping this entire process in-house can be a much more cost-effective way to ultimately obtain the talent an organization needs when compared to the strategies of buying or borrowing talent. In the ideal ‘build’ situation, employees are empowered with skill sets that make them more valuable, and the employer has found a financially optimal way to fulfill its needs—a win-win outcome.
Potential benefits of the “build” strategy include:
- Familiarity with company policies and systems
- Gives workers a career trajectory
- Positive effect on morale, productivity, and retention
Conversely, taking the approach of building talent can take much more time than that of buying or borrowing. If an organization has pressing staffing requirements that simply don’t allow them to take the time needed to train and develop their current employees, then building talent may not be the optimal approach, as it’s often the slowest.
A build approach is most effective when an organization is able to reasonably predict its future staffing needs ahead of time. This can be difficult depending on the industry, but this foresight is extremely helpful in developing an effective build strategy. Even if the build approach isn’t used for filling all staffing needs, successful companies tend to have a focus on investing in and developing the skills of their current workforce.
Potential drawbacks of the “build” strategy include:
- Time intensive (as compared to “buy” and “borrow” strategies)
- Hard to anticipate demand in some industries
- Lack of outside perspectives
- Difficulty adapting to new roles and responsibilities
- If attention isn’t placed on retention strategies, your investment in training and development could literally walk out the door.
Buy, Borrow, or Build: What’s Right for Your Organization?
It’s important to keep in mind that all three of these methods to fulfilling your staffing needs are important, and each has its own different benefits. It’s more than likely that your organization has, or will need to utilize all three of these strategies at different points in time, for different types of roles.
It can be difficult to predict your exact staffing needs, even looking months into the future. If your organization needs assistance finding skilled, qualified workers, reach out to TERRA Staffing Group today. As your organization moves forward, our goal is to be your partner in developing the workforce that will fulfill your needs. We provide pre-screened workers that are tailored to your business’s specific needs.
For more information on best practices when it comes to essential staff in the wake of COVID-19, check out our resource center. Whatever the circumstances are, TERRA Staffing Group is here to help you get the most out of your workforce.