Video: Talent Planning and Recruitment while scaling-up in SMEs

Talent Management

Talent Planning and Recruitment while scaling-up in SMEs

When and why should an organization build workforce, buy talent or hire contract workers while scaling-up? Listen to ISB Professor Amit Jain Chauradia for an insightful take.

The most pertinent question a leader and the organizations face when they want to start and then scale-up is ‘Where to hire the right talent from?’ Is it ok to build your team from scratch, or buy from your competitors with sufficient compensation or will it be based on contracts? The second question which plagues them is does setting up your business decide on the type of talent you will hire?

Changing multi-generational workforce

While the global population in major markets is growing old, India on the contrary is getting younger. By 2020, the average age of China will be 37, US will be 37, Western Europe will be 45, Japan will be 48 -- while the average Indian will be 29 years of age. Firms are not going to have the experience they need, they might not be able to buy but build them.

Corporates have taken measures to face this impediment challenge. For example, Aditya Birla Group has categorically stated that the company will freeze hiring at senior levels and will groom talent from within to take up leadership roles. The idea is to ensure that employees get the opportunity to build their careers within the company. The plan of action for them has already started last year.

But is this the best way to develop novice talent?

The Modern Approach

The Modern approach according to Peter Cappelli in his book Talent on Demand writes is "neither (novice or experience hiring) strategu alone is likely to work, but the choice is not 'make versus buy'. It is 'make and buy'. The modern approach to talent demand, therefore, involves striking balance (between novice and experienced hiring) to strike a balance is a choice, a strategy judgement that differs across organizations and operations depending on internal capabilities."

So organizations need to think about talent in new ways -- striking a balance between developing novice and hiring experienced workforce, and also focusing on management of people which is often ignored even though a company's biggest cost is people so are its biggest competencies. 

There are four ways to strike a balance

  1. Manage demand-side risk: Keep shortage rather than excess of talent
  2. Reduce the uncertainty in talent demand: Shorten or reset talent forecast
  3. Earn a return on investments in developing employees: Having employees invest in their own training.
  4. Balance employee interests by using internal market: Make extensive use of internal job boards.


Where to hire from?

When you look for novice talent - hire from the colleges/off the campus; while experience employees can come from competitors, clients, unemployed market which can also mean undervalued talent, and vendors and independent contractors. With regard to the second point, what is the relationship between revenue and hiring employees from competitors or clients.

Alternative talent pools

Organizations typically employ a combination of full-time workers and independent contractors. And their external talent pool comprises temporary, contractual and part-time workforce, while internal talent pool consists of novice and experience employees. Firms contract knowledge work for two reasons: firstly, to reduce the uncertainty by passing risk to supplier. And secondly, supplier takes risk of securing the needed talent. 

So when do we build, buy, and contract talent?

According to Professor Chauradia, do more novice hiring when you have the capabilities to invest for the long-term, and provide mentorship and training. And you can hire novice when you possess unique technology, competency, or culture in which outsiders may struggle to adapt to. Do more experienced hiring when you are diversifying by opening office in a new location or specialty, require a change in culture. Do more contracting when you need skills quickly in order to scale and need to manage short-term demand.

(This article is curated from the SME Talent Week Virtual Conference Session on 14th February 2017 by Amit Jain Chauradia - Assistant Professor of Strategy at the ISB, Hyderabad)

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Topics: Talent Management, Recruitment, #SMETalent

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