Article
The Hiring Tech Talent Dilemma Slowing Innovation
In the relentless pursuit of innovation, tech companies hiring face a pressing challenge: How do you keep up with the rapidly changing demands of your industry while ensuring your workforce can meet tomorrow’s needs? The traditional “build vs. buy” dilemma has taken on new significance in today’s tech ecosystem, where the stakes of securing top talent have never been higher.
As industries transform and new technologies emerge almost overnight, companies are forced to decide whether to develop the skills they need internally or recruit seasoned professionals with the expertise required to keep up with the pace of change. This article explores how leaders are approaching this tension, weighing the costs of hiring against the benefits of investing in internal growth and why striking the right balance between the two is critical to success.
The tech companies hiring dilemma: Build, acquire, or both?
The tech industry has long been a breeding ground for innovation and disruption, and in many ways, it remains the gold standard for what the future of work could look like. But with an unprecedented shortage of talent in emerging fields such as Artificial Intelligence (AI), Machine Learning (ML), and cybersecurity, tech companies hiring today are increasingly faced with difficult decisions about how to fill the skills gap.
The traditional “build vs. buy” challenge is anything but straightforward. In high-growth sectors, companies must decide whether they should invest the time and resources necessary to develop talent internally, or recruit experts from the external labor market. For example, in fields with fast-evolving technologies and rapid product development cycles—think semiconductors or AI—finding candidates with the right skills can be a monumental task. External hires are often necessary, given that internal development would require too much time, which most companies simply don’t have.
Yet, this strategy of external hiring can be fraught with complications. Bringing talent from outside an organization may solve immediate skills gaps, but it also introduces the risk of misalignment with company culture or even the practical difficulties that arise from new hires who lack intimate knowledge of the company’s internal systems and practices. Furthermore, the costs associated with attracting and retaining top-tier external talent—especially in high-demand fields—can be steep, often stretching recruitment budgets to their limits.
But what if building internal talent was an option? This brings us to the other side of the dilemma. Many tech executives argue that developing employees from within allows companies to cultivate not just technical expertise but also loyalty, adaptability, and cultural cohesion. However, developing talent is not an instant solution, particularly in an environment where competition is moving fast. Balancing these competing priorities and choosing the right mix of internal training and external hiring will define success for companies looking to maintain their edge.
Hiring or training: What’s the most effective strategy?
In a market where highly specialized skills are in short supply, it is tempting for tech companies hiring to focus solely on acquiring talent. However, this rush to hire seasoned professionals may overlook the long-term advantages of training and developing talent internally. Hiring may offer an immediate solution, but developing internal talent offers a different set of strategic benefits, including greater employee retention, deeper organizational knowledge, and the opportunity to nurture the next generation of leaders within the company.
Take, for example, cybersecurity. As companies across the tech sector grapple with a rising tide of threats, the need for cybersecurity professionals has never been greater. Yet, the scarcity of qualified candidates has made it difficult for many firms to recruit the experts they need. As a result, many organizations are turning to upskilling programs, offering training opportunities to current employees and promoting from within. This allows companies to develop the specific expertise needed for their unique environment while simultaneously cultivating a workforce that is committed to long-term growth within the organization.
However, this model does come with challenges. For one, upskilling programs take time. And in the fast-paced tech world, companies don’t have the luxury of waiting for employees to reach the level of proficiency needed to address the latest technological challenges. Moreover, internal training efforts require significant investment in infrastructure, mentorship, and learning platforms—all of which can strain resources.
While building internal talent can offer considerable rewards, the reality is that many companies are finding it difficult to balance the time and resources required for internal development with the pressure to deliver results quickly. As a result, they are increasingly turning to hybrid approaches that combine the best of both worlds.
Why does tech team hiring process need a hybrid approach?
One emerging strategy among tech companies hiring is the hybrid model—where firms combine both “build” and “buy” tactics to meet their evolving needs. A hybrid model allows companies to quickly secure top-tier talent while simultaneously fostering a culture of internal growth and development. This approach requires companies to be strategic, ensuring that they don’t just hire talent to meet short-term needs but also invest in developing the next generation of leaders and experts.
Leaders must also tackle the “outbuilding” challenge—creating an environment where employees feel empowered to grow and take on new responsibilities. Investing in professional development and mentoring programs helps companies build a workforce that is adaptable and capable of responding to new challenges. As companies adopt this hybrid approach, they benefit from the best of both worlds: external talent to drive immediate progress and internal talent to ensure long-term sustainability.
For tech companies hiring, this dual approach offers flexibility—something that is crucial in today’s fast-evolving landscape. When speed is essential, companies can opt for external hires; when sustainability is key, they can turn to internal development.
The key to staying competitive: Integration of HR and tech strategies
As Benjamin Campbell, Professor, Wharton School of the University of Pennsylvania, and his co-authors point out in their study, a strategic alignment of Human Resource Management (HRM) with technology investment is essential for businesses aiming to stay competitive. Too often, HR and technology teams work in silos, but for tech companies hiring, integrating these two strategies from the top down is crucial.
Campbell’s research emphasizes that the need for external hires often stems from rapid technological changes and short product cycles. In sectors with fast-paced innovation, like semiconductors, it’s more effective to hire talent with the necessary skills, rather than attempting to train employees in-house. Conversely, industries with slower product cycles, like automotive chip manufacturing, can benefit from developing talent over time.
As the pace of technological change accelerates, tech companies must recognize the value of both approaches. To remain competitive, companies must understand when to lean on external hiring to keep up with technological advances and when to invest in internal talent development for sustained growth.
Striking the right balance for long-term success
The future of tech companies hiring lies in finding the right balance between hiring externally and building internal talent. The key to success lies not in choosing one strategy over the other, but in combining both in a way that complements a company’s unique needs, culture, and market position.
In an era of rapid technological evolution, leading tech companies are increasingly adopting a balanced approach to talent acquisition. Recognizing the need for agility and sustained innovation, they are merging the strategies of internal development and external hiring to build versatile workforces capable of meeting the demands of both today and tomorrow. Here’s how some of the most forward-thinking firms are approaching this critical challenge:
Adobe takes a holistic approach to talent management, encouraging employees to pursue further education and skill growth through programs like Adobe Digital Academy. This internal focus is complemented by the company’s commitment to hiring top talent from diverse backgrounds, ensuring a mix of perspectives that fosters creativity and innovation. Adobe’s combination of upskilling initiatives and diverse external hiring keeps it agile in a fast-changing industry, particularly in areas like digital media, AI, and creative software development.
IBM has long recognized the importance of upskilling its employees to keep pace with technological change. The company’s IBM SkillsBuild initiative provides free learning opportunities to both internal and external candidates, helping them develop skills in areas such as cloud computing and AI. Yet, IBM also understands the value of strategic acquisitions to build talent in areas where internal development may take too long or where specialized expertise is urgently needed. This combination of upskilling and external hiring allows IBM to maintain its leadership in cutting-edge technology while fostering a future-ready workforce.
Square’s leadership in digital payments and financial services has been supported by its talent strategy, which blends a focus on internal talent development with a strong emphasis on external recruitment for specialized roles. Square runs development programs to help employees transition into leadership roles, while also seeking new talent from outside for its growing tech needs, such as blockchain and fintech innovation. By striking this balance, Square ensures that it can continue scaling while nurturing internal leadership and technical expertise.
Ultimately, the decision of whether to “build” or “buy” talent should be a dynamic, evolving process. In an increasingly competitive and fast-paced market, the companies that succeed will be those that can adapt their talent strategies to meet both short-term demands and long-term goals. By integrating HR and technology strategies and fostering an environment that supports both external hiring and internal development, companies can stay ahead of the curve and continue to innovate.
For CTOs and IT directors navigating this dilemma, the message is clear: the ability to build a flexible, adaptable workforce will be the defining factor in maintaining a competitive edge in today’s tech-driven world. Whether you choose to hire, train, or both, the right talent strategy is critical to your company’s future success.
In brief
The build vs. buy dilemma is not an either-or choice but a dynamic process that requires thoughtful consideration and strategic planning. As the pace of change continues to accelerate, tech executives must navigate the complex terrain of talent acquisition and development with a long-term view, ensuring they can remain competitive and innovative in a fast-moving, ever-evolving landscape. Whether through external hires, internal development, or a hybrid approach, the future will demand that companies strike the right balance to stay ahead.
