Make vs Buy: Talent Management

Prior to beginning work on this discussion,Read Chapter 3 in Applied Psychology in Talent Management.
View the Minimizing the Cost of Employee Turnover
Keeping in mind the utility theory and optimizing staffing outcome strategies discussed in Chapter 3 of the course textbook, discuss the pros and cons of using existing applicant pools (“making”) or investing in recruitment efforts (“buying”) to expand applicant pools.Which strategies are most costly?
Which might maximize staffing outcomes and why?
Finally, apply these concepts to the real world. Browse various recruiting websites (e.g.,, LinkedIn) and describe the ways organizations attempt to entice What are the similarities? What ways do they try to differentiate themselves?

The pros of the “make” strategy

  1. This option is cheaper because the company does need to recruit new employees.
  2. It supports the organizational community by helping the junior-level employees to learn new skills from the senior employees.
  3. This approach results in leaders that are more knowledgeable about the intricacies of the company as they don’t need more training to familiarize themselves with the culture.

The cons of the “make” strategy

  1. This approach requires an extended period of internal development, assessment, and succession efforts before the company can see any positive results.
  2. It is challenging because it can cause the company to get internally fixated such that the performance of current employees is compared to the previous workforce.

The pros of the “buy” strategy

  1. The company can replace personnel with experienced employees from competitors.
  2. This approach is associated with internal bench strength, a competitive advantage.

The cons of the “buy” strategy

  1. This approach is costly, especially in hiring top and experienced employees.
  2. It can be disruptive if implemented rapidly.
  3. It has a higher level of risk for the leadership staffing decisions.

The “buying” approach is more costly than the “making” strategy. With a making strategy, the company has to account for the advertising fees to reach top talents and hire recruiting teams to run the process. The market value of top-notch leaders might also be extremely high. The “buy” approach maximizes staffing outcomes better because external hires often bring innovation to the company (Jiménez‐Jiménez & Sanz‐Valle, 2005). These outsiders force the company to re-think and assess the suitability of its culture and processes. This approach keeps the existing employees motivated because of potential competition from new employees.

Most applicants research a company before applying for an advertised vacant position. The reputation can either attract top talents or repel them. Currently, most organizations focus on hiring internally instead of bringing in new employees. In recruiting websites, such as LinkedIn, a notable similarity is that most companies create profiles that give additional details on their culture. These organizations also describe the requirements in detail and culture to entice top talents. They also seek to differentiate themselves from close competitors by highlighting their performance management systems and reward processes that most employees may like.


Jiménez‐Jiménez, D., & Sanz‐Valle, R. (2005). Innovation and human resource management fit: An empirical study. International Journal of Manpower26(4), 364-381.

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