Companies with a firm financial footing are more likely to grow their own workforce by developing employees internally. At the same time, younger organisations dealing with fluctuating workloads often turn to external hiring to bridge skills gaps, according to a new study from USF.

This “build or buy” approach to talent management forms the core of recently published research in Human Resource Development International, co-authored by Amit Chauradia, an assistant professor of instruction in the School of Management at the University of South Florida’s Muma College of Business.

Working alongside scholars from the University of Cincinnati and the Institute of Management Technology Hyderabad, the research team examined the conditions under which organisations invest in training and mentoring their own employees versus recruiting experienced professionals from the labour market. The former approach is described as a “build” strategy, while the latter involves “buying” talent to meet immediate organisational needs.

Chauradia explained that the findings challenge common assumptions about workforce development. Rather than being driven primarily by company culture or managerial preference, talent decisions are shaped by an organisation’s internal resources and the degree of uncertainty it faces. Firms with greater capacity are better positioned to invest in long-term development, while those operating in volatile environments tend to prioritise quick access to expertise.

The researchers analysed data from 174 large US law firms collected over eight years. Their results showed that organisations with higher revenues and a deeper pool of senior professionals were more inclined to nurture junior staff through structured training and mentorship. In contrast, firms experiencing sudden surges in demand or unpredictable workloads frequently opted to recruit seasoned employees from outside in order to respond swiftly to client needs.

Beyond explaining why companies choose different talent strategies, the study offers practical guidance for human resources leaders. It suggests that workforce planning should balance long-term growth objectives with short-term operational realities, recognising that hiring and development choices have lasting effects on organisational performance.

Chauradia noted that these decisions function as strategic tools rather than routine administrative actions. How a company chooses to source and develop talent influences not only its present capabilities but also its future competitiveness in the marketplace. The research further highlights the importance of mentoring capacity, showing that organisations with sufficient senior leadership available to coach younger employees are far better equipped to sustain an internal development model over time.

More information: Amit Chauradia et al, Talent hiring strategies: when do firms build versus buy their human capital, Human Resource Development International. DOI: 10.1080/13678868.2026.2622070

Journal information: Human Resource Development International Provided by University of South Florida