Managing IT Talent In The 21st Century: Grow Or Buy?

by drjim on August 14, 2008

IT managers need to find a way to both grow and buy new IT talent

IT managers need to find a way to both grow and buy new IT talent

Hopefully we can agree that the way that IT talent is being managed in most companies is just flat out broken. It’s easy to point fingers and say that a process doesn’t work, it’s much harder to suggest a solution to the problem. Let’s spend some time doing just that – the hard stuff.

Fix Suggestion #1: Make and Buy Talent In Order To Manage Risk

Back in the good ‘ol days of the 1950’s and 1960’s there really was only one source for new talent within a firm – you had to grow it yourself. This growing process took a great deal of time so extensive management development systems were created to track how the next “crop” of talent was coming along. When an opening occurred in the organization, then either a new manager had to be harvested or else that part of the company and it’s associated opportunities had to be discarded.

As you can well imagine, the folks in charge of growing new talent would “plant” more talent early on in the process so that they would never be caught without someone to harvest should the need occur. Back in the day, firms could afford to have more talent than they needed. That doesn’t work today. If you are ready to be an IT leader and the opportunity does not show up quickly, then you are more than likely to walk out the door. Just to make things even worse, the Watson Wyatt consulting firm has done a study that shows that talent that gets trained and then is not presented with an opportunity to use that training will often leave the firm.

So what’s an IT manager to do? Look, it will always make sense to grow your next wave of leaders internally as long as it is cheaper and less disruptive than going outside to get it. However, there is no way that we can grow all of the talent that we’ll possibly need internally. Since hiring from the outside is a much quicker solution as well as allowing you to be more responsive to dynamic business conditions, you really need to be able to use both solutions.

How to go about doing this? The first step is the simplest, stop trying to forecast your IT talent demand with any level of accuracy. Just admit it – you really have no clear idea how many people you are going to need 1, 2, 3 or more years out. This wasted forecasting can be replaced with a different approach: simulations. Simulations won’t provide an 100% accurate forecast; however, it can get closer. What’s even better is that if a simulation shows that the company’s current plan will result in an enormous need for new talent, then the plan can be changed.

Here in the 21st Century the ease with which employees can leave a company means that developing too much internal talent is a much greater risk (and expense) than developing too little. Since you can go outside and hire the talent that you need when your needs exceed your home grown crop, there are four trade-offs that you have to evaluate when filling a position:

  • How long will you need this person? The longer that the person will be needed, the more likely you should be to develop internal talent to fill the position.
  • How sure are you that you really know how long you will need the talent? If you are unsure of upper management’s commitment to the company’s current direction, then you should be less willing to develop internal talent to fill the position.
  • Are Other IT Managers Available To Step In If Needed?: How specialized is the position – are special skills needed to perform the tasks associated with it? Could other IT managers easily step in to fill the position if required or would special training be required?

Now that we’ve come up with a strategy for HOW to fill positions using both internal and external talent sources, the next issue to discuss will be to come up with a way to adapt to the uncertainty that every company has in trying to figure out how much staffing is going to be needed in the future…

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