Isn’t this a very familiar topic?  Didn’t all HR magazines at one time or another posted something similiar before?  Wasn’t “Build” the undisputed winner?  Afterall, most sucessful companies today had a strong management trainee program and many senior leaders in these organizations with home-grown.

I’ve once been part of a graduate development program, also once managing one of these developmental programs; fortunate enought to experience seeing from the different angles.  My personal opinion is that these “management trainee”, “management associates”, “graduates hire”, “vitality hires” program may be a thing of the past unless there are major revamp of how the program is being done.

Yes, I agree that all these programs were indeed essential in bringing many organizations to where they are today; and not forgetting the number of great leaders they produce in addition to the strong internal culture.  I’m not denying any of those, but rather I’m with the opinions that time has changed.  20 - 25 years ago, job applications were done manually (mostly advertised via newspaper), let’s take a look at what’s happening today:

• A person can apply to more than 10 jobs at once online (just check out Jobstreet.com), making job application much faster.
• There’s this profession called executive search (or some call them “headhunters”).  Traditionally they may exist for the more senior positions, today the industry has grown so huge that executive search may be used at all levels.  The presence of Internet has also made the search much easier.

The above would have caused higher turnover among employees and therefore many organizations often can’t recover from its initial developmental cost.  The above was only one of the many contributors to why talent building can’t work today.  Now imagine how the growth of the organizations contributed to this too (especially in a developing economy):

• If a company grows at a very rapid speed for the last 5 years, and the requirement for senior managers doubled (assuming from 50 to 100), is the company capable of producing 50 good managers ready to fuel the expansion in the 5 years?  More often than not, the new managers are acquired externally during the rapid expansion.  This is going to cause the internally developed talents to feel uncomfortable and therefore leave the organization prematurely.

Let’s now assume that the organization is able to develop managers quick enough and has the ability to fill the management needs in the last 5 years (or even the last 15 years).  This organization may now be celebrating their “victory” and “proven success”.  Knowing that they found the right formula, the program continues - and the problem begins:

• Does every organization with rapid growth continue growing at such a speed forever?  NO!  Therefore, it may once be feasible for the organization to run a management trainee program to get managers up to speed and fill the positions, but continue running the program and providing high expectations to new joiners even when the organization growth is no longer there may prove counter-effective.  These young executives with high expectations will soon find that their career has stagnated and that they’re moving up the ladder slower than their seniors.  What happens next?  They leave and the organization became a “free training provider” to the industry.

Don’t get me wrong, I’m not saying that developing fresh graduates today isn’t the thing to do.  I’m highlighting the importance of knowing the needs within the organization and ability to project the organization human capital needs before embarking on any high investment talent development programs.  The “industry best practice” may not be suitable for all organizations in the industry.  Sometimes, buying instead of building may provide:

• Better financial returns.
• Innovation (new ideas)
• Competitor’s Mind (I’m not saying that you should spy, but a person hired from competitor may come with some differen insights).
• Fresh energy (don’t you agree that most employee are highly energetic when they’re new on the job?)

And a final point to remember, the corporate world isn’t like the footballing industry in Europe.  If you develop a young Talent like Ronaldo and a competitor wants him from you, they don’t pay you as much as $80million pounds.  I don’t recall hearing employment bond costing several times an employees annual salary in the corporate world (unless there are out there but I haven’t seen them).

Next time, think first before any conclusion is made into building talents from within.  It’s not as simple as organizing a few programs, the more important element than development is motivation, engagement and satisfying the employees intrinsic needs of wanting to stay with the organization.  Questions employee often ask themselves:

• Am I happy here? (What do I think of on Monday?)
• Do I like working with my boss? (Do I tend to hide from him?)
• Do I feel proud being an employee here?  (Am I proud to flash my business card?)
• Do I see a future for myself here? (Developing my skills is one thing, but is there a place to make full use of it?)

Think …

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Tags: build vs buy, graduate, management trainee, talent management

This entry was posted by Clayton J.C Tan on Tuesday, January 19th, 2010 at 12:02 pm and is filed under Economy, Human Resources, Leadership & Management. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.