As a company shifts from startup to large and successful, nearly every aspect changes in some way. That being said, the core strategies related to whether to harness internal vs. external talent remain the same. It’s important to your success as a company to define your approach to making this decision.
Factors Related to This Decision
One way to attain your goals is to use talent to meet the needs of your company. If you can’t do this well, you will probably struggle, and your growth may stall and even stop.
When determining whether to use internal vs. external talent, most business owners who are just getting started believe that it’s best to use internal talent and don’t even think about bringing in external talent. Startups typically do not have the ability to perform all roles well. Their focus should be on understanding and nurturing their strengths and filling in the gaps with external resources.
You can and should be using both internal and external talent. When you’re trying to decide whether to use internal vs. external talent, it’s important to consider whether your need is a short-term one or a long-term one. Try to determine if the need will last for more than a year or if it will be solved quickly- if it’s the latter, you may not want to use your time and money hiring someone new.
You should also consider whether or not you will be able to obtain top talent in the industries involved with your company. Also, keep in mind that externalization does not have to be permanent. However, while hiring someone new is a risk, when you externalize a task to someone who is experienced, you increase the chances that the job will be done properly. If you believe that acquiring talent will take you a while, you can externalize some critical functions temporarily so that they will be completed properly while you continue to look for the right person for the job.
Internalizing Does Not Equate to Success
It’s important to note that startups and smaller companies spend a lot of time hiring new employees because they believe that more employees equal a greater chance of success. However, when you externalize tasks, you can get experts in any field, which positions your company as agile, adaptable, and effective.
Externalizing allows you to harness a diverse skill set at any time to gain the flexibility to scale your teams and overall abilities. In most cases, a company that chooses to externalize has a higher profit margin and more time to invest in high-value activities.
When you fully internalize critical functions, it can be dangerous. Hiring for a new role is a calculated bet and you risk loss. However, by blending internal vs. external talent, you increase your odds of success than if you were to strictly utilize internal talent.
Balancing internal vs. external talent shows that your company is mature and knows how to manage finances. By accessing your business model to determine where you can externalize, you can focus on internalization where it matters. While it’s true that external talent can’t help you build your leadership or secure talent for long-term needs, it does give you the space to focus on what your internal teams are made for.
Tips for Making Your Decision
When you are deciding whether you should internalize or externalize, it’s important to keep a few things in mind:
- Figure out what you need to get done
- Determine what success looks like
- Determine how a specific project may impact your company
- Map out internal resources that can support the project/function
- Use critical thinking to determine where the gaps are that could increase the risk of not reaching your goals
The truth is, it really doesn’t matter whether you decide to internalize or externalize, taking a step forward is a leap of faith. By externalizing tasks, you can bring in top talent, which boosts your chances of increasing your revenue and growing your company. On the other hand, if you internalize, you develop your internal talent.
If you need help determining whether you should use internal vs. external talent, contact Hemmingway Financial Group. We can help you with this critical decision so that your company benefits.