Buy or build talent

1. The choice, stated plainly

You can either buy talent or build it, in the same way you can buy a company or build one.

	Build	Buy
What you are paying for	Time and training	A skill that already exists
Cost	Lower at the point of hire	Typically higher
Speed to money	Slower	Faster, because the skill is already there
Who pays for the mistakes	You do, while they learn	Fewer of them to pay for

The cost difference is not a defect of buying, it is the thing you are buying. Paying more is what buys the speed; the skill is already there on day one.

And it is the same choice you already make about businesses. You can buy a company or build one, and talent works the same way. How far the comparison runs beyond that is not established on this page.

2. Where the balance shifts

As a company scales it tends to buy more talent than it builds. This is offered as an observation rather than an instruction — not that you have to, only that it is what happens.

The reason given is a limit on what training can reach. The skill it takes to run the finances of a hundred-million-dollar company is not something you would build a training program for. Often what you want is somebody who has already done it, plugged into the seat — rather than somebody learning on your money, which in practice means making the mistakes inside your business while you pay for them.

These sayings carry the same point, and both are given:

• Great lawyers are expensive; cheap lawyers cost a fortune.
• Buy nice or buy twice. It tends to be a buy-nice-or-buy-twice situation.

The trap they name. You may believe that under-qualifying and under-paying somebody is cutting costs. What it is doing is moving the cost, from a bigger wage bill now to a longer, more expensive correction later.

3. The arbitrage that argues for buying

The numbers given for the trade are these:

The claim	The figure
One high-grade performer against an average one	Worth five average ones
What a high-grade performer costs against the market rate	25 percent above market
What you get for that premium	Five times the output

Pay a quarter more and get five times the work: that is one of the largest everyday value-creation opportunities available to any owner, and the case for buying rather than building.

The warrant, carried with its limits. The five-to-one figure is attributed to research, and no study is named. Take it as the rule of thumb it is offered as, not as a measurement you could go and check. And note the figures are about different things: the five-to-one is a comparison between two people, while the twenty-five percent is a premium over a market rate you would still have to establish for yourself. This page gives no figure for the market rate any role should be priced against.

A second reason to pay more: a shorter search. Pay also sets how long the finding takes. If what you will pay stays the same while the next role up needs a stronger person, that person gets harder to find. In an illustration given here, an amazing marketer can probably be found on modest pay, at the cost of talking to 200 people; at triple the salary, it might take 10. A further view adds what the extra buys: ask whether you are paying to get back only your time, or your time and your attention. An experienced, competent hire typically needs no checking of their work, so beyond guidance and a weekly one-on-one they take little of your attention; a cheaper one gives some time back and keeps you thinking about the ball they dropped last time. Paying toward the top of the market for the roles that act as levers is section 2 of SOP 203 — Fix over-expansion, pay, underpricing and a single product.

4. Buying experience rather than potential

Once you are buying rather than building, the thing you are buying is experience, and the rule is stated flatly: hire experience, not potential. You are not looking for somebody who could win; you are looking for somebody who has already won, more than once, doing the exact thing you want done — and you want them to do it with you.

Years of experience beat years of age. Somebody who has been advertising for ten years and started at fifteen is, a lot of the time, the preferable hire over somebody with forty years who only ever reached a certain level, on the grounds that they probably do not have the ability and are not nearly as current. The mirror-image worry is also named: somebody who came from a very large organization and no longer remembers what is new, who is really a manager of people, often does not work out.

The litmus test, and it happens in the interview. They should know more about the work than you do. If you find yourself teaching them during the interview, you have, in the view stated here, already lost. Put positively: if you are not learning from them while you interview them, this is the wrong person. The feeling you are looking for is that they know far more about this than you.

What the rule came out of. One cold outreach operation was tried twice before it worked on the third attempt:

Attempt	Who ran it	Result
1	External to the business, with experience — a consultant	Failed
2	Internal to the business, without experience	Failed
3	Internal to the business, with experience	Worked

The condition that makes the case readable: the difference between the attempts was the person hired to run it, and an outbound team is a people-heavy, operationally complex machine — so the weight the case puts on the hire is specific to that kind of work.

4.1 What you are hiring them to do, and what you still have to supply

The senior hire is not brought in to do the advertising. They are brought in to grow a department around one advertising method or one platform, and to do it without you. These travel with that:

• Stronger incentives. The more of the outcome you want them to own, the more of their compensation is tied to that outcome.
• A division of what is teachable. The craft is what you are buying. Leadership — growing the team around them — is what you can still teach afterwards, and the order matters: you check the craft first, in the interview, and add the leadership later.

The same choice one rung lower. Before there is any department to run, the build-or-buy question shows up as soon as you have maxed out your own capacity and want more advertising than one person can do. The worked move at that stage is narrow and concrete: hire for the specific jobs that eat your hours — somebody to shoot and edit, somebody to run the buying — so that most of the work comes off your plate.

5. Where the routes divide in practice

Situation	Route
Frontline people who will get leads on your behalf	Build — the handover procedure is SOP 43
Director level and up	Buy
A skill neither you nor anyone inside has, that you want to keep	Buy it temporarily to learn it — SOP 45

The handover procedure on SOP 43 is explicitly scoped, by and large, to frontline people getting leads, and director-level positions and up are left out of it. That exclusion is the reason this page exists.

6. What this page does not decide for you

These are gaps in the procedure, not omissions from this page.

• The company size at which buying starts to outweigh building. The shift tends to come with scale; no revenue, headcount or profit threshold is attached.
• How to find the market rate the twenty-five percent premium sits on top of.
• How to tell a high-grade performer from an average one before you hire. The interview test in §4 tests for knowledge of the work; it does not test for output.
• What to do when you cannot afford the premium. The trap in §2 says under-paying costs more later; no alternative route is given for an owner who genuinely cannot pay it now.
• How many roles one owner can buy at once, or in what order.
• Whether the five-to-one ratio holds outside senior roles.

7. The checklist

Question	The answer
Who runs this	You, or whoever owns the hiring decision
The routes	Buy the skill, or build it
Which costs more at the point of hire	Buying, typically
What the extra cost buys	Speed to money
What happens as a company scales	It tends to buy more than it builds
Why training runs out at the top	You would not build a program for a role that senior
The sayings	Cheap lawyers cost a fortune; buy nice or buy twice
One high-grade performer is worth	Five average ones
What a high-grade performer costs	25 percent above market
What that premium returns	Five times the output
A second reason to pay more	A shorter search (an illustration: 200 conversations against 10), and your attention back as well as your time
What you hire for at the top	Experience, not potential
Experience or age	Experience
The interview test	If you are not learning from them, it is the wrong person
The attempts at an outbound team	External with experience failed; internal without experience failed; internal with experience worked
Who the build route is for	Frontline lead-generating people, by and large
Who the buy route is for	Director level and up
The size at which the balance shifts	Not established on this page
The market rate to price against	This page gives no figure for it
Evidence behind the five-to-one	Research is cited and no study is named

8. What this page does not cover

Training somebody you have decided to build is SOP 43. Renting a skill from outside the business in order to learn it, rather than hiring it, is SOP 45, and picking who to rent it from is SOP 46. Costing the payroll of whoever you end up with is SOP 42. Recruiting as a marketing function is SOP 252, and the interview machinery itself — panels, rubrics, group interviews — is SOP 174 and SOP 253.

Compensation structures, equity and contracts are not covered on this page.