The age-old decision between build it or buy it has been the source of great due diligence and resulted in numerous models that argue one or the other. Similar is the decision to hire or contract for talent. My earlier blog on “Bubble Capacity” supports the argument that contracting for short-term needs, especially when not core to your normal talent needs, is a smart decision. Just as building something comes with sunk costs, hiring must be based on strategy and not a simple reaction to increased resource demand.

Some businesses make a strategic decision to hire for all its personnel resource needs based on building a cohesive culture, or for some other intrinsic reason. Some businesses maximize the outsourcing of personnel for reason of cost or to maintain only what is core to their business. So, when does it make sense to hire, and when does it make sense to contract or outsource to satisfy your businesses talent needs? Let’s consider the Cs:

Of course, this matrix is not all-inclusive, and not representative of every situation. Your company situation may find other advantages and disadvantages. In any case, take time to consider your talent strategy as the world gets smaller and technological change shows no hint of slowing down.