Build vs Buy: Why the best solution for talent acquisition problems is workforce development
It’s 10p.m. - do you know where your open jobs are? How about the direct and indirect costs of filling them, especially if they sit open for months?
The U.S. Bureau of Labor Statistics estimates that by 2020, there will be 1 million more computing jobs than workers to fill them. Demand for jobs in data science alone has grown 300 percent over the last four years. Tech skills like cloud computing and user interface design top the list of the most in-demand skills.
It’s a challenge that stems, in part, from the well-documented divide between higher education and the world of work. And the challenge is only accelerating as the shelf life of skills shrinks.
But it may be a gap that savvy employers are well-positioned to bridge, through a paradigm for talent that moves beyond the costly zero-sum game of recruiting -- toward more targeted training investments with the potential to transform today’s employees into tomorrow’s workforce.
Consider the fact that employers now routinely spend up to one-third of a software developer or data scientist’s annual salary in recruiting costs. That can equate to more than $30,000 for an individual employee. In highly specialized fields, the number can exceed $50,000. And as the labor market tightens and churn rates grow, the costs of recruiting and retention also continue to grow.
In contrast, the costs to reskill workers continue to fall. Average tuition for the sort of immersive training programs pioneered by our team at General Assembly now hover at just $11,900. Courses, which run just 12 weeks, utilize industry experts as instructors and a curriculum centered on practical applications of high-demand fields like web development, data science, design, product management, and digital marketing.
More than 12,000 adults, with little or no development experience have re-skilled into tech jobs over the last eight years alone -- at just a fraction of the cost employers will spend to recruit them. Employers are finding that the costs to reskill can be even lower, as the advent of dynamic assessments allow for an even more tailored focus on the specific skills required for a given role or organization.
These are numbers that employers would do well to understand. While recruiting costs continue to grow for employees who already have the skills employers need, they are far lower for job-seekers that have potential -- but haven’t yet developed the most in-demand skills.
What if employers allocated just a fraction of their recruiting budgets toward the re-skilling of existing employees? What if, rather than recruiting employees that already had sought after tech skills, they made the shift toward building - rather than buying - talent? Imagine the equity, if not economic, implications, in an era where underrepresented minorities make up just a fraction of our existing tech talent pipeline.
Disney, among a cadre of employers leading the charge, sought to address a gender imbalance in its tech workforce with the launch of the CODE: Rosie program. Through a combination of basic training and six-month apprenticeships, Disney employees who are women or non-binary in non-tech roles can switch careers and join one of the company’s fast-growing technical teams. Rosies, as they are called, learn about their potential roles firsthand and build lasting relationships with more experienced engineers -- and can transform their career prospects by gaining experience in the most relevant digital skills. In just a few years, Disney has begun to establish a talent pipeline that is both sustainable -- and proprietary.
Of course, Disney is just one example of how a growing number of companies are rethinking their approach to talent. Companies like Booz Allen Hamilton, Calvin Klein, and L’Oreal are now collaborating on the creation of ‘standards boards’ to inform the development of assessments tailored to the real-world demands of data scientists and digital marketers. Together, they’re establishing a foundation for radical re-skilling, by creating a consistent and predictable framework for identifying skills gaps, and enabling training providers to develop faster, cheaper pathways toward skill development.
Although the rising costs of recruiting -- and innovations in training -- have made the economic imperative for re-skilling more clear, change is never simple or easy. Even the most nimble businesses grapple with the complexity of shifting budgets, and the organizational challenges inherent in tackling old challenges in new ways. Recruiting and development functions are often mired in reporting structures geared toward yesterday’s challenges -- and opportunities. But while challenges abound, employers are, increasingly, well-positioned to play a leading role in addressing skill and equity gaps that limit growth and competitiveness. Which is good news, because their future and the future of the American workforce as a whole depends on it.