Talent acquisition and management: build or buy
- What buying costs over building
- $25,500
- Salary paid while the external hire ramps, at half productivity
- $22,500
- Buy: external hire plus ramp
- $52,500
- Build: development plus backfill
- $27,000
Every figure on this page is computed from the inputs entered, by the method stated below it. Ninebix publishes no rating rule, no pay benchmark, no replacement-cost rate and no time-to-fill figure: the counts and the assumptions are yours, and the defaults are a worked example to replace with your own figures.
The figures above start from a worked example ($25,500). Change any input and the answer updates as you type.
Download the Talent acquisition and management: build or buy worked example (CSV)
This is a build-or-buy worksheet for one role, for the HR lead deciding whether to hire from outside or promote someone already inside. Enter the salary of the role, your own cost of an external hire and the months the hire would take to reach full productivity, then the development cost of the internal candidate, the months to make them ready and the cost of backfilling their old role, and it returns the salary paid while the external hire ramps at half productivity, the total cost of buying, the total cost of building, what buying costs over building, and the extra months the internal route takes. Every cost and every month is yours; the worksheet publishes no benchmark for hiring cost or ramp time. Free, on the page, no account; the paid plan keeps the decision against the role and the successor it was made for.
Buy: the hire cost plus the ramp
An external hire costs what it costs to find them, your own $30,000 covering an agency fee, interview time and onboarding, plus the salary paid while they are not yet fully productive. At a $90,000 salary and six months to full productivity, counted at half productivity across the ramp, that is $22,500 of salary for output not yet delivered, and $52,500 to buy the role. The half is the worksheet's stated method; the months are yours.
Build: the development plus the backfill
An internal successor costs what it takes to make them ready, your own $12,000 of courses, coaching and cover, plus the cost of backfilling the role they leave behind, your own $15,000: $27,000 to build. The backfill is the cost the internal route hides, and the worksheet puts it on the line so the two routes are compared whole.
The difference, in money and in months
On the worked example buying costs $25,500 more than building, and building takes three months longer, nine months to ready the internal candidate against six for the external hire to ramp. Which matters more is the role's decision: a role that cannot wait buys, a role that can builds. The worksheet works both figures and decides nothing about which the company should do.
Talent acquisition and management: build or buy: common questions
What is the difference between talent acquisition and talent management?
Talent acquisition brings people in from outside; talent management develops and places the people already inside. The build-or-buy worksheet sets the two against each other for one role: the cost and ramp of an external hire against the development and backfill of an internal successor, from your own figures.
How much does an external hire cost?
Whatever yours cost last time: the worked example uses $30,000 for the agency fee, interview time and onboarding, and adds the salary paid at half productivity during a six-month ramp. Enter your own figures and the cost of buying recomputes; the worksheet publishes no benchmark.
Is it cheaper to promote from within or hire externally?
On the worked example building is $25,500 cheaper and three months slower; on your figures it may be either. The worksheet shows the difference in money and in months so the decision is made on both, and it decides nothing about which the role needs.