Employees are an organization’s greatest asset. Without a community of dedicated workers, your business can’t thrive — regardless of how fantastic your solution is. Plus, maintaining a diverse and high-quality workforce can be a major competitive advantage. 

Research-backed data demonstrates that business leaders recognize how talent drives business performance. Globally, 48 percent of corporate leadership says their management team fully recognizes the connection between human capital and business performance. With this in mind, another 48 percent say they plan to expand employee engagement programs in an effort to further accelerate their companies. 

We know that talent drives performance. But the question still remains, how do you cultivate top talent within your organization? Is it a matter of hiring external workers or developing talent within your company 

Even the largest companies with countless resources and robust people processes still struggle to answer this question and put it into practice. In this article, we break it down piece-by-piece.

Although you’re likely already familiar with these terms, it’s still important to distinguish the difference. Let’s begin with a brief refresher.

Talent acquisition and talent development are both vital people operations that must coexist within an organization. Each strategy functions to support a culture of engaged and highly skilled workers within an organization. But in practice, these two strategies look very different. 

Talent acquisition works through a process of scouting, recruiting, selecting and onboarding new employees. The idea with talent acquisition is to find new job candidates who have the skills and experiences needed to fill a new role within a company. 

Talent development refers to the processes put in place to train, engage, motivate and retain current employees. This also means equipping employees with the tools they need to build upon specific skills needed to succeed in their current role, as well as future positions. 

When evaluating your current people strategy, it’s important to understand the advantages of looking outside your organization for top talent.

At a high level, talent acquisition is an effective approach for: 

The true cost of talent acquisition depends on a number of factors, including the size of your business, industry, the time it takes to fill a position and which technologies you use to source job candidates. A 2022 study from SHRM estimates an average cost of $4,700.

Let’s briefly review the key advantages of developing and hiring existing employees:

Similar to acquisition, the cost of developing talent is largely dependent on factors that are unique to your organization. Employee learning and development programs come in many forms — some more costly than others. A 2020 report by Training magazine found that for large companies the average cost of training and developing an employee was $581 per employee.

As with many business challenges, there’s no quick-and-easy solution. The short answer is that your organization should be focused on both, with an emphasis on developing employees. Here’s why.

People teams can’t function without either acquisition or development. When evaluating your approach to talent management, you don’t have to choose one or the other. Both of these strategies are integral to cultivating a highly-skilled and productive workforce. 

However, many companies rely heavily on external recruitment and often overlook the advantages of developing internal talent. Recruiting quality employees in a competitive market can be an expensive process and does not mitigate the need for learning and development initiatives.

In many cases, it’s far more cost-effective to promote talent from within and facilitate a culture of learning which contributes to the long-term trajectory of your business. Doing so also improves retention and allows you to plan for the future by enabling employees to grow the in-demand skills needed to fill future internal positions.

Plus, having a robust talent development plan can actually fuel your recruitment efforts — 1 in 5 job-seekers are looking for professional development opportunities in a new position. 

For these reasons, consider prioritizing talent development and the upward mobility of your current employees alongside your talent acquisition efforts. Doing so can save your company resources and will help to build a community of dedicated and engaged employees. 

Ready to upgrade your employee development strategy? Download this 5-step guide on how to rapidly reskill your workforce.