Why Buying Talent Is Losing to Building Capability

Jessica Brown Ph. D
Jan 14
4 min read

The talent market didn’t tighten.

It changed the rules.

For years, organizations responded to capability gaps with the same reflex: hire more people. New roles. New titles. New headcount.

Today, that strategy is breaking down.

Despite record hiring investments, many leaders are still asking the same question:

Why do we have more people—and yet feel less capable?

The answer isn’t effort or intent. It’s that the game itself has changed.

The New Reality: Headcount ≠ Capability

Hiring alone no longer guarantees performance.

According to McKinsey, 87% of executives report existing or anticipated skills gaps, yet only a fraction believe hiring will close them. Skill lifecycles are shrinking, technology is reshaping roles faster than job descriptions can keep up, and organizations are carrying roles designed for a world that no longer exists.

In many cases, hiring more people actually creates new complexity:

Longer ramp-up times
Fragmented knowledge
Increased coordination costs
Greater dependency on a tight labor market

Meanwhile, the work itself keeps evolving.

Skills, Not Roles, Are the New Currency

Roles are static by design. Skills are not.

The World Economic Forum estimates that 44% of workers’ core skills will change within five years. That means organizations built around rigid roles are constantly behind the curve.

CEOs who are pulling ahead have embraced a different lens:

What capabilities do we need—not just this year, but next?
Where can those capabilities be built internally?
How do we redeploy talent faster than the market can move?

This shift—from roles to skills—isn’t theoretical. It’s already separating leaders from laggards.

Case Study: AT&T’s Billion-Dollar Bet on Capability

Facing massive technological disruption, AT&T realized it couldn’t hire its way into the future.

Instead, the company invested over $1 billion in reskilling and upskilling, launching internal learning platforms and clear skill pathways tied to future roles. Employees were given visibility into emerging skill needs—and support to build them.

The result:

Thousands of employees transitioned into future-ready roles
Reduced external hiring pressure
Stronger retention in critical capability areas

AT&T didn’t just fill roles. It rewired its talent engine.

Why “Buying Talent” Is Losing

Hiring will always matter—but as a primary strategy, it’s becoming riskier and less effective.

1. The Market Moves Faster Than Hiring Cycles

By the time a role is defined, approved, filled, and onboarded, the required skills may have already shifted.

2. External Talent Doesn’t Equal Internal Readiness

New hires often arrive with expertise—but lack context, relationships, and institutional knowledge. Without strong development systems, performance lags.

3. Retention Suffers When Growth Isn’t Visible

LinkedIn’s Workplace Learning Report shows employees at companies with strong learning cultures are nearly twice as likely to stay. When development stalls, attrition rises—especially among high performers.

The Performance Case for Building Capability

Organizations that prioritize development don’t just retain talent—they outperform.

Deloitte found that organizations with strong internal mobility are 2.3x more likely to outperform peers
Gallup reports teams that receive ongoing development support deliver 21% higher productivity
Harvard Business Review notes that learning-driven organizations adapt faster during disruption

Capability compounds. Hiring does not.

Case Study: Unilever’s Skills-Based Talent Marketplace

Unilever shifted away from traditional role-based progression toward an internal talent marketplace focused on skills.

Employees could apply skills to short-term projects across the organization, building experience while meeting business needs.

The impact:

Faster redeployment of talent
Increased engagement and retention
Reduced reliance on external hiring

The organization became more agile—not by adding people, but by unlocking potential already inside.

What Leaders Must Rethink Now

The shift from buying talent to building capability requires leadership evolution—not just HR programs.

1. Redefine Success Beyond Headcount

Stop asking: How many people do we need?

Start asking: What capabilities must exist for us to win?

2. Make Skill Visibility Explicit

Employees can’t build what they can’t see.

Best-practice organizations:

Define critical future skills
Map them to strategic priorities
Make pathways transparent

3. Reward Learning Agility

Performance systems often reward mastery of today’s role—not readiness for tomorrow.

Shift incentives toward:

Skill acquisition
Cross-functional contribution
Continuous learning

4. Equip Leaders to Develop—Not Just Direct

Gallup research shows only 1 in 10 managers naturally excel at developing others.

That means development must be taught, reinforced, and expected—not assumed.

Case Study: Amazon’s Relentless Focus on Capability

Amazon’s leadership principles emphasize learning, experimentation, and adaptability.

Through programs like Career Choice, the company invests heavily in employee skill development—even for roles that may not directly benefit Amazon long-term.

Why? Because adaptability at scale requires confidence, capability, and trust.