Build, Don't Buy: Why the Future Workforce Demands Development over Hiring

 


Introduction

As we all know, global Talent Management is rapidly changing due to its next level. Most of the Organizations relied on identifying and developing talents inside rather than grabbing from outside, which gained a competitive advantage over time. As a result of navigating economic recovery and forward-thinking, organizations would reconsider conventional recruitment-first practices in Sri Lanka.

As per the recent stats, Sri Lanka’s Unemployment rate was 4.4% in 2024 which revealed that there is a serious problem in ground level as mismatch in skills where as per the Department of Census and Statistics (2024), emphasized that there is serious concern that the companies have trouble in allocating people with necessary abilities for the respective position where even sometime they receive large number of applications, sometime at least one applicant would not suitable for a given position. According to the World Bank (2022), about 40% of Sri Lankan businesses cite poorly educated employees as a significant business barrier. These stats show a sizable workforce that is out of step with business demands.

Figure 1 : Unemployment rate by age group and gender – 2024
Source : DCS

As a result of this concern, even large conglomerates have made huge investments in upskilling and educating their current workforce by initiating internal learning academies, which have reduced external hiring and given first priority to internal pipelines. For instance, the HNB School of Banking at Hatton National Bank is an example of how sector-specific training closes skills gaps and fosters loyalty while emphasizing a win-win strategy that has been validated globally by organizations such as McKinsey (2021), also found that businesses that invest in employee development report 25% higher profit margins.

Moreover, Bersin (2019) emphasized that instead of internal talents, if the company focuses more on external talents, the company may have to pay nearly 200% of yearly compensation for a replacement employee. This is unbeatable and unsustainable for 75% of registered Sri Lankan SMEs (SLASSCOM, 2022). Compared to revolving-door hiring, a development-first approach is significantly more economical in terms of reducing attrition, fostering institutional knowledge, and building resilience.

Conclusion

Capability is key to determining the future workforce rather than headcount. Yet Sri Lankan Organizations concentrate on hiring first to a developing first attitude, they will be better equipped to face economic turbulence, retain top talents while gaining succeed in success. However, the question now is how rapidly companies can start investing in people.

References

Bersin, J. (2019) 'The corporate learning imperative', Deloitte Insights. Available at: https://www2.deloitte.com (Accessed: 10 April 2026).

Department of Census and Statistics, Sri Lanka (2023). Sri Lanka Labour Force Survey Annual Report 2023. Colombo: DCS.

McKinsey & Company (2021) 'Reskilling in the age of automation', McKinsey Global Institute. Available at: https://www.mckinsey.com (Accessed: 10 April 2026).

SLASSCOM (2022) Sri Lanka IT-BPM Industry Survey 2022. Colombo: SLASSCOM.

World Bank (2022) Sri Lanka Development Update: Choosing a Sustainable Path. Washington, D.C.: World Bank Group.


Comments

  1. Harshani ArnoldaApril 19, 2026 at 10:18 AM

    Sachini, Given that you've identified internal talent development as a key competitive advantage to bypass this recruitment hurdle, I like to know,
    In the context of the Sri Lankan economy, do you believe the responsibility for narrowing this skill gap lies primarily with organizations through "upskilling" their existing staff, or should the focus be on a fundamental reform of the national education system to better align graduates with business demands?

    ReplyDelete
  2. Nathasha JayamannaApril 21, 2026 at 8:25 AM

    The 40% skills gap cited by the World Bank really highlights why the Buy strategy is becoming unsustainable in the local context. Your point about the replacement cost being 200% of an annual salary is a massive wake up call, especially for Sri Lankan SMEs operating on thin margins. While external hiring brings in fresh perspectives, a development first approach like HNB’s fosters a level of institutional memory that you just can't find on the open market. It’s a powerful argument for treating employees as appreciating assets rather than replaceable costs.

    ReplyDelete
  3. Nimesha EkanayakaApril 21, 2026 at 10:00 AM

    The article provides a clear and evidence-based discussion on why employee development is more effective than external hiring in the Sri Lankan context. It uses relevant statistics to highlight the skill gap issue and strengthens the argument with practical solutions such as training and internal talent development. The topic is highly relevant to current workforce challenges and offers valuable insights for organizations. However, including more real-life examples and simplifying some sentences would further improve its clarity and overall impact.

    ReplyDelete

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