For most of my career in procurement, I learned to ask one question about any expense above a certain threshold: make or buy. Build the capability inside, or contract for it.
We applied that question to software. To logistics. To maintenance. To packaging. To consultancy. We applied it to almost everything.
I cannot remember a single conversation in which we applied it to hiring.
Not in any of the companies I have worked for. Not in any of the procurement organizations I have run. The one strategic decision we never made consciously was about the function that buys the single most expensive resource the company owns — its people.
And it shows. In every senior search that takes eleven months. In every candidate who quietly stops returning the recruiter’s calls. In every hiring manager who gives up and goes through their own network instead.
The failure is not the recruiter. The failure is that no one ever decided what the recruiting function was supposed to be.
The question we asked about everything except people
Make-or-buy is not a technique. It is a habit of mind. A procurement organization that is working well applies it almost unconsciously, dozens of times a year, to questions of where capability should live.
Should we run our own fleet or contract it out? Should we keep this manufacturing step in-house or source it? Should we build this software or license it? Each of these is a make-or-buy decision, and each one gets made deliberately, with a model behind it.
The discipline rests on a simple insight. Different kinds of work have different optimal structures. High-volume, standardized, predictable work usually wants to be built inside, where you can drive cost down through scale. Specialized, episodic, high-variance work usually wants to be bought outside, where you can access expertise you could never justify keeping on payroll.
This is not controversial. It is the most basic move in the procurement playbook.
Now hold that insight against how companies acquire talent. The function that hires a warehouse team of two hundred and the function that hires a Chief Technology Officer are, in most large corporates, the same function, running the same process, measured by the same metrics. One model, for two kinds of work that could not be more different.
We would never accept that anywhere else in the business. We accept it here because we never decided otherwise.
Two failure modes, one diagnosis
The frustration with corporate hiring usually gets expressed as a complaint about people. The headhunter who sends irrelevant candidates. The internal recruiter who is slow and disengaged. The argument I want to make is that both of these failures are predictable from the model, not from the individuals. Change the people, keep the model, and you will reproduce the failure.
Consider the external recruiter first.
The contingent search model pays the recruiter only if a placement is made, usually as a percentage of first-year salary. This structure is not neutral. It rewards speed over fit, volume over precision, and the candidate who will accept over the candidate who is right. A recruiter paid this way is behaving rationally when they push to close. The incentive is doing exactly what it was designed to do. It was simply designed for a different problem than senior strategic search.
Now consider the internal recruiter.
Here the failure is the mirror image. The external recruiter fails because of how their commission works. The internal recruiter often fails because of how their incentives don’t. In many corporates, the in-house talent acquisition team is measured on time-to-fill, requisitions closed, and cost-per-hire. None of those metrics reward the patient, relationship-heavy, judgment-intensive work that a senior search actually requires. An internal recruiter who spends three months cultivating one passive candidate for a critical role looks worse, on the dashboard, than one who fills four operational roles in the same window.
Notice what both diagnoses have in common. Neither is about effort, talent, or care. Both are about a structure asking people to do work the structure was not built for. The external model is built for episodic transactions and applied to relationships. The internal model is built for volume throughput and applied to strategic judgment. Both are good models. Both are pointed at the wrong target.
This is the part worth sitting with: a competent HR leader already knows this. The people inside these functions feel the mismatch more acutely than anyone. The problem was never that they failed to see it. The problem is that the decision about what the function should be sits above them, and it was never consciously made.
The function no one designed
Ask a senior leader how their talent acquisition function came to be structured the way it is, and you will rarely get an answer that involves a decision. You will get a history.
The function grew. It was centralized in one reorganization and partially decentralized in the next. It absorbed a recruitment-process-outsourcing contract at some point, kept some of it, unwound the rest. It was shaped by an applicant-tracking system bought a decade ago that quietly encoded a particular way of working. It inherited metrics from an era when the dominant hiring challenge was operational volume.
At no point in this history is there a moment where someone asked the make-or-buy question across the whole function and designed the answer on purpose.
The inherited structure is optimized for volume hiring because volume hiring was, for most of corporate history, the dominant problem. Filling the graduate intake. Staffing the new site. Replacing predictable attrition. These are real challenges and the in-house model genuinely serves them well.
But the strategic layer — the small number of senior, scarce, high-consequence hires that disproportionately shape the company’s future — was never designed for. It was simply handed to the same machine, because the machine was there.
The strategic taxonomy
If you do apply the make-or-buy discipline to hiring, you find not one category but three. Each wants a different model.
Operational hiring. High volume, well-defined roles, large candidate pools, predictable cadence. Warehouse staff, call-center teams, graduate programs, frontline operations. This work has genuine economies of scale, and it usually wants to be built inside — an efficient, well-tooled internal function that drives down cost-per-hire and time-to-fill. For this category, the metrics most corporates already use are exactly right.
Professional hiring. Mid-volume, specialized roles requiring real assessment but drawing on reasonably deep markets. Engineers, analysts, managers, specialists. This work is a hybrid. An internal team that knows the business, supported by external specialists where a particular market is tight or a skill is scarce. The model is a partnership, and the metric shifts from pure speed toward quality-of-hire and retention.
Strategic hiring. Low volume, senior, scarce, high-consequence. The roles where a single decision moves the trajectory of a function or the company. These are not a faster version of professional hiring. They are a different activity. The work is relationship underwriting, market mapping, patient cultivation of people who are not looking, and judgment about fit that no scorecard captures. For this category the right model is almost always bought — a genuine retained partnership with someone whose entire craft is this kind of search — or, rarely, a deliberately built internal executive-search capability that is staffed, measured, and protected completely differently from the volume function.
Most companies use one model — the operational one — for all three. They run professional hiring as if it were operational, and strategic hiring as if it were professional. The result is the eleven-month search, the disengaged candidate, the hiring manager retreating to their own network. Not because anyone failed. Because the model was never matched to the work.
What this means for the C-suite
The reason this is a board-level question and not an HR-operations question is that fixing it requires two functions that rarely design together: the CHRO who owns the talent function and the CFO who owns the discipline of make-or-buy. Three moves, none of which requires a transformation program, all of which could begin within ninety days.
One: segment the requisition base. Take a year of hiring and sort every role into the three categories. Most organizations have never looked at their hiring this way and are surprised by what they find — usually that a small number of strategic roles consumed a disproportionate share of frustration, time, and cost, while being run on a model built for the operational majority.
Two: split the metrics. Stop measuring strategic hiring with operational metrics. A retained senior search should never be graded on time-to-fill. It should be graded on quality-of-hire and the durability of the placement two years on. The single act of giving strategic hiring its own scorecard does more to fix it than any process redesign, because it stops punishing the right behavior.
Three: make the make-or-buy call explicitly, once, for each category. Decide, on purpose, what is built inside and what is bought outside — and resource each accordingly. This is the decision the company never made. Making it consciously, even imperfectly, is a step-change improvement over inheriting it by accident.
None of this is exotic. It is the ordinary procurement discipline the company already applies to its logistics and its software, finally turned toward its most expensive acquisition.
Key Takeaways
- Companies apply a make-or-buy discipline to nearly every significant expense — software, logistics, maintenance, consultancy — but rarely to the function that acquires their people.
- Both common hiring failures are structural, not personal. External recruiters are pushed toward speed and closure by the contingent-fee model. Internal recruiters are pushed toward volume by time-to-fill and cost-per-hire metrics. Both models are sound, and both are aimed at the wrong target when applied to senior search.
- Most corporate talent-acquisition functions were inherited, not designed — optimized for the high-volume hiring that historically dominated, then used unchanged for strategic search.
- Hiring is not one activity but three: operational (build inside), professional (hybrid), and strategic (usually buy, or a deliberately separate internal capability). Most companies use the operational model for all three.
- The fix is a board-level partnership between the CHRO and CFO: segment the requisition base, split the metrics so strategic hiring is never graded on time-to-fill, and make the make-or-buy call explicitly for each category.
- The deepest problem is not that hiring is done badly. It is that no one ever decided what the hiring function was supposed to be.
The most expensive supplier you do not manage
Every procurement leader knows the discipline of supplier management. You segment your supply base. You treat strategic suppliers differently from transactional ones. You build deep relationships where the stakes are high and run efficient transactions where they are not. You would never manage a critical, scarce, high-consequence supplier with the same process you use for office stationery.
Your talent acquisition function is a supplier. It is the supplier of the single most expensive and most consequential resource your company acquires. And in most organizations, it is the one strategic supplier no one ever segmented, designed, or consciously managed.
The recruiters are not the problem. They are doing skilled work inside a structure no one chose. The question for the C-suite is not how to make them faster. It is the question procurement asks about everything else, and has somehow never asked about this.
Make, or buy?
It is time the company finally decided on purpose.