Link to full answer thread: http://www.quora.com/Why-
My firm does compensation consulting and we often discuss the following with our clients regarding growing their staff and expertise. BUY-BUILD-LEASE
Buy: Bring in experienced expertise, usually at higher than market rates. Ensure that these people know they not only need to build the company, but they will need to contribute to building staff.
Build: Bring in inexperienced potential expertise. Usually at lower than market rates. put a ton of effort into extracting these people’s potential to make them even better than you “bought” experts. Teach them your processes, cultures and more. The more the learn “your ways” the more valuable they become to you and relatively less value most have the competitors (as potential talent). Eventually some will become so good that they will 1) lead at your company 2) get hired away 3) start their own company.
Lease: Bring in high-end expertise with very specific purposes. These may be consultants, contractors or even employees who are unlikely to stay several years. This works as a way to fill holes but is generally not a long-term strategy.
Some companies have enough internal experts that they can build virtually every new hire. They create the employees that perfectly fit their company. Many of these companies “hire” experienced expertise through acquisitions, rather than recruiting.
Some companies are looking to expand very quickly, change gears or augment internal talent that has not yet, or cannot, get them where they need to go. These companies spend a ton of effort of recruiting those professionals who have built in the white hot fires of successful companies.
Every company leases help on occasion. When the staff is mostly leased it’s time to be concerned.