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Upskilling vs hiring
calculator

Compare the full cost of building the skills you need against buying them on the market.

Your numbers

Training plus time off the job
Recruitment, onboarding and ramp
Build vs buy
 
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When does reskilling beat hiring?

Usually when the gap is moderate, the person already fits the team, and the skill can be learned in a reasonable window. Hiring tends to win only when the gap is large, urgent, and genuinely outside what training can close in time.

How we calculated this

For the number of roles with a gap, we multiply by your cost to upskill an existing person (training plus their time off the job) to get the build total, and by your cost to hire externally (recruitment fees through to a ramped-up hire) to get the buy total. The saving is buy minus build. It is a straight cost comparison on the figures you entered, at the moment the decision is made. It does not model the retention effect of internal moves or the risk that a new external hire leaves in year one, both of which push further toward build. The working, the assumptions and the sources are set out below.

New to the term? Read the plain-English definition of competency frameworks in the HR Glossary.

Your working
Assumptions
  • Both costs are yours. The A$23,000 default for an external hire is a placeholder for the whole cost of an external hire, from recruitment to ramped-up; SHRM's 2025 benchmark puts recruitment alone at about US$5,475 for a non-executive role, before onboarding and ramp. If your figure is the agency fee only, buy is understated and so is the saving.
  • Upskill cost should include time off the job at salary value and any backfill while the person learns. Training price alone makes build look cheaper than it is.
  • The comparison assumes the gap can be closed by training in the time you have. Where the gap is large and urgent, or outside what training can close, hiring wins regardless of the arithmetic, and this tool will not tell you that.
  • Retention is left out of the maths, which favours buy. LinkedIn's 2020 data has employees staying about 41% longer at companies with high internal hiring, and an external hire carries first-year attrition risk. Both would widen the saving if priced in.
  • Speed to capability is not priced. An internal person already knows the team and the systems and usually ramps faster; a hire has to learn both.
Sources

What to do about it

The saving above is what the arithmetic says. Whether you can bank it depends on whether you can actually build the skill in the time you have, and whether the person wants it built. These steps are for whoever is asked to fill the gap, whether they approve the spend or recommend it.

1

Price the buy option properly before you compare

Recruitment fee, advertising, interview hours at salary, onboarding, and the ramp months at reduced output. Add the chance the hire leaves in year one and you pay for it twice. Most build-versus-buy debates are lost because buy is priced as the agency invoice alone.

2

Test whether the gap is trainable in the window you have

Write the target capability as observable outcomes and ask an honest practitioner how long a competent person needs to get there. If the answer is longer than the business can wait, hire, and stop arguing with the calculator. If it is shorter, build.

3

Pick the people, then check they want it

Look at who already fits the team and has the adjacent skill; work personality and current performance tell you more than tenure does. Then ask them. An upskill nobody asked for is a cost with no return, and the person you meant to keep may leave anyway.

4

Take the comparison and the retention argument to the decision maker together

The saving is one column. The other is that internal moves keep people longer, and that the external hire you did not make is one less first-year attrition risk. Put both on the page with the outcomes list from step 2 and a date for the first capability check.

5
Where a tool helps

Track the build to a capability date, not a completion date

The decision only pays if the person becomes capable. Set the sign-off outcomes, the assessment, the assessor and the date, and report against them. Re-run this calculator when the next gap opens; the buy figure will already be sitting there, and the build figure will be real.

Build only works
if you can see it built.

Compono Develop is a learning management system (LMS) that maps the capability each role needs and tracks each person against it, so a build decision becomes a plan with outcomes and dates rather than a course enrolment. It runs the learning delivery you expect and adds what most LMSs skip: capability by role, assessed on the job, with progress you can see by person and by team.

That is step 5 done inside the system the training runs through, with step 2's outcomes list as the plan. The saving above is only real once the people become capable. Develop shows you when they did, and flags the ones who are not getting there while there is still time to change course.

See how it works
Compono Develop
4.7/5
rating across millions of learners

Common questions

What costs should I count for external hiring?

More than the recruitment fee. Include advertising and agency costs, internal time, the ramp-up period before full productivity, and the turnover risk that a new external hire carries in the first year.

Does internal mobility really improve retention?

Yes. People who see a path to grow internally tend to stay longer, with about 41% longer tenure at companies that hire internally (LinkedIn, 2020). Building skills internally signals investment, which is itself a retention driver.

How urgent is reskilling?

More urgent than many plans assume. The WEF Future of Jobs 2025 estimates about 59% of the workforce needs training by 2030, so the build-versus-buy question is going to come up repeatedly, not just once.

This page is general information, not legal advice. We check figures annually and update them on a best-efforts basis, but employment rules change and we cannot promise everything here is current or complete. Before you act on it, confirm the detail with the relevant authority in your country or your own adviser. Last reviewed July 2026.

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Cost of skills shortage calculator

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Competency frameworks

The plain-English definition, with the calculators and rules that sit around it.

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