Apples Make vs. Buy Decision

Apple

Recruiting

There are a number of different ways that Apple can recruit the talent it needs to design chips in-house. The first is through acquisition. The article notes that Apple has bought a small chip maker in order to acquire some talent and patents. This approach is often good because the talent is already in place, and the team is already familiar with the technology. There is still the need to get that team up to speed with Apple norms, but acquisition is often the fastest route to talent and technology acquisition. A second method would be making inquiries via the company's existing talent pool. Tech people often know other tech people, with whom they have worked over the years. People in this business will have worked at multiple companies and their contacts could prove valuable for Apple in trying to find the chip-design talent that it needs. The third method is by posting on job boards. This is the hardest method, and attracts the most noise, but can also uncover people that are not found either through acquisition or through internal channels. By putting the word out that Apple is looking for chip talent, the company is also allowing its employer brand to attract people, who may become interested once they are aware that Apple has moved this function in-house. Job board posting should also be done in the places where chips have traditionally been designed in recent years -- Taiwan, Korea, China -- as well as the United States.

Forecasting

In order to hire the right number of workers, Apple needs accurate forecasts. Meeting demand for workers requires that the company has a good idea of what it wants to do, strategically. In this case, Apple got the idea of using its own chips, but it has to know what kind of chips and for what products, as well as when, in order to hire and train the right number of people. In this case, Apple might forecast demand for iPhones and iPads, and recognize that if it wants to regain some of the market share it is bleeding it will need to have its own chips. Knowing how many different chips it needs and how many people are needed on a chip design team are other essential elements of the forecast. Chip requirements for promising new projects should also be taken into consideration, as that could require having multiple chip teams.

I believe that in the technology industry forecasting is not a mandatory first step. Normally, it would be the natural first step, but there are extenuating circumstances for Apple. The first is that Apple has $100 billion in cash. With absolutely no financial constraints it is in the unique position of having the means to stockpile talent. Apple can hire people first and figure out what to do with them later. This is important, because the scarcity of talent in the industry means that when the opportunity to hire someone good comes up, the company should take advantage of that opportunity. The other circumstance unique to Apple is that with a new program like this, the actual expected sales volume of the chips is not important. The effort to design a chip is the same whether the company sells 10 iPhones or 10 million iPhones. The chip design process itself is not scalable. The argument that forecasting is important is if Apple needs to design multiple chips because it believes that in the future it will be selling multiple devices that require different chips. In that case, it needs to know if it is hiring for one chip team or multiple chip teams.

Other Planning Tools

Forecasting is probably the easiest and most affordable method of resource planning. The company has a pretty good idea of what it plans to produce in the next couple of years so the forecasts are roughly in place. Another method of planning for HR resources is to assume a certain amount of turnover. This is important because this complements the forecasting technique by applying historical turnover data to the forward-looking projections of the forecast. This data is available, so again this is fairly cost-effective and probably accurate as well. Another technique for planning HR resources is to guess. That's really it -- you either estimate your demand based on forecasts or you wing it. This option is the cheapest up from but the costliest overall because the company is going to hire the wrong amount of the wrong people without an intelligent forecast.

Recruiter Traits