The HR Outlook

Lateral Hiring: The Ultimate Hiring Manager’s Handbook

This guide has everything you need to know about lateral hiring. Learn exactly how to hire laterally in 2023.

You can build a strong team by promoting people from within or by hiring people at the entry-level and helping them grow as professionals in your company. But lateral hiring lets you get the best people in your field while making the learning curve flatter.

Even though promoting from within is good for morale and keeps people from leaving, the results can be hard to predict. The skills and abilities of lateral hires have already been proven and can be measured, and they can fit in with your team quickly.

There are many benefits to hiring laterally versus other methods, but there are key differences in the approach and outcome.

Here’s an in-depth guide to hiring laterally.

What Is Lateral Hiring?

Lateral hiring is the process of recruiting passive candidates who are in specialized positions at other companies. Typically, they’re seasoned professionals who aren’t actively on the job market.

This method can be a great way to find candidates of a certain quality for specialized jobs or executive positions, especially when it’s hard to find qualified candidates through job postings or the talent pool.

According to the most recent HR and recruiting statistics, about 66% of hiring managers say it’s getting harder to find good candidates, and 59% of companies are spending more to find them.

Hiring laterally is especially effective when filling managerial roles. The best managers know about the latest strategies and trends in their field and can make important changes when they are needed. Strong leaders drive innovation, employee engagement, and productivity. They bring out the best in team members and motivate them to collaborate to achieve common goals.

When hiring for these positions, it makes sense to source candidates who are already achieving these things.

Why You Should Hire Laterally

Lateral hiring can save your company money and time due to the candidate’s familiarity with the position. It can reduce concerns over hiring someone who isn’t right for the job because the candidate has already shown their expertise at another company. 

There’s no shortage of talent in the job market. The “Great Resignation” is still going on, according to the most recent JOLTS report. In November 2022, 4.2 million Americans quit their jobs, bringing the total number of people who will have quit their jobs by 2022 to 46.6 million. “The Future of Jobs Report 2020” from the World Economic Forum says that AI will replace 85 million jobs around the world by 2025. Even though that sounds scary, the report also says that it will create 97 million new jobs in the same time frame. But 48% of people who quit their jobs during the Great Resignation are looking for work in different fields.

That means that almost half of the people looking for work don’t want to keep going on the same career path. When it comes to their expertise, specialized skills, and work experience, they’re starting over.

For employers, it can be difficult to find someone who is both an expert and willing to stick around.

With lateral hiring, you can get professionals who are dedicated to their jobs, at the top of their game and have important skills.

Let’s take a closer look at the benefits of hiring laterally.

1. Bring Expertise To Your Company 

Vital skills and knowledge are needed for specialized roles. With lateral hiring, new recruits bring potentially decades of experience to your team.

Through lateral hiring, you can find people with the skills you need for high-level jobs like business executives, lawyers, and doctors. Managers with a lot of experience are an important asset for companies that want to keep their work processes running smoothly or grow.

Managers with competence and expertise will improve your employer brand and accomplish tasks more effectively than a manager with less experience. Hiring laterally brings this expertise, knowledge, and skill set to your workplace.

2. Execute Critical Projects

It’s important to find experts who can lead your teams through important projects and help them deal with problems in a good way.

Hires from outside the company can be used for important projects and tasks that need reliable expertise. Seasoned professional managers have experienced numerous projects, changes, and revamps throughout their careers. Their knowledge can help guide your teams through turbulent times.

3. Shorter Onboarding Time

While onboarding will always be necessary, the amount of time needed to get a lateral hire up to speed will be less than with other hires. This is because they have already been doing a similar job, are experts in their field, and likely had a negligible break between their last day at their previous company and their first day at yours.

In fact, they may bring more expertise to the table than those they will be working with.

For example, a seasoned sales expert won’t need to spend months learning or refining sales skills. Even if an experienced radiologist needs to learn how to use your particular X-ray machine, they should already know how to calm a patient’s “scanxiety.”

In the onboarding process, lateral hires will need only organization-specific information rather than a tutorial on how to do their job.

Key Differences Between Lateral Hiring And Other Hiring Methods

Lateral hiring is different from other ways of hiring, and you need to be more careful about how you do it. It’s an outbound process that is kept quiet, unlike typical hiring, where you spread the word through multiple hiring platforms, opening the floodgates for candidates to apply.

With this way of hiring, your company doesn’t have to spend money advertising job openings and holding a lot of interviews with people who don’t have similar jobs. Standard hiring practices are not required, and the entire approach is different.

Careful thought is needed to figure out how a new hire will affect the management, teams, and processes that are already in place. It’s important to be absolutely clear about the job and have a realistic long-term plan for the growth of the role.

Budget allotments need to be clearly understood, and the job title may need to be created or amended based on the candidate you are trying to hire.

Confidentiality is essential. Keeping the hiring process secret protects the candidate and your company. Lateral hires aren’t actively seeking to leave their current employer, and if word gets out, it can damage them professionally if the transition to your company falls through. And your company may want to hire from outside the company to avoid drama among teams or to handle an expansion or change in a quiet way.

How To Hire Laterally 

Lateral hiring is similar to other recruitment methods because you are searching for the best candidate for the job. Here are the steps for lateral hiring.

Step 1. Research Qualified Candidates

Lateral hires can be difficult to find. Researching industry experts on LinkedIn and other professional platforms can be a good way to discover candidates.

Networking at professional events and conferences within your industry can help you meet new talent. This lets you get to know a potential lateral hire on a personal level, which could help convince them to join your company in the future. Referrals from current employees are another good resource that can help you find quality candidates. 

You might not always have access to a resume, which can make it hard to figure out your skills and work history. Taking the time to research a potential hire can grant you an understanding of what they do at their current company and what skills and talents are required for the position they hold.

Researching and understanding their current job will also help you better understand whether or not the position you need to be filled would interest them.

Knowing a potential hire’s current role and accomplishments will give you a clearer picture of the value your company can offer them. This will help you entice them to leave their current post for a job with your company.

Step 2. Define The Job And Your Company’s Needs

Write a job description that clearly defines the role and what your company is looking for. This will help you find a quality candidate for the position.

Be transparent about the opportunity, your needs, what the job will offer them in the future, and your company’s long-term and short-term goals.

Step 3. Sell Your Company To The Recruit

Give the prospect a list of reasons why your company is a better option than their current employer. Setting your company apart is key to getting them interested in the opportunity.

Be open and honest about the company culture and the successes and challenges your company has had. Include any perks they can benefit from.

Step 4. Directly Contact The Candidate

Create a short list of prospects and contact the one you’re most interested in first. While you can contact multiple potential hires at once, with lateral hiring, it’s best to focus on quality over quantity. 

Whether you’re cold calling or communicating with an acquaintance or referral, reaching out can be done via email or phone. Start by saying who you are and mentioning someone you know in common or a conference you both went to. Share with them the career opportunity you want to offer them and ask them if they are interested.

Don’t ask for a CV or resume, and avoid asking them too many questions like you would in a normal interview. You don’t want to take up too much of their time. Instead, pitch your company to them. Show them what you can offer them that they may be lacking in their current position. 

Wait for their reply. If they don’t reply, don’t be pushy. Move on to the next candidate on your list.

Step 5. Maintain Confidentiality

You should get in touch with candidates in a way that won’t make their current employer suspicious. You don’t want to create an uncomfortable situation for them or your company.

It can be tricky and potentially risky when too many people know you’re seeking to hire laterally. You don’t want to offend the person you’re trying to recruit. You’re trying to woo them away from their current employer. They may be less inclined to join you if they think they’re one of a dozen options you’re considering.

Also, you don’t want to damage morale at your company or make their introduction to your team needlessly difficult. According to research, only 34% of employees would rather work for an internal manager than an external hire. And 35% of employees quit or considered quitting when passed over for a promotion by an outside hire. It’s important to be careful when introducing a new hire from another team to their new one, and the news should come through official channels rather than the grapevine.

Reserve time for each prospective candidate. If you contact too many people, you can create needless friction if more than one person decides they want the job.

Step 6. Make An Offer 

When a candidate says they’re interested in the position, it’s time to make them an offer. Ensure that your offer meets or exceeds all their expectations.

Lateral hires are usually content in their current position. So if you don’t act quickly and make them a good offer, they could lose interest in the position you need them to fill.

Step 7. Onboard

While lateral hires likely won’t need as much training as other new employees, it’s still important that they are onboarded properly to ensure they are confident and comfortable with the way your company does things. 

While you can save on the onboarding experience, onboarding still plays a vital role for anyone who joins your company.

Personally show the new hire around the facility and help them get acquainted with their new team. Make sure they understand the software or operating systems your company uses, as the companies they’ve worked with in the past may have used different systems.

Ensuring that they feel welcome and comfortable will allow them to do the best job they can and help retain them over time.

When To Consider Lateral Hiring

While there are many benefits to lateral hiring, it may not always be the right choice. However, if you need new life brought into your company and the talent pool doesn’t seem to provide the expertise you’re searching for, consider lateral hiring.

If you need a candidate with managerial or specialized expertise and haven’t had luck finding someone capable, lateral hiring is a good way to source a candidate you can reasonably trust will bring the knowledge and expertise you need.

Negative Aspects Of Lateral Hiring

Retention rates among new lateral hires can be low. According to this study of lateral hires at law firms, 47% of lateral partner hires didn’t stay for a full five years at their new firms.

The success rate of lateral hires can vary, especially if they aren’t screened and trained properly.

Know who you are hiring by putting in the time, research, and appropriate communication. This can help you understand their needs and help keep them at your organization.

Ensuring a lateral hire can mix well with the culture of your company is a vital part of keeping them. Be upfront and clear about the goals and ideals of your company from the very start.

How To Integrate A Lateral Hire Successfully

The key to making a lateral hire work is the same as the key to making any other hire work. While one of the perks of a lateral hire is that you don’t need to spend as much time and money on training, it’s important to ensure a strong onboarding and growth experience.

If you only focus on a special project that you need them for but not on the future of the position and how it can benefit the company long-term, it’s likely that your new hire may seek employment elsewhere after their main project has come to an end.

Growth, learning, and improvement are key to the happiness and productivity of employees and are needed at all levels of the company.

Make sure your managers have the tools and skills they need to keep growing as professionals. This will help them fit in well and help you keep them for the long term.

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