Lateral hiring is the process of recruiting experienced professionals from other organizations to fill mid-level or senior-level roles within a company instead of promoting from within or hiring fresh talent.
These candidates typically bring valuable industry experience, specialized skills, and fresh perspectives, which can contribute to the company’s success. The lateral hiring is often employed when specific expertise or skills that may not be readily available internally are needed.
Benefits of Lateral Hiring
With lateral hiring, organizations open the door to many opportunities and can often solve their workforce requirements in an efficient manner.
Brings Specialized Skills
Lateral hires bring specific skills and experience that may not be available internally, especially useful in specialized or technical roles. They often have the required knowledge and expertise, which helps reduce training costs and speeds up team integration.
The lateral hiring process focuses on strategically recruiting individuals already in similar roles at different organizations, often using employee referrals and personal networks to identify passive candidates.
Faster Onboarding
Experienced candidates can typically hit the ground running with minimal training, allowing them to make an impact quickly. The process of hiring such candidates, especially through lateral hiring, involves identifying professionals already in similar positions, assessing their skills, and ensuring discretion throughout. This is particularly advantageous for businesses that need to fill urgent leadership or technical positions, allowing the organization to maintain productivity without significant downtime for training.
Fresh Perspectives
Lateral hiring can introduce new ideas, processes, and innovations from other companies or industries, helping to drive organizational change and improvement. The latest hires can challenge existing processes, introduce innovative strategies, and drive change that leads to organizational improvement.
Reduced Recruitment Costs
In some cases, hiring externally for higher-level roles can be more cost-effective than internal promotions, especially if the required skillset is unique. This is particularly true when the specific skills needed for a role are rare or highly specialized.
Strengthened Leadership
Experienced professionals often bring leadership qualities, enhancing team management and overall performance. Their leadership can inspire the workforce and foster a more productive, engaged, and high-performing team.
Challenges of Lateral Hiring
While lateral hiring offers numerous benefits, it also presents several challenges that organizations must successfully manage. Addressing these challenges allows an organization to truly optimize the process.
High Cost
Attracting top-tier lateral hires often requires offering competitive compensation packages, which can be costly.
Integration Challenges
New hires may face difficulties adapting to the company culture, which can affect their performance and satisfaction.
Team Dynamics
Introducing new members into established teams can disrupt existing dynamics and potentially lead to conflicts.
Risk of Failure
There is always a risk that lateral hires may not perform as expected or fail to adapt to the new environment.
Biases and Assessments
Inadequate behavioral assessments and potential biases during the hiring process can lead to poor hiring decisions.
To overcome these obstacles, organizations must employ meticulous selection processes, comprehensive onboarding, and ongoing support to ensure the successful integration of lateral hires.
How to Implement Lateral Hiring in an Organization
For effective implementation of lateral hiring, it is imperative to take practical and effective steps that solve the intended objective.
Identify Key Roles
What are the skills gaps within the organization that need to be analyzed to determine which roles require lateral hiring? These could be senior or highly specialized roles internal candidates cannot fill. Organizations going through restructuring may need lateral hires to fill leadership roles that require prior experience in change management.
Define the Ideal Candidate Profile
Clearly outline the skills, experience, and qualifications required for the role. This will help ensure that candidates meet the organization’s specific needs. A clear understanding of the candidate’s role ensures that the selected candidates can add value to the company immediately.
Source Candidates from Relevant Industries
Use various channels such as job boards, recruitment agencies, industry conferences, and networking events to find suitable candidates. Companies can use LinkedIn and other professional networks to connect with potential candidates who may be open to lateral moves.
Create a Competitive Offer
To attract top-tier lateral candidates, offer attractive compensation packages, including salary, benefits, and other incentives. Highlighting the company’s values, culture, and opportunities for career growth can also make the offer more compelling.
Streamline the Lateral Hiring Process
Ensure that the hiring process is efficient, respectful, and tailored to the seniority and experience of lateral candidates. Interviews should focus on the candidate’s previous experiences and their fit with the company culture, ensuring they can effectively integrate and work well with the existing team.
Integrate New Hires Smoothly
Although lateral hires come with experience, it’s important to provide a structured onboarding process to help them understand the company’s culture, processes, and expectations. Assigning a mentor or a buddy to help the new hire navigate their first few months can enhance their experience and ensure they feel supported during the integration phase.
Applicable Indian Laws and Regulations
Like any recruitment process, lateral hiring requires compliance with certain laws and regulations applicable at the national level.
The Industrial Disputes Act, 1947
Ensure that the hiring process, including the terms of employment for lateral hires, complies with industrial dispute laws, especially in unionized environments.
The Equal Remuneration Act, 1976
Lateral hiring should be based on equal pay for equal work, ensuring that male and female candidates receive the same compensation for similar roles.
The Payment of Gratuity Act, 1972
Ensure that lateral hires are informed about their eligibility for gratuity based on their tenure in the company.
The Factories Act, 1948
If lateral hiring is done for positions in factory settings, ensure that hires are aware of and comply with factory-specific labor laws, including working conditions and safety standards.
Conclusion
Lateral hiring is a valuable strategy for organizations looking to infuse specialized skills, industry knowledge, and fresh perspectives. While it presents some challenges regarding integration and cultural fit, the right approach to lateral recruitment can benefit the company significantly. By focusing on clearly defined job roles, competitive compensation, and effective onboarding, companies can attract and integrate lateral hires who will contribute to their long-term success.