How Lateral Hiring Can Help the Talent Acquisition Process

Recruiting. There are few tasks in the work world that fill people with dread like the prospect of having to find a new employee. 

The whole process can seem like a nightmare. 

Where do you find candidates in the first place? How do you determine which candidate is the best candidate? How long will it take to train them? Will they have the skills to not only perform well in the role but to improve your team overall?

Recruiting is difficult, and the uncertainty in hiring makes everything worse.

The good news is that there is a way to ease at least some of the uncertainty in hiring, and it is a strategy that has been under your nose this whole time. In fact, your executive team was likely hired with this very same strategy—the lateral hiring strategy.

What is lateral hiring?

Lateral hiring is a recruitment strategy. The term refers to the process of recruiting employees from other organizations, mainly to fulfill job roles within the company that require specific skills and expertise. 

This approach focuses on hiring professionals who hold similar roles in another organization, often with the same salary.

In lateral hiring, companies seek individuals who hold similar positions in terms of seniority and responsibility to the job opening they have. The company offers job candidates an opportunity to transition into a parallel role at a new company, often without a substantial change in their job title or duties. 

Lateral hiring becomes essential when a company requires seasoned professionals to fill high-level senior management positions or other specialized job vacancies quickly. These professionals often come with a proven track record and are able to begin contributing to the company’s growth and success much sooner than other new hires who are less seasoned.

In today’s rapidly changing business landscape, organizations need the right talent and expertise to maintain their position in the marketplace and to remain competitive everywhere. 

Lateral hiring is an effective way for companies to address skill gaps, acquire skills and knowledge quickly, and bring on board experienced professionals who can contribute to business success right away.

Why companies use lateral hiring

Lateral hiring can be an efficient way to find highly competent professionals, engage them in a new environment, and mitigate any potential knowledge gaps within the team. However, the process of lateral hiring is not without its challenges, as it can be time-consuming to identify, attract, and retain top talent with niche skills and expertise.

In order to make the most of lateral hiring as a strategy, companies must consider various aspects of lateral recruiting, such as determining suitable compensation packages, fostering a supportive environment for newly hired employees, and ensuring a smooth onboarding experience. 

This approach requires a thorough understanding of the specific job requirements for the position and industry landscape to effectively match the right candidate with the appropriate role and create a successful synergy for both the employee and the organization.

Pros and cons of lateral hiring

Like any business strategy, lateral hiring comes with advantages and disadvantages to consider and keep in mind throughout the recruitment process.

Pros

• Expertise—Lateral hiring allows companies to acquire professionals who possess the necessary skills and competencies required to succeed in a given role. A lateral hire can help bridge skill gaps within the organization and can improve the overall performance of the team.
• Time-efficient—As lateral hires are already experienced in similar positions, they require less training and can start contributing to the organization quickly.
• Fosters innovation—Employees brought in from other organizations often have fresh perspectives and ideas, which can lead to innovation within the company.
• Competitive advantage—Hiring skilled professionals from top industry players can give a company a competitive edge in the market.

Cons

• Risk of a cultural misfit—Employees coming from different organizations may have contrasting work cultures, which could lead to potential conflicts and decreased job satisfaction.
• Higher costs—Lateral hiring can be expensive, as companies usually offer attractive compensation packages to entice professionals away from their current employers.
• Recruitment process—Companies that use lateral recruiting as a business strategy often work with recruiting firms to find potential candidates, particularly when adding to their executive team. Finding the right recruiting firm for your company can be time-consuming and stressful.
• Retention issues—Some lateral hires may use their new job as a bargaining chip with their current company, causing them to leave shortly after joining if they receive a counteroffer.

While lateral hiring offers a range of benefits, companies should remain aware of potential drawbacks and make informed decisions to maximize the advantages of this recruiting strategy.

A step-by-step guide to the lateral hiring process

Step 1. Determine your staffing needs

The first step in any hiring process is to determine what skills and talent your company needs. Companies should specify the background and knowledge that the right person will need in order to become a successful new hire. 

In the case of a lateral hire, your company most likely has or has had people who have filled the open job role successfully. Review their qualifications and duties to develop a detailed job description. A strong job description is essential for the recruiting process.

A common mistake is for companies to use an existing job description for the open role. While this may save time, it can result in a candidate that lacks the most current skills needed for the position. 

While using previous job descriptions can be helpful, companies should not rely on them as the best representation of the current needs for the role.

Step 2. Use your sourcing channels

Companies can’t wait for the right candidate to stumble over them. Once you’ve developed a strong job description, publicize your search. Posting a job ad can be a good first step, but it’s also wise to use your sourcing channels, such as:

• Professional networking sites such as LinkedIn
• Industry-specific forums or online communities
• Employee referrals
• Job boards for specialized or niche positions

These channels can help companies build a pool of top potential candidates and prospects with the required skills and expertise for the role that is currently available and for future roles, depending on staffing projections. 

Candidates that aren’t a fit for the lateral hiring position may strengthen and deepen a company’s talent pool when hiring for other positions, so it is very important that the company keep in touch with all qualified applicants.

Step 3. Ask your employees for referrals

Recruiters have a common saying—talent knows talent. Top employees did not get their knowledge, experience, and skills on their own; they gained them by working with people who already had them. 

Because of this, employee referrals can be one of the most powerful tools in a lateral hiring process. A company’s current employees likely know someone who has worked in a similar position and may very well hit the ground running as a new employee.

Be sure to let employees know of any open positions your company has and encourage them to refer other professionals they know to apply for the position. 

When an employee refers someone for a position, companies should take steps to ensure the candidate referred by a current employee is included in the interview process, even if they aren’t a perfect candidate. 

Companies that show appreciation for employee referrals are more likely to get more referrals later, and their lateral recruitment process is more likely to be a success.

Step 4. Improve the lateral recruitment process by using a search firm

Depending on the industry and the level of talent a company is seeking, they may choose to use a search firm. As was mentioned earlier, search firms are commonly used to find executive-level candidates; however, search firms can also be useful in sourcing candidates with a specific skill set. 

If necessary, search firms are experienced in conducting confidential searches as necessary to meet a company’s business goals. Search firms often specialize in passive candidates, those professionals who are not actively looking for a new position but who may be open to hearing about potential prospects.

Finding the right search firm for your company can be a difficult process. Hiring managers, HR professionals, and others involved in a company’s recruiting process should take the time to find a good search firm before a new position opens. 

Use your sourcing channels to find out which search firms your peers at similar companies recommend using.

Each search firm is different, but search firms will tailor their work to meet your recruitment process. Their goal is to find the right person for your company, and they are prepared to act quickly.

Step 5. Increase the likelihood of finding the right talent

When it comes to lateral hiring, identifying the right talent is crucial for the success of the recruitment process. 

Companies should utilize a combination of methods to attract quality candidates, such as working with search firms, placing job ads, and soliciting internal referrals to increase the likelihood of finding the best candidates.

It may seem counter-intuitive, but finding talent is similar to finding clients. It is wise to cast a wide net and publicize your search throughout the business community. Often, the best candidates are those who aren’t actively looking for a new position.

Step 6. Conduct interviews and assessments

After you’ve sourced your candidates, the next step is to conduct interviews and assessments. This stage is crucial for evaluating the suitability of a candidate for the position. 

The interview process is important for ensuring the candidate will be a good fit with the existing management team as well as the company culture. Interviews can be held in person, over the phone, or through a video call. Assessments can include:

• Skill tests or quizzes
• Presentations or case studies
• Behavioral and aptitude tests

The goal of the interview process is to thoroughly evaluate the skills, experience, and personality of a candidate to narrow your candidate list to the best potential hires.

Step 7. Conduct background and reference checks

Once a company has selected its top candidates, it is time to begin the background and reference-checking process. 

Typically, background checks involve criminal checks. There may be additional types of checks depending on the company and the role the candidates are being considered for. 

Background checks may also involve a credit check, employment verification, professional license confirmation, and drug screening. Often, the decisions around background checks are made by the company’s HR Executive team, and they will advise once the background check is completed.

Step 8. Make the job offer

After the interviews, assessments, and background checks, the final step is to make an offer to the selected candidate. This offer should include details about the role, salary, and any other relevant benefits. 

It is important to ensure that the offer is competitive and aligns with the candidate’s experience and skills. Once the job offer has been accepted, companies can begin the onboarding process to integrate the new hire into their organization.

Strategies and best practices

Here are some strategies and best practices to keep in mind for a successful lateral hiring process.

Interview process

A well-designed interview process is essential for effective lateral hiring. Solicit responses based on relevant job scenarios, as suggested in the Harvard Business Review. Utilize structured questions to assess a candidate’s technical knowledge, problem-solving, listening, and communication skills as well as their cultural fit. 

It can be helpful to incorporate video conferencing tools like Zoom when necessary to evaluate remote candidates. Partner with colleagues to develop a consistent interview approach that accurately measures a candidate’s fit for the role and firm culture.

One of the most important steps a company can take during the interview process is to confirm that the skills and abilities of top candidates match the needs of the company and the role they’re being considered for. 

A performance-based assessment provides a live environment for the job candidate to perform real work. This gives companies a fair and reliable way to evaluate candidates. One of the best performance-based assessments is offered by True Ability. Their assessments allow you to fairly evaluate your candidates, allowing you to make intelligent hiring decisions to build the best team.

Candidate fit and compatibility

It is crucial to assess a candidate’s fit and compatibility with the organization and the specific role they will fill. 

One way to accomplish this is by clearly defining and communicating the skills and background required to succeed in the job. This will help accurately identify qualified candidates who are more likely to be successful in the interview process and as potential new hires. 

Additionally, incorporating behavioral and cultural fit assessments into the hiring process can provide valuable insights into whether a candidate will align well with the team and the organization’s values.

Onboarding and integration

A smooth and productive new hire transition is important for the successful integration of a new lateral hire. Companies should dedicate resources and time to creating a comprehensive onboarding program. Key components of this process include:

• Orientation—Introduce the new lateral hire to their team members, company culture, and internal processes. Offer training on any company-specific software or tools they will be working with.
• Mentoring—Establish a mentoring relationship between the new lateral hire and a senior colleague in their department. This will help with knowledge transfer and relationship-building within the company.
• Performance review and feedback—Regularly assess the performance of the new lateral hire, providing constructive feedback and support to guide their growth within the organization.

By following these hiring strategies and best practices, companies can increase the effectiveness of their lateral hiring process and set up their new talent for success in the organization.

Lateral hiring trends

The following are trends in lateral hiring that recruiters and HR teams should take care to understand and address. 

Ensuring cultural fit

In lateral hiring, ensuring a cultural fit can be challenging, but it is essential for long-term success. To address this issue, organizations can:

• Develop clear values and expectations for candidates and employees
• Include cultural assessments as part of the hiring process
• Promote ongoing dialogue and feedback to reinforce the company’s culture

By proactively addressing cultural fit, organizations can increase the likelihood of a successful lateral hire and create a cohesive and engaged workforce.

Remote workforce

The rise of remote work has had a significant impact on lateral hiring trends. This shift has given organizations the opportunity to tap into a broader talent pool full of talent from various geographical locations. 

As a result, employers are more open to hiring candidates who were previously unavailable due to geographical constraints. This trend is expected to continue as companies realize the benefits of having a distributed workforce, such as reduced overhead costs and improved employee satisfaction.

Diversity and inclusion

Another growing trend in lateral hiring is the focus on diversity and inclusion. Employers are increasingly recognizing the value that diverse perspectives and backgrounds bring to their businesses. 

Organizations are now taking active steps to ensure that their hiring processes are unbiased and inclusive, leading to more diverse workforces that boost innovation, productivity, and overall performance. 

Efforts to improve diversity in lateral hiring include initiatives like unconscious bias training, diverse hiring panels, and targeted recruitment campaigns.

Technology adaptation

In today’s digital age, adopting new technologies has become crucial for effective lateral hiring. Candidate sourcing, assessments, and interviews are increasingly being conducted online, utilizing various applicant tracking systems, video conferencing platforms, and pre-employment assessment tools. 

The use of artificial intelligence and machine learning in candidate screening and selection is also gaining traction, allowing organizations to make more data-driven hiring decisions and reduce human biases. 

This trend is expected to continue as more companies embrace digital transformation and integrate cutting-edge technologies into their hiring processes.

Legal and ethical considerations

When it comes to lateral hiring, there are several legal and ethical considerations that both the hiring company and the candidate should be aware of. These considerations help maintain professional integrity and protect the interests of all parties involved. This section will discuss Non-Compete Clauses and Confidentiality Agreements as key aspects of legal and ethical considerations in lateral hiring.

Non-compete clauses

Non-compete provisions are contracts that forbid a professional from joining a rival company or launching a rival venture within a given timeframe, industry, and geographic region. To safeguard the business’s interests and intellectual property, these clauses are frequently added in employee contracts.

When a company is considering a lateral hire, it must ensure that the candidate is not subject to any non-compete agreements that may prohibit their employment. 

A thorough review of the candidate’s existing employment contract should be conducted for any lateral hires that may be subject to one. 

When reviewing an employment contract, companies should pay close attention to any non-compete provisions. Adhering to these clauses is essential for both the hiring company and the candidate to avoid potential legal disputes and damage to their professional reputation.

Measuring lateral hiring success

When it comes to lateral recruitment, it is essential for companies to assess how well their hiring strategies are working. There are two primary metrics to evaluate the success of lateral hiring: Retention and Performance Metrics, and Return on Investment.

Retention and performance metrics

One of the critical ways to gauge the success of lateral hiring is by measuring retention and performance metrics. These metrics help employers determine how well new hires are integrating into the organization and how effectively they are contributing to achieving company goals. Some key performance indicators (KPIs) to consider include:

• Time-to-fill—This metric evaluates the time it takes to fill a position once it opens. Faster times typically indicate a more efficient hiring process.
• Retention rate—The retention rate tracks the proportion of lateral hires who remain with the company over a specified period. Higher retention rates suggest successful integration and job satisfaction among lateral hires.
• Performance evaluations—Assessing a lateral hire’s performance reviews can provide insight into their contributions to the company’s success and how well they have adapted to their new role.

By focusing on these essential metrics, companies can ensure they make informed decisions about lateral hiring, optimizing their talent acquisition strategies for long-term success.

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Frequently asked questions

Isn’t lateral recruitment simply employee poaching?
The difference between lateral hiring and employee poaching depends on which side of the equation your company is on. If your company is getting good candidates through lateral recruiting, then it’s positive. If your company is losing top people, then it’s inconvenient and your company should request feedback about why people are leaving in order to increase employee engagement.

Why are lateral moves appealing to candidates?
There are many reasons why people change jobs. More money may be a consideration, but it’s not always the deciding factor. Many lateral hires come from prospective candidates who are seeking a chance to increase their skillset, change industries, and or to get more job satisfaction.

Is later hiring confidential hiring?
Many lateral hires result from a search for executive talent, and such searches are often confidential. However, there is nothing about the lateral hiring process that requires confidentiality by definition.

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Conclusion

Lateral hiring can be a big boost to your company’s performance, but the process can be delicate. Implementing these strategies can help companies navigate the complexities of lateral hiring and make informed decisions that positively impact their organization. 

By using enhanced job descriptions, active networking, strategic assessments, as well as onboarding and integration strategies, companies can achieve successful lateral hires and drive growth.

Jodi Mai began her career as a recruiter after college. She moved into an HR Generalist role and later, into HR management, working on such topics as employee relations, benefit administration, and payroll. Over the last 15 years, she has worked in the talent acquisition and management industry, and since 2018, Jodi has expanded to HR consulting and writing on HR and recruitment topics.

About TrueAbililty 

TrueAbility is a trusted global performance-based technical assessment provider offering a community ecosystem allowing technical professionals and employers to collaborate and measure skill sets through AbilityScreen®. AbilityScreen is the only fully-managed performance-based technical assessment platform operating in a live, cloud environment that automates recruiting and hiring processes to definitively assess and qualify a technical professional’s technology experience.

TrueAbility has executed over 20,000 technical assessments logging more than 18,000 hours of live server practical skill evaluations. Employers have collectively hired hundreds of qualified technical professionals for specific job positions across an array of industries. Founded in 2012, TrueAbility is privately held and headquartered in San Antonio, Texas. For more information, please visit www.trueability.com.

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