Definition: Lateral hiring is recruiting skilled and experienced professionals at a similar level to their current role in another organization, bypassing the traditional path of climbing the corporate ladder step by step.
Lateral hiring offers many benefits, from quickly filling vacant positions to infusing fresh perspectives into a team.
Differences between lateral hiring and traditional hiring
Traditional hiring (entry-level hiring) involves recruiting individuals at the beginning of their careers or with relatively little experience in the specific field or role.
The primary goal of traditional hiring is to find employees who can grow and develop within the organization. In this approach, newly hired employees start at lower-level positions and progress their careers through promotions and role expansions.
The key advantage of traditional hiring is that it allows the organization to mold and develop talent according to its specific culture, processes, and needs. These employees are often more flexible and adaptable since they are learning the company’s ways from the onset of their careers.
However, traditional hiring also has its drawbacks. New hires often require substantial training and time to become fully productive.
Additionally, these individuals may not have the experience or expertise to take on complex tasks or strategic roles immediately, which could potentially slow down the achievement of company goals.
On the other hand, lateral hiring involves recruiting experienced professionals for roles similar to their current or previous jobs. In this approach, the new hires don’t have to start at the bottom and work their way up—they’re brought in at a level commensurate with their experience.
Lateral hiring’s primary advantage is that it allows the company to fill a position quickly with someone who can hit the ground running.
These individuals bring their expertise and skills to the table right away, potentially offering fresh perspectives and ideas. They may also bring valuable networks and relationships from their previous roles.
For companies in highly competitive industries or in need of specific skills, lateral hiring can provide the needed talent without the time investment of training and development associated with traditional hiring.
However, these hires may command higher salaries due to their experience, and cultural fit might be more challenging to achieve since these individuals have already formed work habits and expectations in other organizations.
There may also be resistance from existing employees, who may feel overlooked for promotions or threatened by the newcomer.
Lateral hiring process
- Define Role Requirements: Given that lateral hires already have experience in a similar role, be specific about the level of expertise and the types of skills you’re looking for.
- Sourcing Candidates: For lateral hiring, tapping into passive candidates—those not actively looking for a job but who may be open to new opportunities—can be particularly effective.
- Screening: The aim here is to assess whether the candidate’s skills and experience align with the job’s requirements.
- Interviewing: This is your opportunity to delve deeper into their experience, skills, cultural fit, and career aspirations. You can use competency-based and behavioral interview techniques to assess their ability to perform in the role.
- Assessment: For lateral hires, it is beneficial to incorporate additional assessments into the hiring process, such as job simulations, case studies, or technical tests, depending on the role. This can help verify the candidate’s skills and give you a better idea of how they might perform on the job.
- Offer and Negotiation: If a candidate is deemed suitable, the next step is to make a job offer. This may involve negotiating salary and benefits, as experienced candidates will likely have higher expectations.
- Onboarding: A thorough onboarding process ensures that lateral hires understand the company culture, processes, and expectations. Given their experience, lateral hires may be able to start contributing quickly, but they still need to understand how things work within your specific organization.
Lateral hiring is particularly beneficial when a company needs to quickly fill a role with someone who can hit the ground running, when there’s a need for specific skills or expertise, or when filling mid-level or senior positions that require extensive experience.
Challenges of lateral hiring can include ensuring a good cultural fit, dealing with potential resistance from existing employees, and negotiating higher salaries that experienced candidates may command. Additionally, sourcing experienced professionals can sometimes be more challenging than finding entry-level talent.
Lateral hiring can impact diversity and inclusion by bringing in professionals from different companies, industries, or backgrounds, thereby fostering a diverse mix of experiences and perspectives. However, companies should ensure they have policies in place to avoid bias in their hiring process and that they are actively seeking a diverse pool of candidates.
Onboarding is crucial in lateral hiring, just as it is in traditional hiring. Even though lateral hires bring significant experience, they still need to understand the new company’s culture, expectations, and processes to be effective in their new roles.