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What Is Lateral Hiring? A Step-by-Step Guide

In contrast to traditional hiring methods, lateral recruitment focuses on experienced professionals who are able to make an immediate impact on business development rather than entry-level or junior candidates. It can often imply hiring passive candidates who are working for a competitor company in a similar position.

In this guide, we will discuss the important aspects of effective lateral recruitment and explore its benefits, challenges, and use cases. Read on to find out whether this hiring technique is suitable for your company and how to implement it to strengthen your talent pool.

Table of Contents

What Is Lateral Hiring?

Lateral recruitment involves bringing in seasoned professionals from external companies to take on important positions in a company. In contrast to traditional hiring methods, which typically aim for entry-level roles or individuals actively looking for a job, lateral hiring concentrates on enticing passive candidates — those who aren't actively searching for a new job but have niche expertise that can be extremely beneficial to the hiring company.

Important aspects of the lateral hiring process include:

  1. Recruiting passive candidates. Lateral hires are usually experts with necessary specialized skills who are not currently seeking new job opportunities.
  2. Specialized skills. This type of recruitment concentrates on candidates with extensive expertise and a particular background in their area.
  3. Complete comprehension. Recruiters usually look for applicants with an in-depth understanding of their field and who can make an immediate impact.
  4. Search channels. Lateral recruiters mostly use professional networks and industry connections to discover and attract potential candidates.
  5. Immediate contribution. The focus is on professionals who can smoothly blend in and add value right from the very beginning in the company.

Is Lateral Hiring a Form of Confidential Hiring?

Lateral hiring can be considered a form of confidential hiring as it strategically avoids public job advertisements and apparent recruitment efforts. Unlike traditional hiring processes that use job boards and social media channels to attract candidates, lateral recruitment is discreet, focusing on direct outreach and private negotiations. This confidentiality is crucial for several reasons:

  • It prevents alerting the candidate’s current employer, which could lead to counteroffers or job insecurity;
  • It minimizes unnecessary attention from competitors or the public;
  • It helps protect the company’s strategic plans;
  • and more.

This approach also allows companies to precisely target individuals who can meet specific business goals, rather than sifting through a broad and often less relevant applicant pool. Overall, confidential hiring through lateral recruitment enables organizations to effectively and quietly bring in top talent, strengthening their teams and driving strategic growth without the noise and complications of public job searches.

Situations When Lateral Hiring Is Necessary

Lateral recruitment is necessary in many situations when traditional hiring methods are not enough. Let’s consider a few important scenarios.

  1. Specific skill set / qualifications needed. A critical scenario occurs when a company must hire for a vacant position requiring a highly specialized skill, which cannot be found internally or through hiring at the entry level. For instance, if an IT company needs a cybersecurity specialist with specialized knowledge to address new dangers, a lateral hire can provide the required skills and experience right away.
  2. Entering new marketplaces. Another situation is when a company is looking to enter new markets or expand into different countries. So, they usually need professionals with an extensive understanding of the local industry and business environment. Lateral hiring enables companies to onboard experts who are familiar with regional differences, regulations, and customer preferences, leading to smoother market entry and operations.
  3. Addressing business issues. Lateral recruitment is helpful when a company must act promptly to take advantage of market opportunities or tackle pressing business challenges. In such cases, waiting to onboard new employees to might be too slow. Bringing in prospective candidates who are already adept in their roles can accelerate the achievement of business goals.

What Is the Difference Between Lateral Hiring and Vertical Hiring?

Lateral recruitment and vertical recruitment are different methods used in the hiring process. Lateral hires involve recruiting professionals with specific skills and expertise from comparable roles in other companies. As mentioned above, this process focuses on reaching out to passive candidates who are not actively seeking new employment but possess relevant experience and are an ideal fit for the open position.

On the other hand, vertical hiring involves filling roles by promoting current employees or hiring externally for higher-level positions. This type of hiring is often used when building a management team or filling positions that involve moving up the company ladder. Businesses gain advantages from vertical hiring by developing existing employees and guaranteeing that new recruits possess a comprehensive understanding of the company's culture and objectives.

Both approaches come with their advantages, yet the decision is based on the particular requirements and objectives of the company.

What Are the Benefits of Lateral Hiring?

Lateral hiring offers numerous benefits, allowing companies to act quickly and secure the best talent. By targeting relevant people who are already excelling in their current roles, businesses ensure they have the right talent to meet their evolving needs.

1. Immediate Impact

Lateral recruitment fills open positions with new employees who have proven expertise, allowing them to contribute immediately. This ensures the company meets business goals without delay.

2. Specialized Expertise

By recruiting from outside the company, businesses can secure the specialized skills needed for specific roles. This ensures the right person is chosen to drive success in the new position.

3. Fresh Perspectives

Hiring employees from outside brings fresh skills and varied perspectives, promoting innovation and expansion. This aids the company in staying competitive and flexible in a dynamic market.

4. Diverse Talent Pool

Hiring experts from outside brings a great variety of experiences to the organization. This skill pool improves the creativity and problem-solving skills of the whole organization.

5. Cost and Time Savings

Lateral hiring cuts down on recruiting and training expenses by focusing on candidates with established experience. This guarantees that new employees will be efficient right from the start, making the best use of resources.

6. Strategic Growth

Lateral hires support the company's strategic objectives by fortifying critical roles within the organization. This helps with strategic expansion and prepares the company for future growth.

7. Succession Planning

Lateral recruitment ensures the company is ready for leadership transitions by bringing in experienced candidates. This maintains stability and supports long-term objectives.

8. Addressing Talent Shortages

Lateral hiring effectively fills critical roles by recruiting top talent from other employers. This helps the company meet business goals despite market challenges.

Challenges Faced by HR during Lateral Hiring

Lateral hiring can be advantageous for introducing skilled candidates, but it may also create numerous obstacles for HR departments. These barriers may hinder the recruitment process, impacting its effectiveness and the caliber of newly recruited employees. Let's examine a few of them in more detail.

1. Lack of Efficiency

The complexity of resume screening and face-to-face interviews frequently hinders the effectiveness of lateral hiring processes. Recruiters invest significant amounts of time reviewing CVs and conducting interviews, resulting in potential delays and missed chances. The process is further slowed down by dealing with irrelevant profiles, making it difficult to focus on the best candidates. Moreover, extended hiring cycles caused by ineffective communication and insufficient real-time updates among stakeholders can decrease the overall efficiency of the recruitment process.

2. No Clarity

A major difficulty in lateral recruitment is the uncertainty in specifying job responsibilities and expectations. It is difficult to appeal to the perfect candidates when job descriptions are unclear or inadequately conveyed. Confusion and inefficiency in resume shortlisting may occur when the HR team and hiring managers do not align on the desired skills and experience. It is important to have precise job descriptions and consistent communication with stakeholders to prevent such problems and make sure the hiring process attracts the best-matched candidates.

3. No Behavioral Assessment

Evaluating a candidate's personality traits and cultural fit within the company is essential; for this, behavioral assessment is a good idea. Sadly, numerous lateral recruitment procedures do not include comprehensive behavioral evaluation, resulting in unfair decisions and possible mismatches.

4. No Capacity to Measure Domain Knowledge

Assessing a candidate's expertise in the field, along with their technical skills, is also a significant obstacle in lateral recruitment. Conventional resumes and interviews might not accurately assess a candidate's level of expertise. HR managers find it challenging to understand if candidates have the necessary domain knowledge for the role without efficient evaluation tools. This gap can result in hiring individuals who are not fully equipped to handle the job's technical demands, ultimately impacting the company's performance.

When Should You Consider Lateral Recruiting?

Lateral recruiting is particularly suitable for highly competitive industries where niche expertise is crucial. Companies facing talent shortages in specialized roles can benefit from targeting experienced professionals who can immediately contribute to their teams.

Additionally, lateral recruitment is invaluable during business expansions, mergers, or other significant transitions. In such periods, proven leadership is essential to navigate changes successfully and maintain stability. By attracting individuals who have specific expertise and a comprehensive knowledge of the industry, companies can guarantee a seamless transition and continuous growth.

What Does the Lateral Hiring Process Look Like?

Understanding the process of lateral recruitment can assist HR directors, HR teams, and business owners in optimizing their recruitment strategies and attracting top talent. Here’s a step-by-step guide to the lateral hiring process.

Assess Organizational Needs

Assess the company's present and future objectives in order to identify the necessary qualifications and experience for available roles. This guarantees that the correct individual will be employed to efficiently achieve business goals.

Define Job Requirements

Clearly delineate the particular abilities, background, and credentials required for the new position. This will help attract suitable candidates and streamline the hiring process.

Craft a Job Description

Develop an extensive job advertisement emphasizing the duties and requirements of the position. List essential skills and qualifications to draw top talent from the labor market.

Source Candidates

The success of lateral hiring depends greatly on research and reaching out proactively. HR teams should utilize professional networks, industry contacts, and social media platforms in order to discover potential candidates. This stage frequently requires the assistance of executive search firms or headhunters with expertise in locating skilled professionals within certain sectors.

Screen Resumes and Profiles

Once potential interested candidates have been identified, start the screening and assessment process. This involves carefully checking resumes to evaluate technical skills and experience, at least at a basic level.

Plan the Interviews

Organize interview schedules and prepare questions to assess candidates' skills and fit for the new position. Ensure a structured process to evaluate all potential lateral hires.

Conduct Interviews

Perform detailed interviews to assess candidates' skills, background, and compatibility with the organization's culture. Find the appropriate individual who can quickly start contributing to achieving business objectives.

Assess Skills and Competencies

Use assessments and practical tests to measure candidates' skills and competencies. Implement sophisticated evaluation methods, such as case studies, to assess problem-solving skills and expertise in the particular subject.

Negotiate Terms

Discuss job offers and terms of employment with the selected candidate. Ensure mutually beneficial agreements are reached, aligning with company policies and candidate expectations.

Finalize and Onboard

Finish the hiring process by completing paperwork and getting ready for the new employee's onboarding. Give the essential training and assistance they need to thrive in their new position.

Final words

Summing up, lateral hiring is a useful recruitment technique that targets experienced professionals from similar positions in other organizations who are usually not actively looking for new job opportunities. This approach brings in passive candidates with specific expertise and proven track records, adding immediate value to the company.

When employing lateral hiring, ensure clarity in job descriptions, thoroughly assess cultural fit, and use targeted outreach to attract the best candidates. Consider the potential risks and implement comprehensive evaluations to secure the right talent. By keeping these points in mind, businesses can effectively leverage lateral recruitment to enhance their teams and drive growth.

FAQ

What is the difference between lateral hiring and traditional hiring?

Most lateral hiring targets experienced professionals for similar positions from other organizations, often passive candidates. Traditional hiring typically involves entry-level roles and candidates actively searching for jobs using job boards and public advertisements.

Why should organizations consider lateral hiring?

Lateral recruitment fills skill gaps quickly with employees with proven track records, helping companies save time and meet business goals. This type of hiring brings expertise and fresh perspectives to the team, enhancing overall performance.

How do I ensure cultural fit when hiring laterally?

Evaluate cultural fit through behavioral assessments and in-depth interviews. Understanding personality traits and alignment with company values is crucial. Incorporate feedback from potential colleagues to gauge how well a candidate will integrate.

How can I attract top lateral talent to my organization?

Send personalized messages on social media platforms and professional networking sites to connect with potential candidates. Emphasize the opportunities for development, the position's influence, and the organization's culture to draw in top candidates.

How do I assess the potential for success in a lateral hire?

For an efficient lateral hire, use a thorough understanding of the position to perform technical evaluations, analyze cases, and complete hands-on assignments. Assess the candidate's established history in comparable roles and acquire recommendations from former employers to confirm suitability.

What are the potential risks of lateral hiring, and how can they be mitigated?

Potential risks include improper cultural fit and higher costs. Mitigate these by conducting comprehensive assessments, using clear communication during the hiring process, and offering competitive packages aligned with market standards.