Currently, the hiring methods are undergoing a significant transformation. Amidst the new techniques being introduced, lateral hiring is rapidly gaining attention. Companies use this strategic approach to hire experienced professionals who can instantly contribute to the business.
According to a study, 69% of organizations are dedicated to hiring lateral candidates, demonstrating a significant shift from traditional strategies.
Unlike other hiring strategies, lateral recruitment concentrates on people with a proven track record, industry knowledge, and specialized skills. Organizations can attract and onboard the best fit efficiently with a comprehensive hiring process.
In this article, we'll cover what lateral hiring is, its benefits and challenges, the five key steps in the process, and best practices for success.
TL;DR
- Lateral hiring focuses on recruiting experienced professionals for mid-to-senior-level roles, enabling quicker contributions to the company.
- It provides access to specialized skills, reduces onboarding time, enhances diversity, and minimizes training costs.
- The process involves identifying hiring needs, sourcing candidates, assessing skills, conducting competency-based interviews, and making a final decision.
- This approach accelerates business growth by bringing in expertise that drives innovation and productivity.
What is lateral hiring?
Lateral hiring is a recruitment strategy that focuses on hiring experienced professionals from outside the company to fill mid-to-senior level roles. Unlike entry-level hiring, lateral hires already possess the necessary skills and industry expertise, reducing the need for extensive training and allowing them to contribute immediately.
Benefits of Lateral Hiring
- Faster Onboarding and Immediate Impact: Bringing in experienced professionals allows them to quickly contribute to the organization, reducing the time it takes to integrate new talent.
- Specialized Skills and Expertise: This hiring strategy allows companies to access highly skilled individuals with industry-specific knowledge, helping to fill critical gaps.
- Cost and Time Efficiency: With lateral hires, companies can save on training and development costs, as these professionals require minimal onboarding and can immediately add value.
- Boosts Innovation and Growth: By bringing in seasoned professionals, this strategy fosters fresh perspectives, which can lead to enhanced problem-solving, innovation, and overall business growth.
- Diversity and Organizational Strength: Adding new talent strengthens the workforce by introducing diverse skills and backgrounds, promoting both inclusivity and creative solutions within teams.
Challenges of Lateral Hiring
This approach presents several challenges that organizations need to navigate to ensure effective recruitment and long-term success:
- Lengthier Hiring Cycles: The process of sourcing, evaluating, and negotiating with experienced professionals typically takes longer, which can extend the overall hiring timeline.
- Accurate Role Alignment: Ensuring that lateral candidates' skills, experience, and expectations align with the job requirements can be challenging, leading to potential mismatches.
- Evaluating Technical and Cultural Fit: Lateral hires may excel technically but struggle to fit within the company culture. It's crucial to assess both technical abilities and how well candidates will integrate with the team's dynamics and organizational values.
- High Salary Expectations: Experienced candidates often demand higher compensation, which can create budget constraints and lead to pay disparities within the existing team.
- Talent Retention: Lateral hires may leave if their career growth expectations aren’t met, leading to higher turnover and increased recruitment costs.
Lateral Hiring vs Performance Calibration
Lateral hiring and performance calibration are two vital strategies for workforce development. Recruiting experienced professionals from outside the company to fill key mid-to-senior-level roles allows the organization to quickly gain new skills and expertise.
In contrast, performance calibration is about assessing the existing workforce to ensure that performance evaluations are fair, unbiased, and aligned with the organization’s strategic goals. It helps ensure that employees are evaluated consistently and equitably, supporting internal growth and performance improvement.
Both strategies are critical for comprehensive workforce planning: external recruitment fills immediate skill gaps with new talent, while performance calibration ensures the existing team is continuously optimized to meet the company’s evolving needs.
Key Differences Between Lateral Hiring and Performance Calibration
The table below showcases the difference between the two:
The Lateral Hiring Process: Step-by-Step
This hiring approach needs a comprehensive approach to ensure that the right talent enters the company. With AI-driven tools and skills evaluations, organizations can simplify this process. Here is the step-by-step guide.
Step 1: Define the Hiring Requirements
Before initiating the lateral hiring process, HR teams should define the specific roles, skill gaps, and long-term business objectives that need to be addressed. Key questions to consider include:
- Which roles need immediate filling and why?
- What essential skills and experience are required for success?
- How will new hires contribute to business growth and strategy?
A comprehensive hiring approach ensures that the strategy aligns with business goals.
Step 2: Source and Screen Potential Candidates
HR teams have to use multiple source channels to discover the right candidates. These channels include:
- Internal talent mobility to promote in-house expertise
- AI-powered skills inference tools that analyze resumes and predict candidate potential
- Referrals, professional networks, and job boards
iMocha, an AI-powered skills intelligence platform, can help companies discover candidates with potential, ensuring a more effective and broader talent pool.
Step 3: Assess and Evaluate Skills
Assessing candidates' skills is critical for successful lateral hiring. iMocha offers AI-powered skills assessments that help:
- Customize evaluations based on industry requirements and specific job roles
- Utilize AI-driven proctoring to ensure integrity and prevent cheating
- Offer over 3,000 ready-to-use skills assessments for both technical and soft skills
These assessments help companies filter high-potential candidates, ensuring only the right ones are moving ahead.
Step 4: Conduct Competency-based Interviews
Competency-based interviews are essential for evaluating candidates’ technical expertise, leadership potential, and problem-solving abilities. With iMocha’s AI-driven automated video interview, companies can:
- Quickly assess candidates using automated scoring
- Gain AI-powered insights on response quality, tone, and body language
- Implement structured, standardized question formats to ensure an unbiased evaluation
This helps conduct interviews fairly and allows recruiters to make data-backed decisions.
Step 5: Make Final Decision and Negotiate Offers
After completing the previous steps, decision-makers should evaluate candidates based on:
- Interview performance
- Skills assessment outcomes
- Compensation expectations and cultural alignment
- Offer competitive compensation and present career growth opportunities to ensure successful negotiations
Effective negotiation ensures the chosen person feels valued while being hired within the budget. Clear, transparent communication on expectations, career growth, and benefits will help strengthen the chances of securing people with high potential.
Best Practices for Using Skills Assessment in Lateral Hiring
To ensure the effectiveness of hiring, the skills evaluation should be strategic. Here are some best practices to implement:
- Choosing the Right Assessment Tools for Different Roles: One assessment cannot be used for different roles. Use relevant tests, such as portfolio reviews for creative jobs, situational judgment tests for managers, and coding tests for tech roles to ensure effectiveness.
- Customizing Assessments Based on Job Complexity: Personalize tests based on the available role and job requirements. For instance, a specialized test would be appropriate for an expert, a scenario-based evaluation for mid-level, and an essential skill assessment for entry-level candidates.
- Avoiding Bias in Skill Evaluations: To ensure fair hiring, use AI-driven proctoring, blind assessments, and standardized scoring. Structured evaluations further avoid favoritism.
- Using Insights from Skills Intelligence Platforms to Refine Hiring Strategies: A skills intelligence platform can provide AI-driven analytics that helps predict future skill demands, benchmark talent, and evaluate hiring trends. Companies can also monitor data being assessed to optimize hiring and enhance efficiency.
Conclusion
Lateral hiring is an effective strategy for quickly filling skill gaps with experienced professionals who can contribute immediately. While it offers benefits like faster onboarding and access to specialized talent, challenges such as cultural fit and high salary expectations must be managed.
By following a clear process and best practices, organizations can overcome these challenges and ensure successful integration. When done right, this strategy can drive growth and strengthen the workforce.
FAQs
How is lateral hiring different from traditional hiring?
Lateral hiring targets experienced professionals from outside the company for mid-to-senior roles, bringing specialized skills and immediate contributions. Traditional hiring, on the other hand, focuses on entry-level candidates who need more time for training and adaptation.
What are the key aspects of lateral hiring?
Lateral hiring focuses on recruiting experienced professionals for roles with a similar hierarchy to bring immediate value to the organization. It helps fill skill gaps quickly and ensures the new hire can contribute effectively without extensive training.
What are examples of lateral hiring?
Examples of lateral hiring include a senior manager from one company joining another in the same role, a software engineer with specific expertise being hired for a senior position at a different company, or a director of operations moving to a similar leadership role at another organization.
What is the difference between lateral and vertical hiring?
Lateral hiring involves recruiting experienced professionals from outside the company to fill similar or equivalent roles, while vertical hiring focuses on promoting internal employees to higher-level positions within the organization based on their performance and potential.
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