Lateral Hiring : Meaning, Advantages and Challenges

What is Lateral Hiring?

Lateral hiring is a recruitment strategy in HR management in which companies look for experienced employees working in senior roles at companies. This is different from traditional recruitment because in this case, the company does not look for freshmen; rather, the recruitment team looks for someone from another company who is working in the same position that they want with the same salary. The main purpose behind this hiring is to hire someone who is already experienced and has sufficient skills and knowledge for the job role. In this article, we will learn about the process of lateral hiring and its advantages and challenges.

Advantages of Lateral Hiring

There are multiple advantages to lateral recruitment for both employees and employers, like:

1. Expertise: During lateral hiring, we look for employees who have previously worked for some organisations in senior roles. So, it’s obvious that they have good experience and expertise in that specific job role. They will bring their skills and expertise, which is an advantage we get from lateral hiring. Freshmen don’t have much experience, that’s why, laterally hired employees can add value to the company right away after joining. They can also share the best working practices and insights that they have gained from their experience working in different organisations. In this way, they can directly contribute to the innovation and growth of the organisation.

2. Time to onboard: Time to onboard is the time required by an employee from joining to starting working for an organisation. For a fresh employee, the company has to provide training and guidance, spend time teaching best working practices, etc., as they have not previously worked in any organisation. But in the case of lateral entry, employees know their work and don’t need much training and guidance to start working. In this way, lateral entry reduces the time it takes to onboard an employee.

3. Leadership Qualities: Lateral entry brings people with strong leadership skills. They could help build great teams and make important decisions for company growth. They will bring a different perspective and have a track record of success. This will save time which is required to train employees for leadership. Because of their strong leadership skills, they can help work on urgent projects directly.

4. Competitive advantage: It means the qualities or skills of some employees, which will give the organization an edge over other organizations. Hiring employees with good previous track records and achievements will give a competitive advantage to the company. They have some unique strategies and insights, which they have learned through experience or by working in different organizations. This will help the organization in making superior quality products in comparison to others and providing the best customer service.

5. Boosting employee morale: When the employees will notice that the company is focusing on experienced professionals for working in the company, it will increase their motivation, confidence, and respect for the company. They will feel good, working with skilled professionals. Also, the new lateral recruited employees will get a chance to form new relationships, their salary might also increase faster due to their experience.

Challenges in Lateral Hiring

1. Cost: The main challenge which arises when thinking about lateral recruitment is its cost. For hiring skilled, experienced talents from other companies, companies have to provide good compensation offers such as high salaries, more benefits, etc., which would be expensive for the companies. This is especially true for those companies which are having economic downturns.

2. Competition: Lateral hiring can be competitive because every organization wants to have a skilled and talented workforce. So, every organization looks for the same pool of talent, which will provide choices for experienced employees and create challenges for the organisations. Because of this, the existing employee may feel devalued.

3. Cultural fit and integration: Different organizations have different work styles, cultures, and ways of working, so it’s important that during the interview, employees are checked for cultural fit for their organization. Also, integrating new employees into the existing team could be challenging. So, human resource managers should encourage open communication, team building, and collaboration programs to avoid conflicts with existing employees.

4. Misalignment of expectations: The hired employees may be overqualified for certain job roles, which will lead to boredom, frustration, and high turnover rates for them. It will also lead to loss of skill and resources. So, clear communication about the expectations and requirements is urgent during the hiring process. Also, job roles should be made clear and descriptive to avoid these problems.

5. Potential Resistance from Existing Employees: The new employees hired by lateral entry might feel threatened because lateral entry employees are directly hired at higher positions. This can cause stress, concerns and job security in employees. To fix this, transparent communication should be made between employees and managers. Reasons for lateral hiring should be made clear.

Step-by-Step Guide to Lateral Hiring

Step 1: Understand your need and define a role accordingly

Before looking for employees, you need to have a clear idea of things, like what skills are required, what amount of experience and knowledge is appropriate for the role, what will be the company’s expectations from the role, and the impact or change the employee could bring. After getting these things clear, define a job role which reflects the main responsibilities of the role.

Step 2: Define a budget

Decide the total cost which you are going to spend on the recruitment of employees. It should include all costs to a company such as salaries, benefits like rent allowance, medical benefits, Provident fund, etc. Maintaining a proper budget is necessary for getting clear about how much to offer.

Step 3: Build a comprehensive assessment framework

For assessing whether the employee is suitable for the role, a comprehensive framework which could include several steps such as screening, online tests, interviews, and simulations is used. Also, you have to use reliable and valid tools for taking these assessments. They are urgent as they will tell us about employee’s knowledge, skills, abilities, and personality.

Step 4: Market the Position

To find out the best candidates for assessment, you can use various platforms of social media such as LinkedIn, and Instagram for posting vacancies, you should refer to the vacancies on job boards such as Glassdoor, and Indeed, portals such as Google Jobs, your website, professionals such as recruiters, consultant, etc. It is a very crucial step, you need to market properly as it will help in attracting the right candidates for the job.

Step 5: Contact, assess and offer

After deciding on the shortlisted employees, you need to decide on a date and contact them for assessment. You need to assess them based on established criteria. After deciding the best candidates from the interview, you should make an attractive and competitive offer to employees among with good benefits. You should also make them clear about expectations by the company and the terms & conditions. You have to send an offer letter to the candidate to get the signature of the candidate’s acceptance.

Conclusion

Lateral hiring is done mostly for senior roles in the company because the employees hired through lateral hiring are experienced and generally hired in the same role they did before in another company. This will have a lot of advantages for the employees as they help in maintaining a good balance, they don’t need much training and have leadership qualities. But to benefit from it, employees should be assessed properly and on different bases. This is a strategy that companies use to grow in a fast-changing world.