The loss of potential employees isn’t just a part of employers’ imagination or fear but a reality these days. More workers are leaving their companies faster than the time it takes to replace their vacant positions. The U.S. Bureau of Labor Statistics confirmed that more than 4 million people quit their jobs voluntarily in Dec 2021, leaving behind a huge gap in the labor market. Some of the top reasons why employees left their organizations include uncaring leaders, unrealistic performance expectations, and lack of support for employee well-being, to name a few.
In such a competitive, talent-scarcity scenario, employers like you are competing for talent and are willing to offer adequate compensation/benefits. This is where lateral hiring comes into the picture. This has also become a part of the recruitment trend in 2023 in which many companies look forward to hiring the most qualified candidate for a job role.
Wondering what’s in it for your business? Let’s uncover various sides of lateral hiring in detail.
Defining Lateral Hiring as a Trend
Lateral hiring or lateral recruitment can be defined as the exercise of sourcing competent candidates from an external talent pool and then hiring them for organizational needs. It involves a specialized hiring process that aims at finding and recruiting experienced professionals having interpersonal and leadership skills.
Here, if you consider your competitors for the external talent pool, then lateral hiring can be simply defined as hiring professionals who are already working in a similar job position. This process is mainly used to look for candidates for positions that are hard to fill.
Besides this, it can be quite challenging for the HR teams to succeed in lateral hiring and convince qualified professionals to make a job switch. It is because candidates who are looking to make a career move will do so when attracted to additional perks and adequate compensation. In such situations, the candidates being considered in your candidate pipeline have the upper hand as they possess the requisite skills and expertise.
While commensurate compensation is one factor to attract such candidates, it is important to build and sustain a strong employer brand. Factors like learning and development opportunities and flexibility at the workplace also play a critical role in the lateral hiring process.
Want to know how the lateral hiring process unfolds? Continue reading.
Process of Lateral Recruitment
By structuring the lateral hiring process, you can benefit from improved hiring efficiency and reduced costs. Here are the steps to be followed in this process:
1. Candidate Shortlisting
The first step starts with shortlisting candidates for pre-screening from a pool of resumes based on the job role. This may also require extensive search and outreach on social platforms like LinkedIn to find potential candidates for lateral hiring. If you can further simplify the shortlisting part by diving into the candidate pipeline you might have built over time.
Bonus tip: Make sure your shortlisting criteria do not discriminate against legally protected classes to avoid any issues later.
In the hierarchy of the process, shortlisting of candidates next to finding the right candidates but before further assessment. Based on the desired criteria for the open job position, you can then move forward to the next step of building the competency framework.
2. Competency Framework Setup
With the help of a well-defined competency framework, you can assess the candidates’ performance in relation to building a healthy work culture. It is about creating a balance between certain standards that are prerequisites to hire right but not too stringent that it unnecessarily screens out several qualified candidates.
To create a competency framework, you will need a clear job description that covers all the job-related details. The framework must also include the qualities and traits of top-performing employees who have previously served in that role. You can also involve the line manager and subject matter experts to incorporate various behavioral attributes into your framework.
Once it is done, you can then proceed with creating similar frameworks for different job positions to be covered with lateral hiring.
3. Skill Assessment
The next step in the process is to assess the skills of qualified candidates who are willing to take the leap and join your organization. A pre-screening test can help here in gauging their knowledge and skills. At this step, having a library of pre-built tests for different requirements helps a lot. You can either select from these tests or customize them for a specific requirement.
In addition, you can also use simulators to test coding or management skills by presenting real-world problems in a virtual environment. Here, the primary aim is to look at the approach followed by the candidates to solve a problem with their decision-making skills.
4. Interview Structuring
A structured interview involves presenting a fixed set of questions in a particular format to various candidates attending the interview sessions. This will help your hiring team in collecting similar information from multiple candidates and then grade them without bias. Also, you can easily compare the candidate responses to ensure an effective interview through relevant questions only.
As a whole, it provides a sense of direction by highlighting the interviewees’ funnel at different states of the selection cycle. When followed with competency-based interviews, the structured process makes it easier for hiring managers to enlist competencies, set weightage on different types of questions, and mark candidates accordingly.
5. Data-backed Candidate Selection
Once you have finalized a few candidates post-interview for final selection, you can benefit from data analysis to follow a more targeted approach toward lateral hiring. For example, you can use standardized data sets or industry benchmarks to rate a candidate’s performance in different sections of the assessment based on the time taken.
This will ensure that you filter down candidates based on the skills and experience required for a job position and hire them at a quicker pace.
Why Skills and Experience Matter the Most With Lateral Hiring?
Finding an ideal candidate is no easy task and it becomes even harder with a bad screening/interview experience. If you look at the numbers, 30% of job seekers have left the job within three months of hiring (Source). Besides this, more than $11 billion is lost per year because of employee turnover.
To stay competitive in your industry, you want the best professionals to join your team. To get them, you must ensure that you are eyeing the right skills and experience for lateral hiring. As much as you assess candidates for your organization, they’ll also research if your company is worth their time. At the convergence of the two lies a job offer with adequate compensation that is mutually beneficial.
Common Challenges HRs Face with Lateral Hiring
1. Inefficient hiring
When companies switch to lateral hiring beyond their traditional hiring approach, they tend to lack efficiency in the process. It is because shortlisting of candidates followed by in-person or video interviews does not necessarily ensure that the chosen ones are the best hires. Besides this, if the process followed is incapable of weeding out less relevant profiles, it can further escalate the timeline and cost associated with the recruitment cycle.
Since lateral hiring motive is to hire for a role that requires specific experience and skills, you need a stringent candidate filtering process for the best results.
2. Lack of clarity
Hiring experienced professionals for specific roles may also require the hiring managers and even CHRO to get involved. However, the top management has a lot on their plate to attend to daily, which makes it inconvenient for them to keep an eye on the ongoing recruitment process. This can result in the lack of clarity and real-time updates in lateral hiring, hence making the stakeholders feel like being misaligned with the task.
3. Lack of behavioral assessment
With lateral recruitment, the primary focus is on the experience and skills of a potential candidate. When these criteria are ticked, many hiring managers skip the step to analyze the behavioral attributes and personality of the selected candidates. As a result, hiring decisions, when made based on a candidate’s vibe, may be susceptible to bias. If the candidate finds it difficult to align with the organization’s culture, she/he is most likely to leave within a short period and increase the hiring cost alongside.
The challenge here is to gather the means to hire candidates laterally that is also the right cultural fit for the company.
4. Inability to measure domain knowledge
Candidates getting hired through lateral recruitment mode have their past experiences and key skills mentioned on the resume. For many HRs, it is highly subjective to analyze the domain understanding of the shortlisted candidates. Here, conducting an aptitude test does not suffice to ensure good quality of the hire. The worst part is – many employers do not have the required means to assess the technical know-how, which becomes a bigger roadblock in the later stages of lateral hiring.
Steps to Streamline Your Lateral Hiring Process
One of the most common problems that arise with lateral hiring is that the new hires face onboarding issues and are not properly integrated into the new organization’s culture. Step into the shoes of a lateral hire and envision the following scenario –
On your first day at work, you are quite pleased that you have negotiated a good compensation package and the company seems to value your efforts. However, when the day starts, you are told about the work without even introducing you to the management or other senior folks in the team. You have no idea where to find certain work files and there’s no such training in place.
In such a situation, it is more likely that you would look for better opportunities instead of staying to get the dust settled.
Here, the problem is related to employee integration and company culture, which can be improved in the following steps:
- Plan a holistic employee onboarding strategy, particularly for lateral recruitment
- Add a robust orientation program to make it easier for the new hires to access the information they need at work
- Assign a peer or mentor to navigate them through their first few projects
- Provide periodic feedback on their work and ask about how they settle in
How Can a Staffing Agency Help?
Look at the lateral hiring process detailed above again and you will realize that it all starts with sourcing the right candidates. Before your team engages with prospective candidates, finding the right talent pool is crucial. This is where a reliable staffing agency can help streamline the lateral hiring process. Learn More about Hiring During A Recession.
Speed Up Lateral Hiring with Connect Tech+Talent
Sourcing the right candidates for lateral hiring is quite important. While it takes time and effort to find potential candidates, you can ensure the quality of new hires with Connect Tech+Talent – a reliable staffing agency in Austin. To discuss your hiring needs, click here.