Why lateral hiring isn’t your average recruitment

Last updated:
February 26, 2021
August 29, 2022
min read
Adrie Smith
lateral hiring
Table of contents

If you’re unfamiliar with the term “lateral hiring” don’t worry, not many recruiters are. Lateral recruitment is the domain of HR executives or external search specialists, also known as headhunters. The whole process differs substantially from traditional, accepted recruitment and selection process policies.

When you’re working on a lateral hiring project, everything that comprises standard hiring processes goes out the window. That’s how it’s meant to be because your whole approach has to be different. This is no ordinary hire!

What is lateral hiring?

It is the process of sourcing suitable passive candidates to fill a niche, specialized or executive positions. These people won’t be found in your talent pool or on job boards; they’re not active in the job market. Although lateral hiring can be utilized in any industry, it’s most commonly found in professions like law, science, and medicine, as well as big business and government.

Candidates targeted already have a thriving career, a well-established industry reputation and are often experts in their field. They have all the soft and hard skills needed for success.

Sometimes companies want their specific abilities to fill critical roles that are affected by the growing global talent shortage. Or an organization might need to go through growth or transition to remain competitive, and they need their expertise onboard to meet business goals.

Hands-on input at an executive level is not negotiable

This is a particular type of hire and usually expensive. Executives must carefully consider the impact that the new appointment will have on the existing management and executive team. They also need to clarify the sustainability of the role and have a realistic long term growth and impact plan for the position.

The vacancy to be filled has to be very prudently analyzed and planned. Budget parameters need to be clearly defined, and often, the job title will need to be amended, or created. The job description mostly needs to be compiled from scratch, and the deliverables clearly defined.

Only board members and the executive team can handle insight and decisions at this level. Opting for a lateral hiring search is often because the executive team have already identified someone that they want onboard. Otherwise, it’s because finding the right person will be tough going.

It’s an outbound process

Most methods to attract talent include social media, job boards, employee referral programs, and mining your talent pool, so it’s an outbound and reciprocal inbound process. In other words, you put the word out through various platforms and invite candidates to apply.

Lateral hiring is usually a quiet, and often secretive process. Word doesn’t go out that “we’re hiring” and negotiations with prospects is kept under wraps. Typically, only board members and the executive team are kept in the loop of progress and make up the hiring team. This type of hiring won’t be shared on the company’s ATS. Management and staff are generally kept out of the picture until the new hire is announced.

Why all the secrecy?

It’s mostly to protect candidates, but also to protect company information from the competition and, in big business, from media scrutiny. As mentioned earlier, potential candidates aren’t in the job market, and these roles are often created to avert disaster or at times of transition or expansion.

If pertinent business news is released into the market prematurely, it can be a problem. For example, if two companies are planning a merger, they wouldn’t like it to be known until it’s a reality. If it’s made public too soon, shareholders and customers could become rattled.

When to use lateral thinking and what the process looks like

The ideal scenario is to first appoint an industry expert to ensure that the merger benefits both organizations, and then to break the news. That’s where lateral hiring comes in. The brief would be to find someone who has an impressive track record of successful mergers whose appointment will boost confidence in shareholders and all other stakeholders.

Once the new role has been defined, executives must decide who will manage the search process. It will seldom be a recruiter. Usually, an HR executive or even the CEO will assume responsibility for the lateral hiring planning and operation. Done correctly, it’s a very focused and time-consuming process, so sometimes the project will be outsourced to an external executive search specialist.

Whoever is responsible must have all the information about the role and the company’s business plans and goals beyond what is usually made available. They must also have a thorough understanding of the purpose of the role and the boundaries of remuneration and benefits.

If the executive team have already identified someone they want on their team, they’ll usually approach an external consultant to contact the individual. It’s generally because the person is already employed by direct or indirect competition. Poaching staff from your competition isn’t seen to be professional, but it happens every day. Using an external consultant just veils the intent to keep up appearances.

8 necessary steps of lateral recruitment

If no candidate has been identified, a search will need to be undertaken. Because of the uniqueness of each role, the tactics will differ from one project to another, but here’s an outline of the basics:

1. Define the industry

The person has to have an in-depth understanding of the industry and be able to understand the situation, challenges, and opportunities. They have to have a proven track record of success within the industry. Each industry has its own unique hurdles, but equally, its own channels to achievement. Not everyone who succeeds in one sector will necessarily do so in another.

2. Define the critical skills required

Companies will only opt for later hiring when there’s a specific, and often dire, skill needed. This type of hire comes in to strengthen and develop the business. You have to know precisely what skills are required and then confirm that your targeted prospects are very knowledgeable and experienced in these areas.

3. Identify potential prospects

With the first two steps under your belt, you can start identifying prospects who meet the criteria. Your search net will likely have to be cast far and wide. You might have to venture into other states and often different countries.

4. Thoroughly research every individual

Once you’ve compiled a shortlist of potential prospects, you have to research them very carefully. At this level, you’ll often find press coverage about these people and the organizations they work for or have worked for previously. Follow that paper trail.

Also, look for articles and expert opinions and findings they may have published. Many companies publish details about their executives and senior management. See what you can find.

5. Discreetly make contact

If someone ticks all the right boxes, it’s time to make contact. This is a very fragile stage in any lateral hiring project and must be handled with skill and discretion. It’s unlikely that this person will be flattered by having a search consultant contact them; they’ve achieved many goals and have a solid business reputation.

Also, you’ve been digging up history on them, and some people could find that a bit offensive. When making the first contact, the less said, the better.

Introduce yourself, ask if they’ll afford you a few minutes and then tell them that you have an opportunity that’s befitting of their skills and position. Would they be interested? Nothing more. You can do this by phone, email or text, but make sure that you use confidential contacts only.

6. Meet up

If the person isn’t interested, don’t pursue them. Thank them and drop off their radar. If they’d like to know more before they decide, send them full details of the role. Tactfully keep in touch and always try to meet up as soon as possible. Never ask for a CV or anything else. At this stage, all the leg work is up to you.

If they’re interested and would like to discuss the opportunity, you’ll have to fit in with their schedule. This means that you might have to meet them after hours or over a weekend. If they’re from out of town or in another country, arrange a video call or skype meet up at a time that suits them. The meet up is a discussion, not a Q & A session. No interview questions, but you can make a list of things you’d like to discuss.

7. Negotiate

Lateral hiring usually enters the negotiation stage very early on. Why should someone who’s employed and successful leave their job and join your organization? Because these people are very valuable to employers, they might already have many benefits beyond just a cash salary.

They’ll want to keep those benefits or be compensated equally. Apart from that, why would they want a change? Often the challenge is a motivating factor. Big business brands can be another reason as can the opportunity to work in another state or country. If relocation is part of the deal, your company will have to foot the bill.

8. Offer

If a prospect becomes a candidate, you have to formulate an offer and work very fast to keep them interested. Make sure the offer meets their expectations because you’ll only have one chance to bring them onboard. People at this level have no reason to haggle; they’re already employed and successful.

What can go wrong?

There’s plenty that can go wrong! As much as you’ll research the candidate, they’ll research your organization. The slightest hint of anything that can negatively impact their career or reputation will see them withdrawing from the process. That’s why it’s vital to keep the entire process fair and transparent and share the good and the bad with them; don’t sugarcoat anything.

Another problem is that many lateral hires fall out quite quickly, and mostly because they’re not a good cultural fit for the company. That’s why it’s usually a good idea to involve an external consultant who can look at the appointment objectively. Also, candidates will be more willing to speak openly and share information like a CV with a consultant.

Taking on a lateral recruitment project isn’t for the faint-hearted. With so much at stake for both parties, whoever manages the project must be experienced, confident and professional.

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