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Why are Recruiters Switching to Lateral Hiring?

What happens when you have been consistently ordering a Margherita pizza and a Choco lava cake every time you visit Domino’s Pizza? Well, you know the exact order you want to place. You know the crust and toppings you want over your pizza. You don’t waste much time thinking about what to order. Isn’t it? That’s what happens with lateral hiring too. Lateral hiring is nothing but hiring specialists in your organization for a particular job role instead of investing time in training entry-level employees—you know the skills and experience level you need in a candidate to fill this job role. In other words, you know your order! Many organizations believe it’s good to have a few specialist employees who know every next step they take at their job. And that’s why the majority of recruiters are switching to lateral hiring. In this article, we share everything about what lateral hiring is and the 8-step process we follow at HackerEarth to conduct lateral hiring.

What is lateral hiring?

Lateral hiring is a method of finding an employee who can do a similar job to the vacant one—with a comparable experience and background. Simply put, lateral hiring is the process of sourcing passive candidates to fill niche, specialized or executive positions. However, you may not find these people in your talent pool or on job boards. They are neither active in the job market nor actively seeking opportunities. Earlier, such hiring used to happen in specific industries like law, medicine, big businesses, and the government sector. But, with the pandemic, many tech companies have adopted the unconventional method of lateral hiring to fill vacant positions. Adrienne Couch, Human Resources Analyst, LLC Services emphasizes the same.

“Lateral hiring is becoming more and more popular. In fact, I’ve seen studies that say it’s set to overgrow by over 20% in the next five years. Lateral hiring is also a great way for companies to tap into the passive candidate market. These are people who may not be looking for a new job but could be open to new opportunities. By reaching out to them, companies can snag top talent they may have missed out on otherwise.”

How does lateral hiring work?

Assess your workforce and conduct a skills gap analysis:

  • what skills do they currently have?
  • what skills are they currently missing (but crucial for the company’s growth)?

Once you have studied the skills, define the skills you need from your lateral hire. For example, after studying the skills of web developers in your company, you realize they are well-versed in four languages: JavaScript, C, C++, and SQL. But, you need to upgrade the product, which requires a PHP developer. Now you have two options to do this: train your existing employees, invest financial resources, time, and effort in them to learn it, or onboard a new hire with these skills. Next, define what the role of this lateral hire would look like:

  • what are the tasks and responsibilities they carry out?
  • what would their OKRs look like?
  • how would this role benefit the organization?

Why use lateral hiring to hire top tech talent?

In a study by University of Bristol – School of Economics, Finance and Management, it was found that lateral hiring helps employers acquire, develop and retain human capital—to help improve the competitiveness and reduce the effects of outward staff mobility. Therefore it should be included as a part of recruitment marketing strategy. Let’s understand in detail how lateral hiring can elevate the growth of employers and organizations:

Reduces training costs

There are two ways you can fill in the requirement for new skills in your organization:

  1. train your current employees
  2. recruit new employees

Training your employees requires a lot of heavy lifting. You need funds, time, and effort to prepare them and develop these skills. Still, there is no guarantee that your employees will master them correctly. They’ll take time to learn and implement the skills. This is exactly what Cynthia Davies, CEO and Founder of Cindy’s New Mexico LLC points out.

“Lateral hiring can be beneficial for a company as it reduces training costs. Employees who are already familiar with the company and its culture, as well as the industry in general, require less training. They can hit the ground running in their new roles. Lateral hires can be more efficient and productive in their new roles quicker than external hires because they already know the company’s processes and systems.”

Reduces the risk of hiring the wrong person

Picture this: you want to hire a web developer with PHP expertise the traditional way. You post on job boards, publish the job ad and receive several applications. You scan the applications and shortlist a few developers. They have *only* basic knowledge of the subject and aren’t up-to-date with industry trends. Upon onboarding them, you realize that you still need to train them. Why? Because they have a strong theoretical understanding of PHP but need training on a few practical aspects of the job. That’s when you realize you have hired the wrong person. You needed an experienced employee who knows the ins and outs of what works and what does not and is not restricted to entry-level PHP expertise. With lateral hiring, you can scan the candidate’s profile, and check if their experience fits your requirements. Only then proceed with the next steps in your hiring process.

Also, read: 10 Tech Recruiting Strategies to Find the Best Tech Talent

The 8-step process for lateral hiring at HackerEarth looks like

Preethi Saakre, the Talent Acquisition Manager at HackerEarth shares an extensive 8-step approach for lateral hiring that we use in our organization. Lateral hiring process

Step 1: Get approval for the role

As a first step, the hiring manager identifies and approves the job role and the skills needed for a lateral hire—which is shared with the talent acquisition team. The talent acquisition (TA) team then works with the hiring manager to confirm the job description (JD). If it’s an existing role, they check with the hiring manager if any changes need to be made to the existing JD. If it’s a brand-new role, the hiring manager will share the roles and responsibilities, and the TA will add these roles and responsibilities to the set template. Next, the talent acquisition team creates the position on Trakstar and sends it for the CEO’s approval.

Step 2: Collect important details

Once the lateral hire’s position is approved, the talent acquisition team conducts an intake call with the hiring manager to understand the need for the role. To collect details about the job role, the TA team fills out a Requirement Gathering Form. They enter all the necessary details and share them with the hiring manager. Next, the hiring manager identifies panel members to be involved in the hiring process. They make sure that each member is aware of the expectations of the candidates and will be interviewing the candidates based on these expectations. They also identify who will handle the competency evaluation process at different levels of interviews.

Step 3: Share data about the talent pool

The talent acquisition team shares data on the overall talent pool available for the role with hiring managers. The TA team then creates a sample screened profile for the lateral candidate along with the hiring manager. This ensures that the sourced and inbound applications they share with the hiring manager are in line with their expectations.

Also, read: Optimize your Hiring Process with Recruitment Analytics

Step 4: Publish the approved position

The talent acquisition team publishes the approved position on job boards—LinkedIn, Glassdoor, IIM Jobs, and Instahyre. On the same day, the talent acquisition team shares the lateral hiring strategy and plan with timelines. They send an email to the hiring manager with the finalized timelines and the other details discussed over the call.

Step 5: Screen the candidates

The talent acquisition team conducts a candidate screening check. During the process, they make sure to follow all the set guidelines:

  • checking the communication skills
  • asking the role screening questions
  • communicating the CTC and notice period expectations
  • evaluating for culture fit
  • understanding the reason for leaving

Once they have screened the candidates, they’ll forward the candidate’s application to the hiring manager for review. Sidenote: If the candidate’s salary expectation is more than the budget for the specialized role, TA needs to communicate it with the hiring manager before proceeding with the conversation.

Also, read: 4 Different Ways to Create Coding Tests on HackerEarth (+Free Template)

Step 6: Use the STAR technique for interviews

Our recruiters and hiring managers at HackerEarth use the STAR technique to answer behavioral questions. When hiring managers ask behavioral questions to candidates, candidates have to give them examples of how they handled past situations or challenges. Put simply, behavioral questions help candidates share stories. Interviewers use these stories to identify the evaluate the candidate beyond their skills. Star Technique for interviews For example, the HackerEarth interviewer asks the candidate: “Can you tell me about a time when you went above and beyond to deliver an excellent customer experience?” Situation: “When I was working at company X, we were preparing for a video interview for a client when I learned that someone on their team was deaf. The presentation was due the next day in the morning and I was the only one left in the office after 5 PM.” Task: “I realized there was only one solution and that was for me to stay behind in the evening and add captions myself.” Action: “It took me a few hours, and around 8 PM, I was done. Then, I let our team know about the update.” Results: “In the end, the client enjoyed the presentation. They were very impressed (and surprised) by our attention to detail, and we ended up closing them soon after.” With this story the candidate shared with the interviewer, the interviewer learns about the candidate’s willingness to deal with challenging situations and their passion for work. Once the interviewers complete the interviews, they share detailed feedback and ratings on the same day. Sidenote: The interviewers record feedback on Trackstar.

Also, read: Essential Questions To Ask When Recruiting Developers Part 1 and Part 2 

Step 7: Conduct reference checks

Reference checks ensure that the lateral hire the company has recruited is the right decision. For this, recruiters reach out to the hire’s colleagues and ask them about the following:

  • their experience working with the person
  • the candidate’s performance while working with the organization

Answering these two questions give ample information about whether or not the right decision has been made.

Step 8: Send the offer letter

First, we make a verbal offer to the candidate, followed by an offer letter via Adobe. The candidate reviews the offer letter, signs it and it automatically gets recorded in the company’s records and the candidate receives a copy of the signed offer letter. Here’s how our talent acquisition team sent the offer letter to the new hire via Adobe.

Offer letter for new hire

It’s not discreet. It’s not different

If you have ever been told to carry out the lateral hiring process discreetly, it’s time to change that. Lateral hiring is just like the traditional hiring process you carry out in your company. The only difference: you hire specialists. So, whether you’re hiring internal or external candidates as lateral hires, the process remains the same except for a few tweaks in some hiring phases and policies. 

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