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Sorry, competitors – how to get the most from lateral hiring

Even given these restrictions, the benefits clearly outweigh the negatives and lateral hiring is here to stay

Encouraging your competitor’s staff to join your company can make doubly good business sense: not only do you get to recruit a competent member of staff, experienced in the industry or sector in which you work, but also your competitor loses out. It is rarely put this crudely, of course. The recruitment industry calls this ‘lateral hiring’, as the new member of staff is often recruited into a role at the same level but with better pay or conditions to encourage them to move.

It is not unusual for the move to involve not just one person but a whole team, especially in finance, IT and law. The CIPD recently quoted a survey that revealed over 70% of the top UK law firms believe the quickest way to increase profits is to recruit an entire team.

It seems that this time of year – autumn – is the poaching season. Many senior staff are too busy to spend much time reflecting until their summer holiday with the family; afterwards, some decide that they can have a better working life with a different employer. This suits the recruiting company well because the new hire has six months to settle in and make their mark before the end of the financial year.

These new recruits do not just bring their talents and experience, of course. They can also bring something equally valuable – business contacts and networks. They do not need training and the new company knows that they will be able to perform in their new role because they have seen them doing the job at the previous company; therefore, it is considerably less risky than hiring someone they do not know.

This type of recruitment process needs a delicate touch, however, demanding skill, tact and discretion from the recruiter. The current employer must not suspect that the employee is thinking about leaving; therefore, it is not possible to take up references in advance.

The new employer can carry out research by looking at online sources such as LinkedIn; however, senior employees who have never needed to go job hunting may not have an online profile. In any case, it may be the policy of their current employer that employees do not have online profiles, precisely to deter attempts at luring them away.

Many companies make their employees sign contracts that contain the equivalent of a ‘poison pill’; for example, the employee is not allowed to join a competitor for three, six or 12 months; the employee must serve a lengthy notice period, during which they will be on gardening leave; and/or there will be restrictions in place with regard to dealing with existing clients. These provisions are designed to make the employee less attractive to other organisations.

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