Opinion: Hiring laterally

By Robert Halton, global chief people officer, DLA Piper

When McKinsey coined the phrase ‘the war for talent’, they gave us a phrase with long-term currency. For professional-service-sector organisations the need for talent is business critical. People are what differentiate organisations; people are the source of competitive advantage; people are strategic. Home-grown talent is the ideal solution for organisational growth but it is a relatively slow and long-term process. The expansion of the large professional-service firms since the 1990s would not have been possible unless it was supplemented by lateral hiring of talent from within the sector. So achieving expansion is a product of organic and lateral growth.

In order to be successful in attracting laterals, an organisation needs to have a clear vision of where the organisation should be in the future, coupled with a track record of success. Without either of these two ingredients, the pull factor into the new organisation is severely restricted. This does not mean to say that people will not move, but the reasons for the move may not bode well for the future. Laterals may be attracted by a significant shift in remuneration, they may be ‘over sold’, and there may well be a significant push factor from their current organisation – all factors that can create future problems.

Ideally, the hiring of laterals needs to be planned carefully against agreed strategic imperatives, but we all know the ideal world is not the one we live in. All too often lateral-hiring opportunities present themselves on an opportunistic basis. When they do, knowing when to say ‘no’ is crucial. The process can often resemble a courtship where there are other suitors involved, but the process of attracting people to the organisations needs to be carefully balanced with a judgment as to how the individual is going to fit in culturally, and what the impact is going to be on other members of the organisation.

Typically, we think of lateral hires as being about the recruitment of individual partners, but the dynamic in the marketplace has changed considerably. While the recruitment of individuals remains important, more often than not there are now teams, business units and indeed whole organisations involved. As a result, and as organisational brands become stronger within the sector, the promise of results needs to be carefully evaluated. When looking at an individual, most important is an ability to build new business and original work – rather than serving existing clients. In the case of teams and business units, this is less of an issue, but the impact on existing departments and teams is more significant.

Despite the risks inherent in the hiring of laterals the potential rewards are significant for both parties. If your organisation has a tradition of being open to recruiting at a senior level then you will know that the organisational culture will change and what is crucial is how the leaders in the organisation help all concerned to adjust. Lateral growth needs to be coupled with organic growth because the latter provides the bedrock on which a successful organisation is built. Attention also needs to be focused on building the careers of your own people and expanding opportunities for them as the organisation grows. It is important not to be seduced into thinking that you have to look externally for talented people when you have them in the office next door.

So growth requires leadership and leadership requires courage – to make big commitments to your own people and to those that your organisation needs to expand into new areas of business and enhance the talent base of the organisation as a whole.

Even when a lateral hire accepts a job offer, due diligence is satisfactorily completed and notice periods served, the process is far from complete. All too often senior laterals are neglected. There is probably more resource focused on the induction of graduate trainees. Why? The answer lies in an assumption that the lateral hire will be able to look after themselves because they are a senior person and wouldn’t have been recruited if they couldn’t build a business on their own initiative. But however senior or experienced a lateral is, they will not know their way around your organisation, they will not have a network of people to link into, they will feel exposed and they may feel vulnerable. We are dealing with people who need to be looked after – and feel valued.

Building a new organisation takes time, commitment and a willingness to change. There needs to be a careful balance between short and long-term priorities, and a culture of people working together to achieve a common purpose. Good financial due diligence, careful planning and thorough research are all important but the most important ingredient for success is cultural fit. Get that right and a lateral hire will be successful and thrive. Get it wrong …

Robert Halton is global chief people officer at DLA Piper UK LLP. He can be contacted at robert.halton@dlapiper.com.