4 Pitfalls to Avoid When Hiring from Your Network
Hiring from your network can be a great strategy – one that is efficient and cost-effective. But, make sure you avoid these four pitfalls!
Written by: Paul Cashman
In some ways, the life sciences market is fortunate. Record levels of funding are opening new paths to commercial success, making it possible for entrepreneurs and established players to turn their focus to a long list of unmet medical needs.
In other ways, the industry is under intense pressure. The sector’s rapid growth means more start-ups, leading to fierce competition for leaders with specialist skills. The phrase “war for talent” is increasingly apt.
In the face of great competition, it can be tempting to look for cost-effective, efficient, short-timescale solutions to hiring. Of course, the obvious and most intuitive for boards will be going directly to their networks. However, from a professional perspective, network-based hiring practices can be tricky. At a fundamental level, they disrupt hiring: adding referrals from your small set of executives to a generalized search means that your HR team is now using two parallel processes. And those processes will have different levels of oversight, varying degrees of complexity, other communication strategies, and mixed expectations.
If you’re going to hire from within your network, there are four significant pitfalls to avoid:
1. Perceived conflicts of interest.
When a subset of candidates is referred through a network-based process, those candidates will – intentionally or not – come with an implicit personal recommendation from the referring executive or board member. As a result, it can be difficult to escape the presumption that they will be the candidate of choice and effectively ‘passported’ into the organization, irrespective of how the process plays out.
The best way to counteract this concern is to implement extra measures to create a transparent, rigorous review process. Every candidate will need to be engaged in the same vetting process and invited to the same interviews, and both sets of reviews will need to be robust. Another strong option is to integrate a third-party assessment tool or service to guarantee a greater degree of neutrality.
2. Process quality.
This section expands on the fundamental problem of a dual-process hiring approach. We often see organizations initiate an executive search with the best intentions, only for the process to become fractured, disconnected, nonlinear, and inefficient quickly. This introduces a range of minor errors and innocuous delays that can leave a negative impression on top candidates.
At the same time, a new executive hire typically has a hard time finding their footing and establishing credibility if there are any doubts about the hiring process’s fairness, openness, or rigorousness. If it is – or appears to be – either hasty or incomplete, the new hire is often hamstrung in their efforts to begin making positive change.
3. Confidentiality and professionalism.
Expert recruiting in a specialist market requires total confidentiality. Small information leaks and even rumors can derail the hiring process entirely, jeopardizing the careers of the executives involved and damaging your firm’s reputation. The risk of these incidents links to the formality and professionalism with which the process is carried out. Relying on informal referrals makes it much more challenging to ensure confidentiality.
By contrast, a professional recruiter will have a set of procedures and mechanisms in place – coupled with strict standard practices – to guarantee that search processes remain non-public and secure.
4. Narrowness of search.
Turning to your network to fill a key position is typically done in response to time pressure: you need someone who can do the job right now. This usually backfires. The right candidate for the job is someone who’s a match for the company’s culture and direction, has the technical skills, is ready to do the work of building a new set of professional relationships, and is at the right point in their career for the unique demands of this particular position. Someone who happens to be free at just the right moment is, bluntly, unlikely to meet those criteria. As the saying goes, ‘availability is not a skill set.’
Instead, successfully filling an executive position requires a broad, deliberately structured, and very thorough search. The right person is out there, but finding them takes time. A deliberate approach is also most cost-effective in the long run since it saves on the costs of rehiring when a risky initial bet doesn’t play out.
General Best Practices
Whether network-based or professionally managed, any hiring process will produce the best outcomes when it conforms to several best practices. Below is our list of critical considerations:
- Provide transparency from the outset. Suppose you’re going to solicit referrals from executives, board members, and colleagues. In that case, your outreach needs to be clear that you’re making no promises and that they will be considered on equal footing alongside other candidates in a fair and rigorous process.
- Communicate proactively. Candidates must remain appraised of the status of the search. This responsibility usually falls to search professionals but should be managed by the firm for network-based hiring. While candidates don’t need constant updates, they should always know whether they’re still under consideration.
- Gratitude and relationship-building. Hiring can be an emotionally intensive process. Candidates’ futures are in the balance. Therefore, contact should adopt suitable relationship-building measures to ensure smooth completion, and you should express appreciation for candidates’ participation and time investment as soon as the process wraps up.
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