|One of the starkest changes that I have personally noticed over the past 30 years recruiting for the financial services industry is the reluctance of hiring managers to hire from outside their exact industry / sector / comfort zone. While no one can dispute that for certain positions, industry expertise is an absolute necessity (regulatory, trading, compliance, etc….), there are many positions that can be filled (often by superior talent) that have made industry experience an absolute requirement.
Historically, it was very common that companies would hire based on talent, skills, and potential with less emphasis on specific industry experiences. With each passing year, it seemed like this situation continually decreased to the point that many companies would not even consider interviewing candidates unless they were currently working in their defined space, even if the position did not require any industry specific knowledge (general accounting, sales, FP&A, technology, to name a few). Even within the financial services community, the flow of candidates transitioning from one area to another (banking, hedge funds, private equity, venture, crypto, etc…) has waned dramatically.
There is no doubt that hiring from “within” often has several advantages, including familiarity of industry specific insights, similar workplace cultures, knowledge of the competitor landscape, and potential ease of transition to name a few. However, the safe route is not always the best route, as far too often, hiring companies / managers bypass more talented and motivated individuals for fear that the transition might not go smoothly.
Over the past couple of years this trend seems to be reversing itself, and most certainly with greater frequency over the past 12 months.
Among the many potential benefits when hiring from “outside” are increased innovation and adaptability. Far too often, those that have worked within a particular sector for an extended period develop industry fatigue. Just because you have “been through the wars” does not mean that you are best equipped for the next battle. Fresh thought and innovative thinking from “outsiders” often offer a roadmap to problem solving. There is great benefit to learning how other industries or similar sectors deal with issues and challenges and adapting those solutions to your business. Additionally, those new to the industry also tend to be more amenable and open to new ways of working, whole candidates who have been in the sector for a while can become comfortable and set in their own way of doing things (bad habits?).
As we continue to evolve our hiring practices and recognize the greater importance of “soft skills”, we see that many are in fact industry agnostic. These include, analytical aptitude, initiative, priority management, communication, work ethic, leadership, teamwork, intuition, organizational skills, and problem solving.
By opening up your search parameters slightly, you also open new doors to hiring great potential. Including candidates with significant “upside”, rather than just exact matches allows great opportunities to develop employees and help them build their careers with you. It also keeps employees engaged for longer and helps to increase your company’s retention rate, which is a huge problem in today’s marketplace. Keep in mind, that many skills can be taught, but changing attitude is far more difficult.
Lastly, widening your talent search pool will encourage the development of a more diverse culture. Experience has taught us that if your candidate pool consists of potential employees with similar experience levels, ethnicities, and educational backgrounds, you are missing out on great hires, and it might be helpful to broaden your search and look for talent from other industries.
To what extent companies will continue to expand their search parameters is still to be determined. We will continue to monitor this situation and report back periodically. If you are a hiring manager struggling to hire the right talent, or a job seeker looking for that next great position, perhaps opening up your candidate search pool a bit, might just be the answer.
Feel free to reach out directly to discuss this topic further as well as any other questions or concerns regarding the current hiring climate. I