When managers hire, they typically search for an exact profile within the industry. For example, a textile company might seek an accountant with a background in textiles, or an automotive firm might look for an HR executive with automotive industry experience.
My claim: this is unwise for multiple reasons. Firstly, it reduces the talent pool significantly and unnecessarily. Many of the jobs sought require generic skills that can be utilized in any industry: such as accounting, administration, customer service, project management, data analysis, etc. Such standard skill sets are easily transferable between industries. A good accountant will function well whether in an industrial plant or a telecom. A good project manager will function well whether in a construction company or a bank. If employers restrict their radar to their current industries, they miss out on plenty of good potential candidates outside it. This can prolong the recruitment period and increase hiring costs. Companies competing for people in the same industry increase demand on talent with the same supply pool. This ultimately forces companies to offer higher salaries to fill their vacancies.
Furthermore, embracing inter-industry cross-pollination can yield significant benefits. There are numerous examples where industries have learned from each other. Retail companies learned from lean manufacturing and shop-floor design concepts to optimize customer flow, cashier queues and unloading and shelving products. The healthcare industry borrowed concepts from the financial industry to secure patient files and transactions. Health and safety practices in several industries have borrowed concepts in communication and coordination from the aviation industry. The software industry has borrowed agile value-chain concepts from manufacturing. The list goes on and on.
Recruiting candidates from outside the industry can break habitual practices within a company and perhaps the industry. The human mind tends to be locked in what it is familiar with and can seldom escape its accustomed paradigms. This is referred to as “industry fatigue.” Excluding candidates from other industries misses on innovation opportunities to think outside the box to solve typical industry problems. An extra-industry candidate is more likely to bring such new practices that can present original solutions for chronic industry problems.
Furthermore, candidates who are willing to change industries usually come with a level of enthusiasm that greatly contributes to performance. Their eagerness to learn and prove themselves in a new environment fosters increased engagement and a stronger sense of ownership. This is in sharp contrast when hiring from the same industry where these motivational factors do not exist.
Naturally this is not always possible, especially in industries where specific technical know-how is obligatory. For example, petrochemical plants seeking chemical engineers will probably need to limit their pool to chemical engineers who worked in petrochemicals. Still, a chemical engineer who worked in pharmaceuticals may still be suited in petrochemicals. Chemical processes in both will be different, but the broader concepts will probably be the same. New recruits often grasp the specifics of new industries in relatively short times, after which they are effectively up and running. HR departments need to have clear and specific understandings of job requirements, while keeping an open mind, to be able to identify such opportunities.
When it comes to C-Level Executives, confinement to the industry is futile. Executive leadership entails a skillset that is applicable and transferable across industries. It involves articulation of vision, strategy formulation, business acumen, financial acumen, leading and managing people, cash flow management to name a few. These are hardly industry specific. Executives generally do not need deep knowledge of low-level operations which are covered by teams and departments. They need to know enough to formulate strategies, establish plans, objectives and management frameworks that enforce organizational accountability. Their experiences and track records typically help them grasp the fine intricates of new industries quickly and smoothly. Sound executive leadership is scarce, and thus it is wise to cast a wide net, beyond your current industry, when seeking them.
To achieve better hiring companies need to apply more human-centric means of defining job requirements and evaluating candidates. Embracing a broad and adaptable recruitment mindset can unlock significant opportunities. While this shift may require initial buy-in and guidance from hiring managers, the potential dividends justify the effort.
Omar Kandeel
Adjunct faculty of Management at AUC School of Business
