“The great thing about being an accountant”, as one, unnamed, CFO was explaining to me back in May, “is that 90% of your skills are transferable between different businesses, sectors and even countries”. Having completed six years at his current company he was looking for his next challenge. Understandably, he wanted to keep his options open and felt that in the process of learning about a new sector or culture he could offer a new perspective and set of ideas along the way.

It was interesting therefore, to have another conversation last week with the same individual, who this time was looking to fill a vacancy in his team. “It would be a huge bonus if we could find someone from within the sector”, he suggested.

Questioning him on his apparent hypocrisy (I know him relatively well) he was initially caught off guard, but eventually came up with an interesting answer. His suggestion was that the individual, the employee or candidate is generally quite open to risk, as it presents the opportunity for advancement, development and the satisfaction gained from learning about a new industry or sector. To be pigeon-holed for the entirety of a career that could potentially span 40 years or more would be to deprive oneself of these challenges. Ultimately, it is when we are outside of our comfort zones that we learn the most about our abilities and weaknesses.

Conversely, the business or employer is typically risk averse and time poor. It stands to lose out significantly by making a poor selection for a senior hire and does not have capacity for waiting 12 months for an individual to be up to speed on the challenges of their sector.

I had caught him changing hats. The first time, he conceded, he had been wearing his own hat, the second time that of the company.

The trend for in-sector hires seems to be increasing, and to my mind there are two factors to blame:

1. Post-recession companies are lean. They have limited resource available to wait for people for be at full capacity, to train or to develop them. They are generally in search of an ‘out-of-the-box solution’.
2. The information age gives us an excess of choice. Why settle for anything less than perfect? Candidates should meet all of the pre-established criteria. Often, this means finding someone who is performing a similar role in a similar company.

I must admit to also being part of the ‘problem’. The selection process is increasingly outsourced, whereas companies tend to be much more likely to take a risk when they aren’t paying an introduction fee!

There are obvious benefits to hiring from within the sector, but it is also worth considering the costs:

1. It is often said that the best entrepreneurs are newcomers to their sectors. They come with fresh ideas and an increased ability to innovate, to challenge the status quo and do things differently. Many of my most successful placements have shared this quality and have been lauded for the improvements and cost savings made.
2. Hiring an ‘out-of-the-box’ solution can have an impact on job tenure and company stability. The failure to give a new employee room to grow into a role and to develop within it will limit the lifespan of that individual in their role and increase staff turnover. The UK has the lowest job tenure in Europe and in our experience the highest propensity to make in-sector hires.

Of course, not every company hires in this way, and for some that do the intricacy or unique nature of their sector makes it a valid policy to do so. If you do tend to hire predominantly from within your sector, it is perhaps at least worth considering why.