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The Alternative Board Blog

Your Best Employee May Not Have Industry Experience

Jul. 23, 2013 | Posted by The Alternative Board
Phil Blog-1

I remember when I joined my TAB board in 2003, one big question I had concerned how business owners from unrelated companies could be helpful to me in my business. I quickly learned that insights from outside my industry were often more helpful than those from inside.

In much the same way, employers overvalue “industry experience” when looking for talent to hire. Hiring managers tend to believe that candidates with industry experience will be able to hit the ground running or contribute from day 1. Managers also think that training time and cost will be reduced when hiring industry veterans.

To validate whether these ideas are true, I challenge you to a little thought experiment:

Think about your all-time-favorite employee.

Who is that person?

What would your life be like if your company was full of employees like that all-time-favorite?

It would be a good thing, right?

Now think about whether that all-time-favorite employee came to you with all the knowledge, skills and industry experience to be productive from the start. I’ve conducted this thought experiment with more than a 1,000 business owners.

The result: fewer than 1 in 25 say that their best employee came to them with industry experience.

Why do employers say they want candidates with industry experience?

I think the real reason is that it seems to make the hiring process easier. If the candidate already has done the things the manager needs done, it should be a no-brainer to hire the right person. But that is not always the case. Rather, employers often end up with bored, burned-out employees who have been doing the same thing in a different way inside a very different culture from yours.

I quickly learned that insights from outside my industry were often more helpful than those from inside.

Experience level is just one of several categories that employers should use to measure whether a candidate is right for your and your company. Other important categories include work behaviors, motivations, skills and aptitude, and culture fit.

Want additional insight? Read 7 Steps for an Effective Hiring Process now to learn more

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Where should you compromise in your hiring?

Of course if you can find a candidate who has all of the above, you’ve hit a home run. But should you have to compromise on any of those categories (and you almost always have to), I think “industry experience” is the one you should compromise first.

Often employers use “industry experience" as shorthand for things like:

  1. Product knowledge
  2. Contacts
  3. Technical ability

Let's break those 3 things down:

  1. Could a person who demonstrates product knowledge in an industry different than yours and demonstrates an ability to learn new information learn the products in your industry?
  2. If a person has demonstrated the ability to develop industry contacts in one industry, could this be translatable to your industry?
  3. Is it possible that technical skills from a different industry, would be useful in your business?

It takes a bit more work and bit more imagination, but if you focus on demonstrated skills, behaviors, and abilities, you can open up your pool of candidates to those outside your industry to good effect.

Chuck is a sought-after speaker on issues of talent acquisition, recruiting and hiring best practices with more than 20 years of experience under his belt. When not running his business, you’ll find him in Hyde Park playing ultimate frisbee with his friends & family.

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Written by The Alternative Board

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