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Is sector experience important for your next financial hire?

Relevant sector experience has long been a prerequisite for businesses when hiring new staff. The perceived wisdom is that the only people who are capable of performing well in a particular role are those who have done it before. 
For some, numbers are numbers, so no matter whether you are in the retail sector or the consultancy sector the fundamentals of financial roles are the same. However for many others there is an apparent risk in taking on new hire who has not worked within the sector before. For them there are unique skills and understandings obtained when working within specific sectors which are pivotal to ensuring that a financial hire will be successful. So why do we still place so much value in sector experience and are we missing out on better candidates by turning a blind eye to hiring from outside our comfort zone?

What are the benefits of relevant sector experience for a financial role?

It is a fair assertion that a candidate’s sector knowledge would enhance their ability to successfully transition into a new role. They know their strengths, understand the relevance of a finance operation in the industry, would require little training and should be able to hit the ground running. 
I frequently hire for well known retail brands, all of whom have an historic trend of hiring finance candidates with previous retail experience. Most acknowledge that sector experience is a prerequisite when shortlisting candidate CVs; those without are unlikely to be considered. These clients are usually flooded with applications from candidates who have this experience so they don’t feel the need to widen the search.
When I have asked why retail finance experience is so desirable the response typically follows that the individual would understand sector terminology, require less training and add immediate value to their business. The priority appears to be someone who can step in and take on the role with immediate effect; the ‘short term win.’
But is focusing on this immediate and easy transition necessary? Are we discarding candidates who have real potential to transform a business or finance operation simply because they don’t have the relevant sector experience? It could very well be that looking for those ‘short term wins’ stops us benefitting from real long term improvements.

Short-term win Vs long-term gain

There is an argument to be had that someone without specific sector experience will come into a new role with an appetite to impress, a strong work ethic and the diligence to acquire the new skills and understanding necessary to excel. Someone who has worked in the sector before may be less motivated to put in that extra effort. 
Perhaps more important than the initial efforts a new hire will put in is their potential to have a long term impact on your business. For a finance role it could be extremely beneficial to hire an ‘outsider’ as they could be the person who is capable of bringing new and innovative ideas to move your business forward. If you are a finance team working in the retail sector there could be lots to learn from someone who has wide experience in the world of consulting.
Recently I had coffee with the finance director of a legal firm with whom I have worked for a number of years. She has a wealth of experience across the public sector, media and now legal. When I first worked on a role with her she almost laughed when I asked if she was concerned about sector experience. In her view the joy of a new role for any individual is the chance to work in a new sector and that by moving around candidates become more well rounded and develop their skills. What’s more, bringing in new people with diverse skill sets and experience will benefit your existing team and improve your entire operation. 
As long as the new employee has the right attitude and the appropriate level of working finance experience it really does not matter where they had been working and in fact may be a benefit if they are coming from a different sector. 
There is always going to be a split opinion on this topic – on the one hand hiring a candidate who knows your sector could save time and money in the short term, but taking a risk and hiring an ‘outsider’ could well be a better long-term solution for a financial operation.
In my view we should refrain from disregarding individuals based upon their relevant sector experience. Being open minded is crucial in this economic climate to drive business forward.
For a discussion about hiring in the financial sector and what a candidate from outside your sector could offer, contact Lottie Barnfield, Manager at Page Personnel Finance. You can also follow us on LinkedIn for news, updates and advice from the financial sector
Lottie Barnfield
T: 0207 2692196