Hiring elite professionals into a team seems like a no-brainer for an organisation trying to improve performance, but a new study examining law firms in the UK has shown that hiring star professionals can often undermine performance and upset the delicately balanced dynamics of the teams they join.
Knowledge-intensive organisations—such as law firms, accounting and audit firms, and management consultancies—rely heavily on the knowledge, expertise, and social networks of their professional workforce for competitive advantage. This creates a strong incentive for them to recruit the “best and the brightest” in their respective industries.
But while many organisations engage in this “war for talent”, previous research has shown that firms face challenges in reaping the expected benefits from hiring talented workers. The addition of a new member to a team can disrupt finely balanced team dynamics and lead to factionalisation and counter-productive competitiveness, and certain negative qualities of new hires may be overlooked or missed during the hiring process which then cause issues down the line.
The results of this new study, which looked at UK corporate law firms between 2000 and 2017, show that recruiting an elite professional into a team was associated with buyers rating the quality of service lower relative to teams who did not make an elite hire. This negative effect was weaker when the average quality of incumbent team members was higher, yet stronger when the organisation held a higher number of other high-quality teams.
Daniel Muzio of the University of York School for Business and Society, one of the authors of the study, explains the results: “On the one hand, our results indicate that the average quality of incumbent team members weakens the negative impact of hiring an elite professional. It is possible that the perceived legitimacy and resilience of the established team limit the negative behavioral reactions from elite incumbents and enhance the effectiveness of elite additions to the group.”
“On the other hand, the number of other high-quality teams in the organisation strengthens the negative impact of hiring an elite professional, possibly by upsetting the established inter-team balance of power and triggering competitive dynamics and uncooperative types of behaviors within the organisation.”
The findings also highlight how important it is for organisations to create environments that help to socialise and integrate new high-caliber talents, who can be particularly disruptive due to their greater industry visibility, higher external reputation, and ability to control scarce resources. Quickly creating a common culture and shared identity within the team makes it less likely that team incumbents will engage in defensive moves to nullify any perceived threat of encroachment by the new colleague and, more generally, helps to promote the integration of the newcomer into his or her new surroundings.
Socialisation and integration also helps to ensure new additions assimilate and adhere to the existing collegial egalitarian norms of the organisation, with positive impacts on inter-team relationships and the team’s ability to offer high-quality services to buyers. “Overall, the socialisation and integration of an incoming elite professional, either at the team or organisational level, appears to be paramount for achieving positive team outcomes,” says Muzio.
"Of course, one important, practical, question that arises from these findings is why firms continue to hire elite professionals if there are apparent negative effects from doing so," he continues. "And some of the answers that emerge from this new study provide a fascinating insight into the modern law firm.
"For example, we found that many firms feel that they are undersized for the market opportunities that exist and there is pressure on them to be bigger to survive.
"Meanwhile, we also found that some firms tend to panic that they might not be able to attract or retain big clients for the big deals if they don't have the big name on their books and this can, it seems, lead to firms feeling they need to hire the big names rather than promoting internally."
Please contact Harry O'Neill at Insight Media at harry@insightm.co.uk to arrange interviews or for any further information.
