“Poaching” Isn’t Just For Salmon Anymore (Part 1 of a series – Arguments against poaching)

“Poaching” is the term recruiters use for directly recruiting (raiding) the employees of another firm. Poaching is considered unethical by some but any graduate of the “Gordon Gecko” school of business could easily fail to find any ethical issues in poaching employees. Especially, because, with only 4% of the population actively looking for work, the only way to get any volume of talent is to take it directly from other firms. ARGUMENTS AGAINST “POACHING” EMPLOYEES FROM OTHER FIRMS Not in my neighborhood – Some managers say it’s OK to steal employees, just not from our direct competitors or from other firms in our geographic region. Both approaches are foolish. Failing to hire from the competitors from within your industry deprives you of the valuable competitive intelligence that you can gain by interrogating the new hires on their first day. We get better, they get worse – Failing to poach means that our new hires will be unfamiliar with our industry and our problems. It also means that it is a zero sum game. When we gain a great hire from a competitor the other firm will simultaneously lose a great employee. Retaliation – Still others worry that if they “poach” employees, others will retaliate and do the same thing to them. In reality, in the war for talent everyone is fair game and being “polite” is often only seen as a sign of weakness. And being seen as weak almost assures that others will poach from you. Being a strong poacher might actually discourage others from taking your employees and if they do take them, strong poaching helps to make the win loss ratio closer to neutral. Partners – In reality, even strategic business partners poach from each other. I know one high tech firm that hires 15% of its employees from a strategic partner, even though they have a clear “no-hire” agreement. Their retort to this apparent violation is that we “don’t actively seek them out” but if they call us… it’s a different game! Some strategic partners complain vigorously when their talent is poached. For example the new CEO of a large computer firm called up to CEO of its strategic partner and asked them directly not “to steal” their employees. The CEO of the poaching firm politely agreed but a more accurate answer would have been “treat your employees better and they will stay, no matter what we offer.” Customers – Poaching employees from wholesale customers and suppliers can be a risky business if you do enough poaching so that they notice. Recruiters and managers need to remain vigilant to ensure that great recruiting doesn’t cost us a great customer. It’s hard work – Poaching, although necessary if you are to remain competitive, requires sophisticated skills and tools. Poaching is analogous to convincing a happily married person to leave their current spouse for another one across tandem. While single people might readily except almost any offer poaching happy employee individual requires a sophisticated approach if you expect them to even listen your offer. And then of course, the offer must be clearly superior to their current situation in order to entice them take a risk and leave their current employment relationship. Legal arguments – although poaching is not illegal there are certain cases that can get you in legal jeopardy. For example if you were to attempt to hire an intact team you might face a legal challenge on the premise that you are purposely attempting to harm the other firm by interfering with its employment relations, stealing its trade secrets, or unfairly competing. The second area of concern is when you hire an employee with a high level of technical skills that could be used directly by the competitor to gain an unfair advantage. Although these cases are relatively rare, they are increasing in number. Another issue can arise when you poach an employee that has signed a non-compete agreement. It is always pays to ask new hires if they have recently signed any of these agreements. Although many non-compete agreements are unenforceable it is always wise to be cautious and to check with legal counsel. Next week Poaching tools