What Is Employee Poaching? (Definition and Strategies To Prevent It)

The term “Employee Poaching” (also known as Job Poaching, Talent Poaching, or Employee Raiding) is used to describe practices that involve companies hiring current or former employees from a competitor or similar company.

If you have intelligent, talented individuals on your team, it’s likely that recruiters will contact them. How do you react when one of your team members is being courted by a rival? How can you tell if the person is considering the offer seriously or just bluffing? Should you counteroffer? What can you do to keep your team members from defecting?

What the Experts Say No leader desires to have a key employee hired by a competitor. One of the hardest—and most expensive—things to do in a time of tight labor markets is to replace the talent, according to John Sullivan, an HR expert and professor of management at San Francisco State University and the author of 1000 Ways to Recruit Top Talent. “And two, the talent is bringing ideas to a rival,” It’s not the How or the What but the Who: Succeed by Surrounding Yourself with the Best, by Claudio Fernández-Aráoz, senior adviser at international executive search firm Egon Zehnder and author of, “Managers are likely to be dealing with situations like these more and more, because of the globalization of business, demographic trends, and subpar leadership development practices within firms. It will be harder for managers to retain good employees as the competition for talent will grow, he predicts. There are steps you can take to prevent or lessen the loss if you suspect that one of your employees is about to be hired elsewhere or already has an offer in hand.

Consider non-compete agreements, but don’t rely on them Organizations have long used non-compete and non-solicitation agreements as standard tools to deter employee departures and poachers. Legal agreements, however necessary they may be in some circumstances, never suffice, according to Fernández-Aráoz. Besides, he notes, times are changing. Non-compete agreements are prohibited by law, and a growing body of research demonstrates that they have a negative impact on performance. Employees are not owned, so treating them as such and then purposefully limiting their capacity to earn a living in the future will damage your employer brand, claims Sullivan. Therefore, you shouldn’t rely on these contracts even if your company permits you to use them. Instead, concentrate on creating a company that employees won’t want to leave.

Watch for signs According to research, around the time of their work anniversaries, employees are more amenable to recruiters and, consequently, more likely to leave. (Annual reviews, which frequently fall on this timeframe, are typically a period of reflection.) ) Pay attention to those cycles, but also keep an eye out for other types of signals. Being passed over for a promotion or having a project delayed are examples of “trigger events,” which suddenly make other options more appealing. Another indication, according to Sullivan, is when “an employee suddenly starts asking to go to conferences so he can be more visible.” Pay attention to office gossip as well. “There’s a good chance they’ve already informed a coworker that they’re considering other offers.” ”.

Take action Sullivan advises being “proactive in trying to prevent it from happening” if you learn that one of your most valuable employees is considering quitting. “Have a frank conversation. Declare, “I’m not going to be angry; I want to fix it.” Find out if there are any easy ways to make the employee’s work life better. If the employee is looking for new challenges, look into options that you could provide internally, advises Fernández-Aráoz. “Ask: ‘What are the factors that are most frustrating you. Are there any that I can take away that would cause you to reconsider? Put the worker on a strategic task force, give her a new area to cover, or assist her in finding opportunities to serve on an outside board. It’s a win-win if you can find a substitute, he claims.

Refrain from accepting a counteroffer On the surface, offering your employee a counteroffer seems like a simple, obvious way to convince them to stay But, warns Sullivan, counteroffers are often counterproductive. “If someone has made the decision to quit, they’re unhappy. Giving a counteroffer entails paying to keep a dissatisfied employee. In addition, Fernández-Aráoz warns that raising one employee’s pay may cause issues for you with the rest of your team. “Compensation is confidential for about 11 seconds,” he says. “Everyone learns as soon as the person leaves the boss’s office grinning broadly. And if you think your worker might be lying about his offer to boost his pay, “let the person go,” he advises. “I detest the idea that I might have a liar on my team.” In today’s workplace, it’s all about trust. ”.

Batten down the hatches One immediate worry is whether a team member leaving for a rival will “bring other colleagues along with him,” according to Fernández-Aráoz. “You wonder: how many others are going to go too?” says Sullivan, and you’re not being overly suspicious. He asserts that if someone has been taken by a rival, that person will probably try to take others with him. “It’s pretty easy to identify who they are. ” (Hint: it’s often employee’s team members and friends. Sullivan says that after the departure, “you need to work on those people.” Learn what they require to stay, such as Fridays off or a challenging new assignment, and then try your best to meet those needs. Make sure they know how much you value their contributions. “Tell them: you make a difference here. ”.

Keep an eye on your best employees, advises Sullivan. “You need to continually treat desirable employees like they’re going to leave.” He suggests making a list of the individuals you absolutely cannot afford to lose, after which you should conduct a “stay interview” (a play on the HR information black hole known as the exit interview). Asking them “why do you stay here,” “if you ever get frustrated, what are the reasons,” and “what would keep you from leaving” will help you “reinforce the reasons” they are happy where they are and develop “personalized retention plans” to address the reasons they are not, he advises. Allowing the worker to work a flexible schedule, take on different projects, or spend more time working from home could be sufficient to keep them on staff. He advises that you do this for your top performers who hold important positions and are challenging to replace. The ideal situation is for your employees to remain with you because they have no intention of leaving. ”.

A star employee’s resignation can seem like the ultimate insult because managers frequently judge their own abilities based on their ability to inspire loyalty in their team members. But according to Fernández-Aráoz, “you mustn’t let one departure get to you.” “Don’t overreact. Also, avoid disparaging the departing individual because doing so will damage your credibility. ” Remember: “a certain degree of turnover is inevitable. ” Sullivan agrees. In some cases, “there’s nothing you can do,” he says. The worker simply needs to relocate or try his hand at a start-up. “You can’t keep everyone. However, you can continue to be friends with the poached individual. The best course of action is occasionally to let them go in the hopes that they will miss you and want to return in the future. ”.

Of course, that doesn’t make losing promising young talent any less difficult. Jillian, a rising star at one of Garrett’s premier properties, Eastern Standard, approached him with a request a number of years ago: she wished to be a general manager. Garrett remembers, “She was talented, had risen through the ranks, and had put herself through a rigorous wine training.” The issue was that at the time, I had nothing to offer her. ”.

And so, Jillian left for a competitor. Garrett says, “She had a chance to start a new restaurant.” Some colleagues at Eastern Standard were frustrated, recalls Garrett. People had made significant investments in her, so they felt hurt, he says. “But I didn’t feel that way. I imagined myself in her position, and I realized why she left. She desired a novel encounter and wished to broaden her horizons. I gave her a hug and encouraged her to succeed. ”.

However, he made sure to stay in touch with Jillian by calling, emailing, and going to her new restaurant. He explains that “she’d call and we’d talk about it when she had a challenge in her new job.” Jillian also agreed to serve as the general manager when Garrett opened a brand-new oyster restaurant in Boston’s Seaport in 2013. “She came back to us,” he says. And to our advantage, she had learned a lot and had become a more mature person. ”.

The COO of Dallas-based mobile app development company Copper Mobile, Jeff Francis, claims that poaching is “pretty common” in his industry. Case Study #2: Foster a positive work environment “Our people are our product, and because we have excellent employees, there is typically a good chance that the client will try to hire them,” ”.

A talented iOS developer was required by one of his local clients a few years ago, so Jeff assigned one of his best guys—let’s call him Sam—to the position. Jeff remembers, “Once the customer realized how good Sam was at his job, he came to us and said he wanted to hire him,” despite a clause in the agreement between the two businesses forbidding it.

When they were unable to come to an agreement whereby the client would pay Copper Mobile a “placement fee,” the client nonetheless hired Sam. Disappointed, Jeff reluctantly pursued legal action and won. He explains, “I was upfront about what was going to happen but I said I would never want to stop an employee from making the right move for his family or for his career.”

Is Employee Poaching Bad?

How employee poaching works

In industries where workers are required to possess specific technical skills, such as coding, development, programming, and analysis, employee poaching is a common occurrence. These skills are frequently in demand, so employers and recruiters get in touch with these workers to try and entice them to leave their current employer and work for a new one by offering better pay, more benefits, or a combination of the two.

For instance, a recruiter might get in touch with a software developer who works for a sizable computer systems design company and offer them incentives, such as higher pay, in exchange for leaving their current employer to join the new business. You can consider the software developer to have been poached from their current employer if they accept the job offer.

This is a well-known strategy for skilled workers to increase their pay, but it also gives them the chance to develop new skills, get closer to job promotions (which typically mean higher pay), and work for reputable companies they can highlight on their resume when they’re prepared to accept a position elsewhere.

As an employee who is poached for another position, you may experience these advantages. However, you should think about how frequently you allow poaching to happen or switch jobs because too much change may indicate to a new employer that you have trouble staying loyal to one employer or lack the career focus that company is seeking.

What is employee poaching?

An employer may engage in employee poaching, which is legal, when they get in touch with a worker for a rival business with the goal of persuading them to apply for a position there. Because the employee typically possesses the education, experience, or skills that may be difficult to find and are advantageous for the business, employee poaching is more prevalent with positions or within industries that are in high demand.

However, companies can engage in job poaching to attract top talent in any industry, not just those like technology.

If employee theft is successful, the company that did it gains the advantage of having a highly qualified worker on staff while stealing talent from a rival.

Strategies companies use to prevent poaching

Companies may want to take anti-poaching precautions in order to keep top talent. These strategies include:

Using a no-poaching agreement

Companies may enter into no-poaching agreements with their major industry rivals, which commits each business to refraining from attempting to hire employees from the other. Even if an employee applies for the position on their own, the agreement may also apply to hiring.

In either case, it prevented the company from losing its best and most skilled employees, but it also prevents the employees from pursuing other opportunities that may be better for them in terms of their financial or other well-being.

No-poaching agreements may appear to be beneficial for the participating companies, but if they are not properly drafted, they could cause the company to break anti-trust laws. Many businesses use non-compete agreements in place of no-poach agreements to avoid any potential problems.

Requiring a non-compete agreement

A non-compete clause (NCC) is another name for a non-compete agreement, which is a contract between an employer and an employee rather than between rival employers. According to the non-compete clause, after their employment with their current employer ends, the employee is prohibited from working for a competitor for a predetermined period of time.

The agreement might also stipulate that after leaving their job, an employee is prohibited from starting a rival company. Employers use non-compete clauses to stop employees from disclosing confidential information to rivals.

For instance, the non-compete agreement may specify that if the software developer leaves the computer systems design company for any reason, they cannot work for a rival or start a rival company for at least three months.

Typically, businesses only forbid employees from working for rival companies for a few months, tops. A longer period of time may not be fair to the employee because it may limit their options in the field in which they would typically look for work.

Measuring employee engagement

Organizations that regularly assess employee engagement can identify any pain points before they become severe enough for employees to leave or become vulnerable to employee snatchers. Employers might think about asking every employee to complete an engagement survey once or twice a year, or they might encourage managers to schedule regular meetings with their staff to talk about engagement.

An employer can get advice on how to engage staff members more by learning how they perceive the business and how connected they feel to their work environment.

Addressing employees needs

You should be able to address your employees’ needs once you have measured employee engagement. It’s especially crucial to pay attention to what top performers require from your business so you can keep these talented people from being lured away by competitors. Employees might seek perks like consistent working hours, a better wage and raise structure, chances for promotion, secure working conditions, recognition, and chances to advance their careers.

Forming an incentive plan

A company may use an incentive plan in place of, or in conjunction with, a non-compete agreement to keep employees at the company. An employee may benefit more from incentives and rewards under an incentive plan the longer they work for the company. In addition to providing an employee with a financial reward for their loyalty, an incentive plan encourages them to put in extra effort and maintain their focus because they know that their efforts help the company succeed.

Developing a company culture

The values an organization upholds inform its business operations, strategy, and interactions with its stakeholders, stakeholders, and customers. Employees can stay committed to the company if the company culture reflects the values they hold dear.

For instance, if a business values collaboration and creativity and a worker is exceptionally creative and craves working in a team setting, this might be the ideal job for them. Employee engagement, loyalty, and productivity can all increase with a positive company culture because these environments tend to make people happier.

Using a non-solicitation agreement

Similar to a non-compete agreement, a non-solicitation agreement aims to stop a former employee from contacting the clients and customers of their former employer. A non-solicitation agreement does not prevent employees from working for a rival firm. Employees who have invested time in developing relationships with clients may not want to leave a company even though they will have to break those relationships when they accept a position elsewhere.

For instance, a salesperson may have developed relationships with clients and come to rely on these clients to help them meet their sales goals by upselling products or keeping up with their regular order fulfillment. If an employee has signed a non-solicitation agreement, they might not want to leave because they would have to start their client list over with another business. As a result, employee poaching may be prevented because employees prefer to be able to maintain their clientele.

FAQ

Is employee poaching unethical?

What to Do If Your Employees Keep Getting Poached
  1. Make sure your compensation is fair. First and foremost, you need to address compensation.
  2. Acknowledge your flaws and highlight your strengths. Employees develop a comparative mindset when they think about leaving your company for another one.
  3. Create a career plan. …
  4. Ramp up training.

Why is poaching employees illegal?

Typically, stealing employees from businesses with which you have a business relationship is considered unethical. This includes clients, vendors and partners. People in an organization with whom you have a business relationship frequently introduce you to others there who you might not have otherwise met.

What is considered poaching?

Employee poaching, by nature, can directly violate a non-solicit provision. Employee snatching may also be illegal if it involves the theft of trade secrets, the misappropriation of private information, unfair competition, or a breach of fiduciary duty.

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