Employee Poaching as a Hiring Strategy: Good or Bad?

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Employee Poaching

Across industries, every organization wants to recruit the best talent for the long term. On average, it takes around 36 days for a company to hire the right talent (Source: SHRM Report). If your recruiting team spends all those hours searching and interviewing the best talent, you would definitely feel bad after finding out that your competitors are also luring the same candidate. It hits even harder when you start to rely on some employees who are then snatched away by your competitors. In recruitment terminology, this is known as employee poaching.

While many companies fear being labeled as disrespectful businesses by others in the same industry, others poach employees quite openly and frequently. It is no less than a shock to receive a resignation from the top talent in your company unexpectedly when everything seemed okay. Although job poaching may seem to have a negative connotation, it should not in many cases. 

Whether you believe it or not, employee poaching is just an unpleasant part of reality. With the top companies vying for the best and brightest professionals, businesses are highly vulnerable to this hiring approach. In this blog post, we will look at its various sides to help you understand if you should do it too.

What is Employee Poaching?

Employee poaching can be defined as a way to hire or steal employees (either current or former) from competitors. It is common in growing industries in which businesses require individuals with specialized skills to get an edge against the competition. The disappointment felt by the top management when star employees leave to join the other side of the business battleground is akin to feeling jilted. 

The impact of job poaching can range from mild to severe, depending on the backup plan that your organization has to deal with the loss of talented employees. For example, if a company loses its key technician who is the only person with an overall understanding of its network, it would take months for the work to get back to normal. 

While big organizations continue to participate in this war of talent, it may not be feasible or economically viable for small businesses to bid high over an employee. This is where employee engagement can help cement your relationship with the most valuable individuals working for you.

Why Do Companies Poach Employees?

Poaching is when your competitor hires your employee without necessarily going through the defined hiring process. This can happen by offering more money to the employee than their current compensation package to push them to leave their current job position. 

A supporting data point states that 73% of candidates are passive job seekers, which means that they are open to hearing about new opportunities whether or not they will take the plunge to apply for the offered job position. It is the fear of a company’s employee being poached by other companies that drives the process and makes it prevalent all the time.

Another bright side of employee poaching is that it keeps the labor market healthy and also ensures that employers treat/pay their employees well. In the context of recruitment, employees are free to switch between jobs whenever they want (unless bound by a recruitment agreement). As an employer, you also need to keep in mind that your company does not own the employees working for you. Furthermore, talented individuals do not need any permission from their employers to find or accept a better job offer. 

Is Employee Poaching Illegal?

To better understand this aspect, let’s examine the policies that exist to discourage job poaching.

If you have been running a business for a considerable time, you might have heard of terms like a hands-off policy or off-limits policy. Since the term “employee poaching” has grown in popularity, these terms are not as widely used but they are related. An attempt to suppress the recruitment and movement of your high-profile employees can be pursued by agreeing not to solicit employees from your competitor.

At the recruiting policy level, most countries do not have laws related to employee poaching that would prevent any employer from approaching individuals who were or are employed by their competitors. The lack of legislation in this aspect is easy to understand – Human resources are not inanimate objects or animals that can be poached. Every employee has a right to leave their current employer to gain better compensation and work opportunities from another employer.

In short, the risk of employee poaching, which is indeed a significant threat to businesses, can be curbed but is not completely preventable. While there is a risk of losing your trade secrets or confidential business information as your employees reach the competitor’s team, you can avoid it by including non-compete agreements in employment contracts.

This takes us to the next important aspect related to job poaching which is –

What Can You Do To Prevent Employee Poaching?

Attracting and retaining employees to work for your company can be a multifaceted challenge. However, you can do the following things so that your top talent is less likely to leave for your competitors:

1. Provide responsibility

One of the prominent reasons behind employees switching jobs during the Great Resignation is that they do not feel valued by their employers. A solution to prevent this from happening is to give your top performers the permission to solve problems creatively and share in tackling the organization’s challenges. When they do what’s best in their capacity, acknowledge their contribution and give them the respect they deserve. 

The more they feel valued while working for your company, the less likely they will think of approaching your competitors or accepting the offers received.

2. Present a clear career path

While engaging employees at your workplace, it is important for you to realize that the top talent is always on the lookout for new responsibilities to learn and grow. If you can assure them that they are not working in dead-end jobs, they won’t be as eager to jump ship to the next competitor. 

In simple words, if you want your current employees to continue working for you, give them a clear picture of the career growth they can expect.

3. Pay for performance

On top of the other benefits you offer your employees, don’t neglect the role of competitive compensation in encouraging employee retention. If the employees start to feel that they are underpaid for the job they do, they are most likely to benefit from employee poaching, leaving you with open job positions. But on the positive side, paying people right emphasizes the importance of other employment benefits even more. 

This also sends a message that they do not need to join your competitors to get what they think they deserve. 

4. Ensure work-life balance

Irrespective of the size of your business, you can differentiate your work culture by ensuring a balanced life for your employees. Keep in mind that a balanced work environment can lead to higher employee productivity. This can be done by offering the top performers some time off from work based on their regular work schedule and contribution to business growth. 

Should you poach employees from competitors?

Job positions at different levels across organizations call for a certain specific talent, knowledge, and experience. This is particularly true in the case of highly specialized industries and sectors such as oil & gas, pharma, and others. On one hand, employees are looking for better opportunities. On the other hand, recruiters and head-hunters work round the clock with the task of filling different roles with skilled candidates. These resource criteria are met with professionals working in a similar capacity in a competing firm. 

In such a highly competitive recruiting environment, supply-demand forces are at play, making the task of approaching talent in competing organizations an inevitable norm. Since employee poaching is not illegal, it makes sense to adopt this approach as a drastic measure to maintain a pipeline of talented employees.

However, you should also know that there is a thin line that differentiates unethical employee poaching from competitive hiring. Hence, the head hunters on your team need to be aware of and embrace ethical job poaching practices. The main difference lies in the process and intent at the time of hiring new talent. Your focus should be on finding the right talent fit instead of intentionally targeting a specific competitor as a talent source.

More About No-Poaching Agreements Vs. Non-Compete Agreements

A no-poaching agreement is held between two companies wherein they agree to an ethical arrangement of not poaching employees from each other. On the other hand, a non-compete agreement legally prevents an employee from taking a job at a competitor for a specific period of time, though the stipulations may differ from one role to another. At its core, this agreement is meant to restrict employees from joining your competition. 

Conclusion 

Accepting employee poaching as a reality is much better than fighting against it. To retain the best talent in your organization, take the proactive route to create a job environment where your employees are happy and feel valued. 

Hire ConnectTel to Simplify Your Recruitment Process

Clearly, there is no end to the debate over the good and bad sides of employee poaching. However, you can move past it by simply hiring ConnectTel – a leading staffing agency in Austin, to do the hard work for your organization. To know more about ConnectTel, click here

How can Connecttel Help?

ConnectTel is in the business of finding the right talent for companies. ConnectTel takes the overbearing burden of finding human resources with the right skill set and lets companies focus on their core business. We specialise in IT jobs, helping businesses build and ramp up their technical staffing. We help build entire teams with the right set of skills in the technology that best suits their business.

We at ConnectTel will also help you as a candidate to acquire most sought after technical skills and forward your candidature to leading enterprises with global reach.

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