In a labor market that continues to be challenging for employers, recruiters are willing to try almost anything to reach new candidates and meet their companies’ staffing needs. One controversial tactic is employee poaching.
Are you considering poaching talent from a competitor? Maybe you are wondering if it’ll get you in trouble, legal or otherwise? Read on as we explore the ins and outs of employee poaching.
What is Employee Poaching?
Employee poaching is the term for hiring talent away from a competitor. By some estimates, it accounts for as much as 30% of movement in the labor market.
Poaching activity is closely tied to the economy; when unemployment is low, like it is now and has been for some time, poaching is more common as recruiters feel an increasing sense of urgency to fill open positions.
Some industries are more susceptible to poaching than others. In the tech field, for example, it’s not uncommon for a skilled IT employee to be lured away from a company by one of its market rivals who’s willing to pay a premium for their talent. Food and beverage and customer service workers are also more likely to be poached.
Is Employee Poaching Legal?
First things first: let’s tackle the question that could put your company’s livelihood at risk. Is it legal to poach employees from your competitors? While this is not legal advice, and you should consult an attorney for guidance in your specific situation, the answer in most cases in the United States is that poaching is legal.
The justice system has taken steps to outlaw arrangements that stop poaching. For example, companies typically break U.S. antitrust laws if they enter into “no-poach” agreements with competitors. Under such an agreement, two or more companies would commit not to solicit or hire the other companies’ employees. This violates antitrust laws designed to ensure healthy competition in the marketplace.
There are a few cases where the legality of poaching becomes murky, namely non-compete agreements. A non-compete agreement is a contract between a company and an employee that prohibits the employee from working for one of the company’s rivals for a specified time. These non-compete agreements are often unenforceable, but it could take months and legal fees to sort out in court. The risk of legal action alone might make pursuing a candidate with a non-compete agreement impractical.
Another scenario that could get you into legal trouble is if you’re poaching an employee who’s under contract with their firm. This could result in the company suing the employee or the firm that lured them away for breach of contract. It’s another scenario where the potential upside probably isn’t worth the liability.
Is Employee Poaching Ethical?
Now for a more nuanced question: is employee poaching ethical? The answer to this question isn’t clear cut and, in most cases, will be, ‘It depends.’
Employee poaching that’s conducted above board to fill a legitimate skills need generally does not violate any professional ethics. In the United States (and in most developed nations), employees are free to choose their place of employment. They can base that decision on any factors they deem to be important, from pay to flexibility to enjoyment. Thus, if an employee decides a competitor’s employment offer is more alluring than their current job, it’s well within professional convention for them to accept the better offer.
Of course, there are cases where poaching is unethical. This is true when poaching is done with unscrupulous intent. For example, it would be highly unethical if a company wanted to hire someone from the competition to gain access to trade secrets or uncover sensitive information about other firm employees.
A good way to “gut check” whether poaching is ethical is to assess whether you feel the need to hide it beyond the discretion that generally exists in the hiring process. If company leaders, customers, or the general public would find the intent behind your poaching problematic, it’s a good sign that what you’re doing raises ethical concerns.
Pros and Cons of Employee Poaching
The pros
On the positive side, poaching employees can help:
Access specialized skills
If you need to hire for a niche set of duties, there’s no faster way to do it than to look for someone who’s already performing those duties for another firm. Poaching enables you to hire a professional who has direct experience with the precise job function you’re looking to fill, which can all but guarantee a high level of performance.
Minimize time to productivity
Someone who’s already worked for one of your competitors will have a good idea of “how the sausage gets made.” This means you won’t need to spend as much time on training, and your new hire can reach full productivity faster than someone who’s being introduced to the field or the role for the first time.
Entice additional prospects
If you poach a competitor’s employee and word gets around how much they love their new job, some of their former coworkers may be compelled to follow them to your organization. This increases your talent pool and contributes positively to your employer brand.
Put workers at an advantage
One viewpoint is that the real winners in employee poaching scenarios are employees. Poaching typically involves offering higher salaries, better benefits, or some other captivating perk better than the employee currently has. Additionally, the threat of poaching forces employers to be on top of their game to retain top talent in terms of pay and value, which can lift the tide for all workers.
Encourage innovation
Some of the most talented business leaders have honed their skills by making moves among a laundry list of top companies. This wouldn’t be possible without some poaching. Poaching encourages knowledge transfer within industries and pushes firms to compete to be “the best,” which drives innovation.
The cons
In addition to the possible legal downsides we already covered, here are some of the other cons of poaching to consider.
It could backfire
Getting a poaching candidate to the offer stage doesn’t necessarily mean they’ll accept. There’s always the chance an employee has no intention of actually leaving their job but instead wants to use a competing offer for leverage in their quest for a raise or promotion. If this happens, your efforts (and the risk you’ve taken to engage in poaching) will have been wasted.
Damage to reputation, relationships
There are benefits to maintaining positive relations with the other companies in your field, even those you consider to be competitors. Becoming known as a habitual poacher could damage your reputation and put those relationships at risk.
Tips for Employee Poaching
1. Recruit for skills, not secrets
You can ensure your poaching activities remain in good faith by focusing your efforts on skills rather than secrets–trade secrets, sensitive business information, or intellectual property, to be precise. For example, if you’re poaching a talented developer, you can expect them to bring their A-game to code your new app but should NOT expect them to share previously written code already used by their current employer.
Related: How to Conduct a Skill Gap Analysis
2. Keep it positive
Talking badly about others is never a good look, which extends to recruiting. Take the ethical high ground by centering your recruiting message around the value your company can offer candidates rather than pointing out your competitor’s shortcomings.
3. Don’t be aggressive
Knowing when to back off is one of the most important things in poaching. If a candidate has not responded to your initial outreach or follow-up message, it’s a good sign they’re not interested. Likewise, if they express discomfort with being contacted, it’s time to make a graceful exit from the conversation.
A Final Word On Poaching
The bottom line is that you can only poach an employee who wants to be poached. Unlike the term suggests, the candidate is not some helpless creature at the mercy of a relentless hunter. Instead, they’re a competent professional capable of assessing all opportunities available to them and making the best decision for their career. Treat them as such, communicating your interest in their skills and the unique value you can offer as an employer, and you’ll experience success with or without poaching.
