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Embrace Employee Poaching

Poaching is defined as when a company hires an employee from a competing company. Some choose to go farther and say when an employee is actively pursued and hired by any other company. However we choose to define it, having our talent poached is always a scary idea. We have one more position to attract and fill. And it always seems to be our best employees who get targeted. But what can we do about it?

There’s two main approaches: Work to keep the talent we want and Work to prevent others from taking the talent we want.

How do we prevent others from taking our talent?

One idea is to talk with our competitors and agree to not poach from each other. It’s mutually beneficial to both companies. Like the old adage “keep your friends close, and your enemies closer”. Also, it does feel somewhat wrong to call other peoples employees and try to “steal” them. Has this been done before? Well, we have an example from the CEOs at Apple and Google!

“I would be very pleased if your recruiting department would stop doing this,” Jobs(Apple) wrote to Schmidt (Google) on March 7, 2007.

The good news, is that it did work! The bad news, it turns out to be illegal.

Apple, Google, others settle anti-poaching lawsuit for $415 million – CNET

Last month, Apple, Google, Intel, and Adobe settled an Anti-Poaching Lawsuit. Federal Judge Lucy Koh approved a $415 million settlement related to agreements not to poach each other’s employees. But why would it be illegal? What were the grounds of that law suit? Although, asking other companies to not poach our talent sounds like a good idea, it hurts the industry by limiting individuals ability to rise in the industry and stifles salaries. By getting together with competitors or other companies, we take away some opportunities for people to advance their careers. Even though these tech-companies had the best intent when agreeing not to poach, by removing competition they artificially lowered the wages for that industry, and (according to Judge Koh) harmed thousands of employees with the policies.

Is there a legal way to prevent others from taking our talent?

Short answer: Yes! There is a loop-hole! The above settlement came after a Department Of Justice Investigation on broad agreements between Adobe, Apple, Google, Intel, Intuit, and Pixar–that prohibited them from soliciting one another’s employees.

DOJ settles no-recruit claims against tech companies – CNET

This was an anti-trust investigation focused specifically on cold-calling competitors employees. It also ended in a settlement. However, the Department of Justice found the problem wasn’t agreeing to not solicit each others employees, but instead that the agreement was too broad. That is, the DOJ felt that the agreements could not cover all employees–but just those in overlapping business lines. Saying that the agreements “eliminated a significant form of competition to attract highly skilled employees.”

What does all this boil down to? If we want to legally discourage other companies from poaching our talent, we can agree to not cold-call each others people when those people are definitely in an overlapping business line. Now, if you ask me, I would say the best approach is to not even try to walk this fine legal line. I would go further than that to say, this is an ethical line that we shouldn’t go anywhere near! It may feel like it’s wrong to cold-call another companies employee and try to poach that person, but it’s even more unethical to conspire to stifle salaries and careers. (even indirectly)

Good news though, there’s another way!

How do we keep the talent we want?

So, preventing poaching is wrought with ethical and legal land-mines. How to we keep talent in a world of other opportunities? To answer that, let me walk through an example.

A new startup called Sclera has a need for Software Engineer. Their 5 employees pull out all the business cards they’ve collected at conferences, scroll through their phones and LinkedIn accounts and start calling people. Sue, who works for us, is a perfect match and excited about what they’re working on, goes in for an interview and lands an offer! Good for Sclera, good for Sue, bad for us. It’s not that Sue wanted to leave this job, she was just also excited about that new opportunity also, and all other things equal, they offered more. What do we do? Well we match that offer of course, and Sue chooses to stay with us! Happy ending.

That’s our solution! If in the end Sue is worth more to us than we were paying her, she’s vulnerable to poaching. If we actively assess the talent which we don’t want poached and compensate them appropriately, we’ll be shielded from poaching, and don’t have to walk a questionably legal or ethical line.

tl;dr:

Don’t try to prevent poaching attempts, but embrace the value of our employees.


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So, what do you think ?