The optics and ethics of poaching employees can be debatable. The frustration felt if you are on the receiving end of having your top talent poached though, certainly is not. And it always stings a bit more when you lose great employees to a competitor.
Organizations spend a great deal of time and financial resources to onboard and develop their employees, and for good reason. From a business perspective, highly skilled and engaged employees are critical to the success of organizations. When viewed from a financial perspective, total labor costs (wages, benefits, taxes, and related expenses) can account for as much as seventy percent of total business costs. Great organizations invest in their employees. When competitors — either directly or via a recruiter — are poaching employees from your ranks it negatively impacts your business.
To make the challenge for organizations even more critical is the increasing risk of employees participating in what has been labeled as “The Great Exodus” or “Great Resignation”. In one study of 2,000 employed respondents across the United States and Canada, sixty-nine percent of employees already have plans to leave their current companies. Worse yet, the majority of this group are actively working toward a change.
With so much invested into sourcing, recruiting, hiring, onboarding, and developing your employees, it is vital to understand when your employees are at risk and more importantly, how you can prevent recruiters from poaching them.
What is Employee Poaching?
According to Indeed.com, employee poaching is a legal practice that involves an employer contacting an employee at a competing company to convince the employee to apply for a job at their organization. Exact definitions can vary a bit depending on your source but there are a few points to draw your attention to.
Poaching employees is legal, sort of. Yes, it is frustrating and means you now have to replace that talent, but there is nothing illegal about the practice in general. However, and this is important to note, this does not mean that employee poaching is completely free from all legal actions since it could violate certain business laws such as non-compete agreements.
Employee poaching is done with intent. Your competitors are smart. (Do you care or even pay attention to businesses that aren’t?) They know who your top employees are, and in highly competitive industries will seek to gain an advantage by stealing your best talent away.
Your competitors aren’t the only ones involved. Look at the last part of the definition. A competitor needs to convince your employee to make the move to their organization. This means you can influence them to stay, even if you aren’t involved in their conversations.
Are Your Employees At Risk for Job Poaching?
We’ve already hinted at this a bit, but let’s take a closer look if you (and your employees) are at risk for job poaching. Ask yourself or even some key employees the following questions.
How positive is your company culture?
Maybe we should start with a simpler question, do your employees look forward to coming to work every day? Company culture has become increasingly important to employees and for many can be more persuasive in staying or leaving an organization than income.
Not only does a positive culture improve your bottom line due to increased productivity, but employee retention rates as well. Employees stay where they find value and fulfillment, however, when the personality of an organization turns negative, recruiters focused on poaching employees now have very attractive opportunities with available alternatives to offer.
Is employee morale high or low?
While company culture is about the personality of your organization as a whole, employee morale is about the personal sentiment of your employees toward you as an employer. Take stock of how your top-performing and most talented employees feel about partnering with you.
Low employee morale hurts your brand image and customer loyalty and increases employee turnover. Conversely, high employee morale improves retention rates, company loyalty, and employee engagement, while reducing the risk of employee poaching.
Are you living up to your employee value proposition?
Think back to why your most skilled employees left their former positions to join your company. Employee Value Propositions (EVPs) are the key drivers of talent acquisition, and often define the benefits and intrinsic values employees stand to gain with your organization. Your employees expect you to live up to those promises. Likewise, these values are also what keep your employees with you versus anyone else, specifically instead of your competition.
How easy is it for recruiters to reach your employees?
Many organizations provide the business contact information of their employees on their website, especially if your organization is heavily sales-focused. (We have this on our website.) There are plenty of valid reasons to have this information readily available: easy accessibility for current and potential customers is primary. LinkedIn also makes it easy to learn who is part of your organization.
The downside to this transparent and easy connectivity is that both your competition and recruiters also have easy access to poach your employees. We are not saying you need to stop this practice — we certainly don’t intend to since the value far outweighs the risk. However, you do need to be aware of this in relation to how you treat one of your most valuable assets.
Why are people leaving your organization?
Some level of turnover is natural for every organization. You should be regularly conducting exit interviews to understand why an employee is leaving you. If issues like job satisfaction, lack of opportunities and career growth, or income potential are repeatedly being mentioned, other employees may be at risk of job poaching. Take note of negative reasons for employees leaving and address them quickly.
What is the perception of your employment reputation?
Here’s a little secret (that really shouldn’t be a secret), recruiters love to engage in poaching employees from organizations with a poor reputation among their employees. While these organizations may have great products and services, poor company culture soon becomes transparent thanks to social media and public company reviews on job boards. Companies that treat their employees poorly won’t have them for very long, especially if their employees are talented with in-demand skill sets.
Strategies to Prevent Recruiters From Poaching Employees at Your Organization
It may strike you as a bit odd that an executive recruiting firm would be telling you how to protect your employees from an industry like ours. Why would we do this? The answer is simple.
One of our values is to act as partners to our clients. In part, this means we see ourselves as true partners aligning our actions with our clients’ interests. Even more, we work hard to seek solutions that will build success toward our partners’ immediate and long-term talent strategy goals. When we are putting that level of effort into helping our clients with their goals and employment needs, we also want to ensure they retain that talent. If you aren’t a client of ours (yet), consider this a sneak peek into how we work.
So here are some strategies to recruiter-proof your organization.
Develop a proactive plan to retain your employees
Start by looking at the initial questions asked about your risk for employee poaching. Shore up areas that may be vulnerable and initiate decisive improvements for areas that may have become flashing neon signs to recruiters. Building and maintaining a positive company culture should be your baseline since it’s your organizational personality that every employee interacts with daily.
Offer competitive compensation packages. Income shouldn’t be the primary factor that poaches talent away from you.
Respect and maintain a healthy work-life balance. Set realistic working hours and respect the personal time of your employees. Help them establish positive boundaries between their personal and professional lives while being a positive example as well.
Define a remote work policy that benefits both your organization and your employees.
Support the career goals of your employees. There are many varied paths to success, help your team envision and establish what that looks like for them through mentoring and career development opportunities.
Know the answers before the question is asked
Poaching employees starts with the offer of an opportunity that is clearly superior to what they are doing currently. Organizations that can successfully recruiter-proof their employees know what that superior opportunity might look like for their employees, and that they are the ones offering it. Honestly, there will be times you can’t be the one that has the better offer, but then you should also know why you can’t.
This means you need to know what motivates and incentivizes your employees. Beyond consistent conversations with your employees for individual input, pulse surveys are a great tool for soliciting broader anonymous feedback.
A final note on this point, you should know what motivates your employees before a recruiter attempts to poach them. Attempting to sway employees back with a counteroffer rarely works out well for either side.
Prepare for the inevitable
Are you ready for this? Like it or not, recruiters have already and will only continue poaching employees from your organization; or at least attempt to. You can’t shut your employees off from the rest of the world or monitor their every communique. That said, there are some things you can do to make it harder for the recruiter and more transparent for you.
Use non-compete agreements. First, work with your legal team to make sure these stay within federal, state, and local guidelines. The level of restrictions and limitations you can require will vary. However, using these contracts will not only protect you from competitors gaining an immediate advantage but also slow employees considering an exit to their organizations.
Go on the offense. If you have worked diligently at creating a positive company culture and have an open, transparent relationship with your team, conversations with recruiters shouldn’t be some dark secret. Take advantage of the feedback shared to learn more about the inner operations of your competitor if and where you can. Those conversations you don’t know about may be opportunities to reinforce how great your company and culture really are.
You cannot control, limit, or police every conversation your employees have, and if you could or even wanted to, that level of micromanagement will most assuredly invite recruiters to contact your skilled talent. Losing a great employee, whether to a competitor or simply another career opportunity is never pleasant, but not every aspect of business is either.
Focus on what you can control and where you can make a difference. Make your company culture a desirable place for talented individuals to create and develop their careers. Support your employees personally and professionally, and deliver on the value propositions promised when they first started. Learn from employees when they do leave and continue to improve. Taking this approach, you may be the one poaching employees from your competitors instead of them from you.