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Poaching and Non-Competes: How to Fight Clean

In Sourcing — by Trakstar

As a lean-thinking recruiter, you want to run a tight ship. That means making great hires that will stay with the company and prove a valuable asset to your business. And while your employer is keeping those hires happy, there’s always the chance that someone will try to poach an engaged and happy employee away. What can you do to stop them from leaving and avoid paying the high cost of replacing them?

Depending on your industry, you could be fighting an uphill battle. In tech, for example, 65% of employees believe they could land a better job . Whether they’re confident in their skills or think the job market is great for them, some employees are always looking for a better offer, and it could prove difficult getting them to stay, but others are perfectly happy at their job but are susceptible to aggressive poaching. How do you defend yourself against this, and how do you fight back?

On The Defensive: Non-Competes

The most common counter to aggressive poaching is the non-compete clause, which prevents an employee who leaves your company from working at a competitor for a certain amount of time. This ostensibly prevents other companies from stealing “trade” secrets by hiring those who know your company’s inner workings. Non-competes used to be reserved for top-level employees at large businesses, but now extend as far as entry-level workers like sandwich makers. Though Jimmy John’s is currently facing some legal trouble over their policy, this goes to show how prominent the practice has become. Non-competes are notoriously difficult to enforce at the entry or even mid-level but some companies insist on using them regardless. If you have to, know this:

When crafting a non-compete, keep in mind a few things. Best practices, like the 18-month rule , are easy to follow and enforce, but other practices can be a little too aggressive, and could get you in trouble. Though it might seem like a fair deal, agreeing to not steal employees from other companies is illegal. It stymies competition in your industry, and could work against you in the long run:

“Comparing states that allow firms to enforce noncompete agreements to those that do not, Mark Garmaise of UCLA found that managers earn less and they receive incentive compensation less often in states with noncompete enforcement, all else equal. Other researchers have found a similar effect in states that provide employers stronger controls via trade-secret law.” — James Bessen ( @JamesBessen ), economist and lecturer at Boston University School of Law.

Non-competes don’t work in every industry, but if you’re careful when crafting them, they could help ensure that your employees don’t take the first offer that seems like a better deal, especially if they’re already happy working at your company.

Avoid the need for non-competes altogether by paying your employees more than competitively, being as flexible as possible with work schedules and creating clear paths toward advancement within the company. Employees in highly competitive fields may understand just how much they stand to gain by making a move, but human nature is to stick around if you’re happy and comfortable.

On the Offensive: Poaching Safely

So maybe you’re looking to hire some new talent yourself, and want to see what the competition has to offer. Before you jump into looking for potential new hires, Luke Vernon, Business Builder at Sproutwell, Luke’s Circle, and TechStars, has a few things to consider when attempting to poach:

  • You usually get someone who is already set in his/her ways who can be difficult to retrain in how your company does things. Do you poach or mold?
  • Keep resource allocation in mind. The other company may have more resources, bigger budgets and more support than yours can offer, making your sweet new hire, a sour grape fast.
  • Pay attention to the culture at the company you’re poaching from. Are they sluggish and slow? If you’re fast and furious, the new hire may be a dud.
  • When in sales, avoid those with big networks over solid skills.

Vernon recommends looking for employees who may be on the verge of a promotion, or who are looking to expand their skill set within the field. And while you may want to go the extra mile in giving an employee an offer that will lure them over to you, make sure you’re still putting them through the same recruiting process you’d have an applicant go through. Just because an employee fits in at a competitor doesn’t mean they’ll fit in with you, regardless of how well they’re performing. Besides a potential poach’s proven skills in the field, all the parts of making your recruiting process attractive hold true.

Poaching isn’t the nicest practice in recruiting, but it’s not a dirty one either, as long as you can keep it in legal. Non-competes can similarly help deter your own employees from getting poached, but again, it’s all about abiding by the law. In recruiting, may the best company win.

Trakstar Hire is considered the most user friendly hiring software on the market. If you’re ready to take your recruiting and hiring to the next level, request a Trakstar Hire demo today.