Is Job Poaching Unfair?
What is Job Poaching?
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Organizations can only achieve a higher productivity if the organizations possess a skilled labour force that is able to adapt new knowledge and technologies (Muehlemann et al., 2021)
However, these highly specialized employees are already being recruited by another organization which can sometimes be their prime competitor. Thereby, in order to acquire the best talent, some companies offer these highly qualified and top specialized employees better compensation as compared to their present employer, causing employees to move to the greener pasture. This act is known as ‘talent poaching’ or sometimes as ‘employee raiding’.
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Kim (2007) describes “Employee poaching” or “employee raiding” as the situation in which a firm targets and hires the key employee(s) of a close competitor.’
Employee poaching became the talk of the most Human Resource Departments of major technological companies such as in Apple (Bradshaw, 2017). “Poaching” gained its notoriety later among the other tech giants such as Pixar, eBay, Google, and IBM in the early 2010. These companies alleviated the recruitments of high-tech employees after shaking hands to a no-poaching hiring practices agreement. This practice did not last long as it disabled “cold calling” practices. Thus, poaching remains very common in the IT industry.
Is it Legal?
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Employee raiding remains legal but it is viewed as unethical. Poaching is beneficial for the recruiter since the employer can utilize the employee’s specialization and the skills along with experience in achieving the competitive advantage for the company specially in struggling circumstances.
Benefits
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Confidentiality could be breached and the the poacher could gain access to sensitive information from the employee as well. The poacher may not require to invest much on the employee’s HR related costs as the employee has already been trained and is already a specialized professional in the field. Therefore it saves recruitment and training costs for the poacher.
Why Poach?
Other than the above mentioned pros that almost makes any company poach for predatory recruiting, benefits of client raiding are more important in settings with other characteristics, for instance, those in which the client-firm would require a fraction of the labor force in- house and acquire the remaining labor input through outsourcing. Then, it is plausible that a service-providing firm will be more likely to seize the business opportunity if it has an ex-employee working in the client-firm (Battinson et al., 2021).
Possible Outcomes of Poaching
Regardless of all the benefits the poacher gets, employee raiding could put the employee’s ex-company, poacher as well as the employee in great danger. Poacher could be in trouble as well if the competitor decides to sue them for luring its employees.
Ex-employees can also be sued by the company if the ex-employees, upon their recruitment, have initially signed the non-compete agreements which prevents the signed employees from pursuing employment with their clients or their competitors.
Conclusion
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Prevention is better than cure, all the legal cases aside, the ultimate result would be that the employer losing its valuable asset to its own competitor with wastage of the related recruitment expenses, sign-on bonuses, training and retraining expenses.
There are many ways to alleviate or to mitigate job poaching by competitors. Human Resource Departments should implement non-compete agreements or long term incentive plans in order to build employee loyalty to the company.
Employee Retention program need to be implemented while boosting employee morale in a work friendly culture in the organization. Employees should be given the opportunity to bring up their issues and also should make them feel connected. Thus by combining all of the above a successful strategy can be formulated and should be implemented in order to avoid talent poaching by competitors.
References
Battiston, D., Espinosa, M. and Liu, S., 2021. Talent Poaching and Job Rotation. SSRN Electronic Journal.
Bradshaw, T., 2017. The Blessing and Curse of Being an Apple Supplier. Financial Times. Available at ft.com
Campling B., 2020. Poaching employees
isn‘t as evil as it seems. Retrieved from
https://blog.recruitee.com/poaching-
employees/0
Kim, Jin-Hyuk., 2007. “Employee Poaching, Predatory Hiring, and Covenants Not to Compete,”MPRA Paper 83254, University Library of Munich, Germany.
Muehlemann, S., Schweri, J., Winkelmann, R. and Wolter, S., 2021. An Empirical Analysis of the Decision to Train Apprentices.
While this blog post has a propaganda point of view, confidential business information falling into the hands of a competitor is a real concern for businesses. Innovative companies that develop new products or services often require their employees to sign a non-compete clause.
ReplyDeleteYes Vishwa , but regardless of the signing of non-compete cause, employees still get raided by competitors. It ia really important to mitigate it. Thanks for the feedback Vishwa!
DeleteWhile a person's loyalty to their employer is an admirable quality, it's not required by any means. Professionals are allowed to choose where they want to work. However, interesting and very informative article.
ReplyDeleteThis comment has been removed by the author.
DeleteLoyalty is everything Manoj. Thanks for the feedback
DeleteLoyalty is everything Manoj. Thanks for the feedback
DeleteLoyalty is everything Manoj. Thanks for the feedback
DeleteMitigating job poaching by competitors is important to enhance the performances of employees. It is important to take legal actions on job poaching.
ReplyDelete