When you hear the word “poaching,” you might think of tiger skin rugs and sketchily-sourced ivory. But poaching isn’t limited to the animal kingdom. Job poaching is also a business practice that, despite the name, isn’t always as shady as it sounds. (Except when it is… but more on that later.)
According to our recent Hiring Challenges Survey, there’s never been a more pressing time to talk about job poaching, non-competes, and all things employee retention.
Today, many employers in talent-tight industries struggle with retention, with nearly 45% of respondents citing competition as their biggest retention challenge. Whether you’re the one luring employees away from their current companies or you’re on the other side struggling to keep employee turnover low, now is a great time to learn more about what job poaching is and how it can work for or against you.
We’re here to give you the full scoop — the good, the bad, and the ugly. From what it means to how it’s done, we’re running through the potential benefits and drawbacks of job poaching in a tight talent market.
What we’ll cover:
- What is job poaching?
- Is job poaching illegal?
- Non-compete clauses: A poach-proof solution?
- 3 ways to protect your business from employee poaching
- What if my company's the one doing the poaching?
First, what exactly is job poaching?
Also known as employee poaching or talent poaching, job poaching is the art of luring top-shelf employees away from competing companies. It’s all about conveying why your offer is better than their current situation. And if you poach effectively, you not only gain a talented employee, you also get a leg up on the competition.
While anyone can engage in employee poaching, it’s most common in high-demand industries like software engineering or finance where highly-skilled employees are in short supply. But no matter the industry, advanced knowledge and skills are hot commodities — and top performers with the receipts to prove it are always coveted.
And according to our previously mentioned Hiring Challenges Survey, it’s open season on top talent. Out of the 791 employer respondents who participated in the survey, 44.4% said it's the competition — not a lack of advancement or development opportunities — that is the key reason for their retention headaches.
With 36.7% of responders citing finding candidates who stay as their top recruitment challenge, this is one issue you can’t afford to overlook.
Last but not least, let’s not forget about the tightening talent market.
If you’re operating in one of the many industries facing ongoing labor shortages, recruiters have no choice but to get crafty. Our survey also found that 65% of employers expect a one-two punch of economic pressure combined with talent shortages to impact their business this year.
With all that’s happening in the market, it’s no wonder recruiters are eyeing up other company’s employees. But is poaching illegal? Or just unsavory?
Is job poaching illegal?
Believe it or not, job poaching is legal in the US (and pretty much everywhere else, too).
While the term “poaching” does sound dubious, employees (unlike elephants or tigers) can’t be stolen or poached against their will. An employee has to be ready and willing to jump ship in order to be poached, and there are no laws preventing recruiters from hiring another company’s existing talent.
Workers have a right to quit of their own accord if another business has more to offer – even the courts agree. Although high-profile attempts to implement no-poaching agreements in the tech industry have been discussed at length, the US Department of Justice has ruled that these agreements actually limit an employee’s career opportunities.
But that doesn't mean they're risk-free for employers.
Non-compete clauses: A poach-proof solution?
While job poaching may not be illegal, it never feels good for the company on the losing end. To prevent that short-end-of-the-stick feeling, many companies ask their employees to sign non-compete agreements.
A non-compete agreement is a legally binding contract between an employee and their employer. While the contents of the agreement can differ from one job to the next, the main purpose of these contracts is to inhibit employees from competing against their previous employer for a designated period of time after they quit.
Non-compete agreements can help prevent employees from working for direct competitors and disclosing trade secrets or other private company information. They can also work to reduce turnover, helping you keep your best employees longer. And because most non-competes also include a clause or two about working for or with previous clients, you may also reduce the risk of losing customers if an employee decides to leave.
But despite the benefits, non-compete agreements can’t completely protect you against job poaching.
For one, they don’t always hold up in court. In states like California, non-compete agreements are not enforceable.
It’s also important to note that non-competes are short-term solutions by nature. There’s no way for an employer to prevent an ex-employee from working in their industry in the future, and you can’t deprive a past team member from the chance to develop their career at a competitive company.
But the good news is, non-competes aren’t the only way to curb employee poaching.
3 ways to protect your business from employee poaching
In today’s job market, there’s a good chance your competitors may be trying to poach your top performers. So what steps can you take to poach-proof your business?
1. Pay team members fairly
Before you get too wrapped up in non-competes, take a long hard look at your employee compensation package.
According to the Pew Research Center, 63% of employees who quit did so because of low pay. It’s almost impossible for employees to feel motivated when they aren’t being paid fairly and if a better offer comes along, even your best workers will leave for greener pastures.
To ensure that you’re paying your workers fairly, keep an eye on the market rates for positions in your area. If your compensation package doesn’t stack up to the competition’s, look for ways to give raises and other key perks and benefits to underpaid employees.
From ample paid time off to flexible working options, a high salary isn’t the only thing that employees value. But if your salaries and benefits are both lacking, employees may start looking for better opportunities.
2. Listen and act on employee feedback
When your employees feel heard and valued, they’re more likely to stick around. And if not, they may start looking for the escape hatch.
According to the same Pew study, 57% of employees quit because they felt disrespected at work. To retain your employees and foster a productive working environment, you need to take the time to walk in your employees’ shoes, one-on-one.
Listen to their concerns and feedback. Even if you can’t address each and every problem, the simple act of listening will make your employees feel valued. Make changes where you can, and lead with empathy. You’d be surprised how big a difference this kind of employee engagement can make, both on the individual and the company culture as a whole.
3. Pave a path to advancement
Another way to curb employee poaching is to pay attention to your employees’ career goals and use your performance management systems to help them pave a clear path to success.
According to the Pew Research study (yep, same one!), 63% of employees quit because of a lack of advancement opportunities. To keep your top performers in your corner long-term, you need to show them they have a place in your company for as long as they want it.
Take advantage of the fact that you know your employees better than anyone else. You have the inside track on their ambitions and aspirations, and the opportunity to help them meet their career goals.
People hate walking away from something they’re aspiring towards, so make it clear that you can help them meet their goals at your company — not the competitor’s.
To start, schedule a one-on-one and develop a timeline together. Chat about their short and long-term goals and the different career development opportunities available to help them get there. A little shared “vision-boarding” can work wonders for reigniting an employee’s sense of loyalty.
What if my company's the one doing the poaching?
If you’re the one dangling the better-pay-and-benefits carrot in front of the competition’s top performers – we respect the hustle. But there are a few things you should know about stealing your competitor's employees.
Know when to play nice
Employee job poaching, though legal, isn’t necessarily a polite hiring practice.
If you want to be seen as a business that plays well with others in your industry, poaching your competitor’s employees may not be the best move.
But let’s be honest – when your shareholders need results or you desperately need to breathe new life into your brand, etiquette isn’t always top of mind. If you’ve weighed the benefits and drawbacks and are totally comfortable with offering incentive plans to nab vulnerable employees from a competing business, poach away.
Just remember to really think it through before you go on the prowl. After all, no one wants to burn a bridge that they may need to cross later.
Steer clear of intellectual property risks
While new recruits may bring new ideas and innovative solutions to the table, it’s important to be cautious when leveraging their insider knowledge.
New hires who divulge trade secrets may get you into legal trouble. When in doubt, always consult with your legal team to make sure you don’t find yourself on the wrong end of a non-compete lawsuit.
Take the Apple vs Rivos case for example. Tech company up-and-comer Rivos poached several former engineers from Apple. But they didn’t just steal their employees – they also swiped their trade secrets. Before the engineers left Apple, they stole several USB drives with specs and design files from the company. (Yes, really.)
Remember, if it can happen to Apple, it can happen to anyone. Be extra careful with the information you learn and leverage from your poached recruits.
Hire better with Breezy – no poaching required 😉
Poaching the best of the best from your competitor’s team roster can be tempting. But at Breezy, we believe that great hiring doesn't have to be cutthroat…or messy.
Breezy HR is an agile recruiting platform that simplifies your recruitment process and connects you with qualified candidates faster. With features like automated questionnaires, AI-driven Candidate Match Score, hiring assessments and automatic reference checks, you can find the best talent in less time — and with no ethical gray area.
When you’re ready to land your next great hire, Breezy is here to help. See for yourself with a free 14-day trial.