Companies have long eyed up competitors’ talent with a view to bringing them on board to increase their own competitiveness. However, this activity is fraught with danger in terms of potential legal consequences. There are many dos and don’ts of staff poaching.
If a company has an eye on a competitor’s employee, there are potential ways that they can be recruited. They could be approached direct, but another method could be to use a headhunter or executive search company. These are specialist recruitment agencies who will source management and top level jobs. They will act as a middleman seeking out and approaching key individuals putting distance between the employer and potential employee.
Having a professional network can help a company reach out to targetted individuals. The use of social media in recent years has done a great deal to enhance professional networks. Indeed, the power of Linkedin has grown dramatically in recent years. It is said that anyone of use has 200 contacts within our circles and we are six steps away from contacting the person we would like to talk to. That is very powerful. Contacts in our network can come from many different sources – partners, family, friends, neighbours, clients, etc. The traditional old boys' network has always worked rather well.
Employers should always beware of taking on competitor’s employees who have a restrictive covenant clause in their contract which may be pursuable in a court of law. The wording of such a clause is, of course, key.
For those employers that value their employees and fear them being poached by competitors, there are key things to do in order to protect their interests.
Providing an interesting job is really important so that employees maintain job satisfaction along with career development opportunities is essential to meet career aspirations. Succession planning will provide a career path that top performers can see and value acting as a retention tool. A comfortable work environment is also really important to encourage engagement. It goes without saying that financial reward should be right although non financial benefits are also important.Becoming an employer of choice is great to bamboozle the competition.
Having managed to recruit successfully, a further way to protect themselves, a company should include a restrictive covenant or non-compete clause in a contract that includes details on the timescale that an employee may not work for a competitor and a banned geographical location. It is always good to draft something that would stand up in a court of law. It may not be viable if the restriction is not integral to the business’ survival.
If a company receives a letter of resignation from a valued member of staff who may have been poached, consideration may be given to tactics of how that employee can be persuaded to stay. If they are valued, this is always worthwhile.
Author: Sandra Beale
DISCLAIMER: This article should not be regarded as constituting legal advice in relation to particular circumstances. This article is merely a general comment on the relevant topic.
Published on 22nd August 2014
(Last updated 28th March 2018)