POACHING OR NO POACHING?

by 

S. Priya,

 Lal Bahadur Institute of Management

Recruitment challenges are ever increasing and it is getting tougher and tougher to hire the right candidate for a job opening. The high growth rate in sectors like Technology and Retail, existing talent crunch and the increase in the number of start-ups are the main reasons for the rising challenges in recruitment. Poaching, as a recruitment strategy, has been debatable. Some hold the view of it being unethical and illegal. But, poaching is a wide-spread practice and companies not accepting to the fact are losing their employees to their competitors. There have been instances in the recent past where Non-Compete or Non-Solicitation agreements have not worked in favour of companies. Poaching is ethical as long as the intention is not to capture the employer’s customers or to sabotage the business operations.

image:freedigitalphotos.net

Poaching or No Poaching?

This is an ethical dilemma companies are in when filling niche positions. It was towards the nineteenth century that the employer-employee relationship shifted to a voluntary relation, where the power is distributed.

It has been defined as ‘the intentional actions of recruiters in one company to identify, contact, solicit and hire a currently employed individual or group of individuals away from another company.’

Poaching is a wide practice, it accounts for 30 percent of the movement in labour. The sectors like IT, technology, retail etc. are booming, NASSCOM and McKinsey predicts that the jobs technology space will increase ten-fold from the current 60,000 professionals to over 6 lacs people by 2015, and the recent increase in the number of start-ups is also fuelling hiring. Adding to this, there lack of readily available talent in India.

Poaching should be accepted, and even encouraged, to make companies more competitive. Moreover, any sort of Non-Solicitation agreement between organisations is unjustifiable under the current socio-economic conditions. The Non-Compete agreement between the employer and the employee is not legally enforceable. Organisations can’t bar an employee from venturing out of the organisation. Employees are to be treated as free people and not as subjects or assets that a company owns. There is no ethical issue involved with poaching; the final employee always has the discretion to reject the offer. Poaching can, in a free market, help organisations to put their assets to the best use.

As offshore outsourcing goes mainstream in India, multinationals are hiring Indians to head their teams in foreign markets. Notably, Accenture and Capgemini are increasing poaching employees from their Indian rivals, like TCS, Wipro, and Infosys, to compete more effectively against these companies.

When Jet airways restrained its pilots from joining Sahara, on the grounds that it had made considerable investments in training them, the court ruled in favour of the pilots stating that the skills and the knowledge acquired are a property of the pilots and they were free to take up employment with Sahara.

In 2010, the U.S. department of Justice barred giants like Apple, Intel Corporation and others from entering into a non-solicitation agreement for employees.  E-bay has been sued for entering into a non-solicitation of employees with Intuit.

The ever increasing competition amongst companies, high growth rate, especially in sectors like IT technology & services, recent increase in the number of start-ups, rising concern due to Talent Crunch are the main reasons for increase in Poaching as a recruitment strategy. Multinationals are eying the right talent who can hit the ground from day one. Companies are looking to stay ahead by differentiating on products, processes, technology and a host of other things, hence require the right skill sets and knowledge. The high rate of growth in sectors like, technology is creating more and more jobs. But the readily employable graduates in India are less than 30%. This rising gap between the skills required and that is available is creating the need for HRs to look for talents in other organisations. Companies, for example Oracle, Hewlett-Packard and Cisco, are diversifying into other businesses; this is increasing competition in an industry.

Poaching becomes unethical or illegal when the candidate, for a job, is misled by a company about the job being offer. Some practices associated with poaching cross the line when the employee is hired to steal information or clients related to the employer. Anti-poaching agreements are relevant when two organisations are engaged in joint-venture.

Employees are poached from ‘vulnerable’ companies. The real issue lies in the employer-employee relationship; it is a failure of the company to retain its employees. The reasons could vary from the pay and benefits to the whole employee proposition or because of their bosses.

The HRs should pick up signs displayed by employees at work. The most frequent sign is change in habits related to work, i.e., there is lack of engagement with projects or colleagues, large number of absences, getting up-to-date information on expense accounts.

Companies have been taking several measures to retain and attract employees by benchmarking on their employment brand against the competitors. Being competitive in pay and benefits and in the whole employment proposition could be the key. Long term incentive plans tied to the success of the business as a whole and succession planning could send a message to the employees that they are significant role and are valuable to the success of the business. Employees also leave because of their bosses, to retain employees, the managers should be effective. Knowledge sharing and trainings such as, Supervisory training, Leadership training could instil useful management skills.

NASSCOM has advised companies to not to resort to Poaching, it has been working out strategies to deal with situations where a whole of a team is wiped out or when the intention is to sabotage the operations. NASSCOM has recommended companies to follow a standardized exit and on-boarding process and ask for relieving letters from the new joinees.

There are three important stakeholders, Organisations, Educational Institutions and NASSCOM. Steps need to be taken collectively to reduce the gap between available talent and required skills. Effective education and training in institutions is the need of the hour. The stakeholders should work out strategies to formulate the curriculum, specialised courses, offer more practical exposure, guest lecturers from veterans to the students.

The article has been authored by S. Priya, Lal Bahadur Institute of Management

Sources:

1. Do no-poaching agreements help innovation or hinder careers? www.edn.com.

2. Firms Poach Top Talent From Recession-Weary Rivals, Wall Street.

3. Ethics, Poaching and Competitive Intelligence, www.ere.net.

4. Poaching Staff May Leave You Swimming With The Sharks. www.frontlinerecruitmentgroup.com.

5. Employee poaching: Not so bad after all?, www.risesmart.com/blog.

6. IT cos should not resort to poaching: Nasscom, ET Bureau Apr 28, 2010.

7. In Business, Poaching Allowed, www.vanderbilt.edu/magazines/vanderbilt-magazine/2010/04.

8. Technology Talent Poaching to Get More Aggressive in 2011, web.ebscohost.com.