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Poaching the Best Talent Worldwide

by Nov 21, 2005

Few topics in the field of recruiting evoke such strong opinions as the subject of poaching talent, but it is a topic that must be explored further. In the United States, it is clear that a number of corporate recruiters shy away from poaching talent on the grounds that it is unethical to approach and offer possible employment to someone who is already gainfully employed by another organization, such as a direct competitor, despite the fact that the target employee could always just ignore the recruiter’s efforts or opt out at any stage in the process. Given that firms in the United States are typically the most aggressive recruiting organizations, having pillaged other countries for top talent in information technology, healthcare, and the sciences for years, you might assume that the dominant perceptions around poaching talent in the Unites States are similar to those of recruiters abroad. If you did do that, you’d be wrong!

U.S. Perceptions Exist in a Vacuum Two weeks ago, I spoke at ERE’s first European conference, to a crowd of recruiters representing some of Europe’s most recognized companies and a handful of U.S. companies with a strong global footprint. I opted to speak on what I consider the most aggressive recruiting tactic available to corporate recruiters: targeted talent poaching. Prior to arriving in Brussels, Belgium, I prepared for a negative reaction, based on previous experiences with this topic in the U.S. But to my surprise, the reaction wasn’t negative. In fact, one member of the audience spoke up and indicated that poaching had become par for the course, a comment that drew affirmation from the rest of the audience. This caught me by surprise, only because over the years I have worked with a number of European firms, and when compared to firms headquartered elsewhere, their hesitation to adopt aggressive approaches was by far the most resolute I’ve experienced anywhere in the world.

Reflecting on that experience, I realized that it wasn’t out of line with other global experiences I’ve had this year. Throughout 2005, I touched down in eleven countries, mostly in Southeast Asia and Central and Eastern Europe. The perceptions around poaching encountered in Europe could be seen in Australia and New Zealand, where the shortage of skilled talent has threatened the survival of dominant industries. One banking organization was so aggressive that it approached the spouses of targeted candidates while their respective partners were at work to recruit the spouse as a decision influencer. It seems as though the dominant position the U.S. has enjoyed for years in the political/economic landscape has perhaps made our recruiting organizations complacent. As migration to the global economy causes rapid wage inflation in underdeveloped nations such as India, China, and Eastern Europe alongside steady wage deflation in hyper-developed nations like the U.S. and Great Britain, it is clear that such complacency may tip the scales in favor of the developing nations as the war for talent escalates.

A Primer on Poaching

Poaching talent is the practice of proactively targeting and hiring top talent away from a competitor or top firm, with the specific intention of:

  • Securing skills or capabilities faster than if you were to attempt to develop talent internally through training and development efforts
  • Securing expanded capacity (i.e. more bodies) that will require less ramp up time
  • Mitigating high-level talent losses due to attrition
  • Damaging your competitors’ ability to achieve their strategic objectives

The approach is not new and has been deployed around the world for ages, particularly in sports. Take a World Cup soccer (football) team for example. Can you think of a single team that is made up entirely of players from the country that team represents? The truth is that when winning matters, the best teams seek out the best talent wherever it resides, be it their backyard or a tiny undeveloped country nestled between two warring nations.

An Unstoppable Global Trend

The migration to a truly global economy is impacting every nation large and small in both positive and negative ways. One of the most apparent impacts is that it has increased demand for labor in nations that once supplied a surplus to developing nations, causing dramatic increases in local wages, in turn making it more difficult to recruit talent abroad. In addition, the rampant growth of offshore outsourcing has imbued developing nations with disposable income, making possible their investment into higher value work. Combined, these two external forces are complicating the pillage model that for so many years have filled hospitals with nurses and hardware/software firms with engineers. It has also turned the tables, such that developing nations must now devise ways to steal talent back from hyper-developed nations, i.e. poach! Aggressive firms in such nations are following the leaders, they are:

  • Putting work where the talent resides
  • Subcontracting outsource contracts for low value activities to other developing nations
  • Opening offices in locations that compete directly with their clients
  • Offering very lucrative compensation packages for key players who return or are willing to relocate to a developing nation

In short, the war for talent is no longer a local war, but rather a global one that will drive the evolution and practice of talent poaching.

Three Dominant Poaching Strategies

Poaching activities largely fall into one of three categories:

  1. Direct sourcing. Firms use new data-mining techniques and tools, combined with age-old recruiter phone techniques, to mine the organizational structure, employee identities, and employee performance indicators of talent and product competitors. This competitive intelligence is later used to determine whom specifically should be targeted for poaching. All work is carried out internally.
  2. Third-party poaching. This strategy relies on using a vendor or series of vendors to identify everything from which firms to target to what individuals to go after based on your strategic objectives. (It is also by far the most common way organizations that find poaching unethical actually practice it themselves. In their minds, poaching is perceived as unethical only if you do it yourself.)
  3. Attract them with “honey.” The third strategy is likely the one that few organizations would associate with poaching, what we call the “attract them with honey” strategy. This approach utilizes six different channels to drive candidates to your organization from other specific organizations, much like product firms steer you to their products in grocery stores.

All three strategies have the same impact in the long run, but offer firms a varied level of “ethical exposure,” timeline, and cost. The three strategies outlined above are rank ordered in terms of their time to productivity and cost, from least expensive with quickest impact to most expensive with slowest impact. Because the ethical concerns over poaching are so great in the United States, the remainder of this article will focus on the channels that power the “attract them with honey” strategy.

The “Honey” Strategy: Six Primary Channels

The “honey” strategy is powered by a number of channels that drive candidates into your recruiting process. While the list of actual channels is long, most of them fall into six categories:

  1. Employment branding
  2. Employee referrals
  3. Event recruiting
  4. Magnet hiring
  5. Boomerang hiring
  6. Internet

Each of these channels is outlined below.

The Employment Branding Channel

Many firms that have made an attempt to manage their employer brand do so with no particular goals other than to develop either “Best Place to Work” or “Employer of Choice” status (note that both of those terms are registered trademarks!). Such efforts are, for lack of a better word, lame. Employment branding is not an art, but rather a science. It focuses on identifying which employer attributes and characteristics are needed to recruit a highly defined target audience, aligning organizational structure and management practices with those attributes where possible, and communicating both directly and indirectly with the target audience to position the organization as a leading firm providing those attributes. Employer branding relies on:

  • External recognition as a leader in providing specific employer attributes, such as a value on diversity, innovation, or talent development
  • Consistent messaging that continuously communicates who and what the firm is and what value it provides to prospective employees
  • A story inventory that provides specific examples of how management programs and practices deliver value to employees
  • A specific and differentiated theme (slogan) that competitors cannot easily mimic or assert
  • Recognition for functional excellence
  • Lots of lots of press coverage in very specific publications that reach into the targeted audience

The Employee Referral Channel

Just as most firms approach employment branding with no specific goal or outcome in mind, they often develop employee referral programs that meander and produce mediocre results at best. A targeted employee referral program, on the other hand, utilizes the employee population to do all of the competitive intelligence mining that enables targeted poaching, with an added benefit: It gets employees to utilize their personal networks to initiate the recruiting process. A targeted poaching effort that utilizes the employee referral channel relies on:

  • Active referrals: An approach that goes to employees with a specific set of questions that prime them to remember who they know in specific roles, organizations, etc.
  • Top performer referral prioritization: An approach that acts on all referrals coming in from proven top performers before acting on those from other employees
  • Reference referrals: An approach that contacts references of past hires that proved to be top performers and asks who else they know
  • Stakeholder referrals: An approach that leverages non employees who have a vested interest in the success of the company to generate referrals, such as consultants, suppliers, stock holders, etc.

The Events Channel

Nearly every organization that recruits will attend at least one event a year, be it a recruiting event, an industry trade show, or a vendor exposition. But few select events to participate in based on their probability of attracting employees from specific competitors. Utilizing events as a poaching channel relies on:

  • Identifying and participating in specific industry trade shows or association events that have a proven attraction to employees of targeted competitors
  • Hosting onsite seminars and certification courses that are attractive to the competition
  • Participating in non-industry/non-professional events that attract a target audience, such as a beer and wine or arts festival.

The Magnet Hire Channel

The magnet hire channel is quite possibly the easiest one to understand. It simply relies on polling top performers to identify the most respected or most visible professional who they would be interested in working with, and then working to hire that person in hopes that they would attract others to your organization.

The Boomerang Channel

At some point in time, nearly every employee decides to make a change and severs an employment relationship. The boomerang channel is used in poaching by identifying former employees that are currently employed by a competitor and developing specific strategies to lure them back — which brings the added benefit of lots of competitive intelligence about organizational structure and management practices, but not trade secrets or product information!

The Internet Channel

The final major channel that is used to power the “honey” approach to poaching is the Internet channel. Unlike job posting and data mining, these approaches use the Internet to develop resources that employees of competing organizations are drawn to. Examples include:

  • Hosted information resource sites. These sites provide valuable information that is useful to the target audience in their current role. For instance, a hospital organization might launch an e-newsletter for nurses that provides summaries of the latest breakthrough and techniques.
  • Moderated professional forums. These tools enable professionals from a multitude of organizations to share information and discuss issues in a safe environment, free from advertisers and spammers.

Conclusion

The battle lines in the war for talent are expanding, and those with the most to lose need to understand that aggressive tools and approaches will be used by the competition. There is no place for complacency on the battlefield, which causes unnecessary death. Developing firms in developing countries are desperate for talent, and they have no reservations about poaching your best people. The evolution of poaching has begun, and there is no turning back. While the honey strategy will work in the short term, it is expensive and takes time. Eventually recruiters will have to learn to accept the role they play in their organizations’ future and get past what concerns they may have with direct poaching.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  • Danielle Monaghan

    Great article, accurate and insightful. I would prefer that corporate recruiters continue to work only ‘low hanging’ fruit to salve their conscience about perceived poaching. This leaves the top talent wide open for our corporate executive recruiting team to call and recruit!

  • Anthony Haley

    You know, in a strange sort of way, I look forward to reading Dr Sullivan?s articles, possibly for the wrong reasons but you can almost be sure of his attempts to try and stir things up.

    Controversial articles are what we all like because it stimulates response and it makes our next visit to ERE all the more exciting to see what someone else has to say.

    Dr Sullivan?s articles do seem to be pretty much the same and now we have yet another article on poaching. Like the other ones, it contains the one point that seems to be either entirely missed or deliberately ignored. It would be pretty hard to miss so I can only assume it is ignored.

    The point of ethics in poaching is not the act itself but rather the intent of the act

    The traditional meaning of the word poaching is when you take something illegally.

    According to http://en.wikipedia.org/wiki/Poaching, as of 2005, the verb is also often used to refer to the act of hiring employees who are already employed by another company (especially a competitor) or trying to do so by offering contracts to already employed persons. So in this sense, if you search, you poach. You can?t do one without the other.

    When the word poaching is used to describe the type of action you use to entice someone else?s staff to work for you, everyone knows what you mean. Unless you work with the unemployed, I guess it?s hard to recruit without poaching someone from somewhere

    There is no confusion when using the word in the right context. After all you can poach an egg but no one accuses you of cooking candidates. So in the world of recruitment, when someone says poaching, they really mean searching.

    “Searching the best talent worldwide” as a heading does not have the same impact but is probably a more accurate heading for this article. Using the word poaching is just more controversial.

    Now, back to the issue and the one sentence in the article that crosses the line and it?s not the word poaching. It?s the intent of the action.

    Poaching to “Damaging your competitors’ ability to achieve their strategic objectives”

    If the intention is to deliberately damage your competition in any way shape or form, the action becomes (that dreaded word on ERE and I apologise for mentioning it again) unethical and in some Countries illegal.

    It also brings the more sinister meaning to the other hyped up expression ?war for talent?, because rather than trying to recruit the best people for your own company, you are deliberately trying to inflict harm on another and therefore making you the perpetrator and the one actually trying to create a war.

    The only real beneficiaries in all this are the warmongers whose business it is to sell their services on how to fight a war.

    Poach from your competition to bring you the best people. Do it to enhance your own company and to better the individual but don?t do it to deliberately damage your competition, for any reason.

    The article compared all this to football (soccer). Buying players from another club to get the best players does indeed happen all the time. It is part of the game as is hiring your competitor?s staff to get better people.

    Hiring them to deliberately inflict damage however is more akin to trying to break a player?s leg to put them out of action. You know it?s wrong, it?s bad sportsmanship, the player welfare is not being considered and it?s the act of desperation.

    Be competitive, be tough but be fair.

    Oh and hiring your competitions best staff has been happening for many years. It really is nothing new. Ask IBM.

  • Karen Mattonen C.A.C., C.S.P

    Anthony,
    so well said, but I wonder sometimes why we even bother. People will believe what they want until the unexpected and unavoidable finally happens to them. It is like driving w/o a seat belt for sure.

    My biggest concern is the lack of responsibility that many of the authors who present this information have towards their readers. There is so much implication that ?poaching? is A-OK, well Duh, it isn?t ? Recruiting is fine and dandy, there are no laws against offering candidates a better opportunity? None whatsoever.. But like Anthony has stated, it is the how it is done that is the problem.

    Even our Gentile Author used to make mention of this fact in other articles in the past. The times have changed, yes it is true, but the rules have become stricter, as states have been adopting more anti predatory hiring regulations? It ain?t getting prettier that is for sure.

    For example ? YES I present information again that is valid Non-American researchers who are focusing on US companies should be cautious to operate within legal and ethical boundaries. In reality, so much information is available through legal means that taking illegal actions really does seem well unnecessary and not too smart.

    Anyone who is collecting information on American Companies should be aware of several regulations that can ultimately impact their efforts. The first is the Economic Espionage Act, passed in 1996, which defines many areas of economic espionage as a criminal offense. If convicted, offenders can be sentenced to 10 years in prison and fines of up to $500,000 for an individual and $5,000,000 for a company can be given.

    I will Not give an in depth review of the law as the information can be found easily on the internet but please note that it can mean as much as illegally securing marketing plans, customer lists, product information and other sensitive data.

    A great one to also review might be Utah?s Anti Predatory hiring Law passed early this year, as well as Colorado?s very strict New act created this year under the Under the Colorado Uniform Trade Secrets Act, C.R.S. ?7-74-101, et seq.
    Which CLEARLY States
    ?The Tenth Circuit, which helps determine law for Colorado, has held that predatory hiring practices are illegal if they (1) impair opportunities of rivals and (2) aren’t competition on the merits or (3) are more restrictive than reasonably necessary and (4) the conduct appears reasonably capable of contributing significantly to creating or maintaining monopoly power. But the Tenth Circuit has noted that ‘the hiring of a rival’s employees is not ordinarily exclusionary.’

    It also may be necessary to mention that Colorado goes on to mention that a A trade secret is considered confidential business or financial information, listing of names, addresses, or telephone numbers, or other information relating to any business or profession ? Nevada states a trade secret is one if it says Private or confidential (ie a business telephone directory

    So It does come down to a simple word ? Poaching ? meaning Predatory, or Recruiting which is really pretty standard?

    I left it simple, I found the information, and so can others; An important factor that many of us miss is that in America, lack of knowledge or ignorance of the laws don’t wash with the judges.

  • Robb Myers

    I also enjoy reading Dr. Sullivan’s articles and by and large I believe he hits the nail on the head.

    Anthony, in your review you say:

    ‘Poach from your competition to bring you the best people. Do it to enhance your own company and to better the individual but don?t do it to deliberately damage your competition, for any reason.’

    Won’t the by-product of your hiring from your competiton be that you will damage them in some form or another? If you are able to successfully bring on board their top sales person, their revenues will decline. If you hire their innovation leader then you have damaged the future growth of the organization.

    Anytime you successfully hire away a top performer from any company, damage will be done in one form or another (revenue, morale, future offerings, customer service, etc.).

    I agree with you, go after the best, but let’s also be realistic and admit to the fact that damage will be done. If you target the top performers in your competition (which you should do as part of your talent strategy) you will cause them some harm, either short or long term.

    You can’t have it both ways, it just doesn’t work like that. Productivity and profitability are 2 key indicators of a company’s success. Recruiters need to have the mindset that everyone they bring into an organization should have a positive impact on these 2 points. The well being of the competition should not play a part in the decision to go after someone.

  • Karen Mattonen C.A.C., C.S.P

    Robb,
    I believe what Anthony is trying to say (and what I have also been attempting for years, he does a better job), is that yes recruiting will have some negative effects on a competitor for sure, but when one intentionally raids a company over and over, or recruits an entire team (poaching) with the Actual intent to Harm then the outcome is disastrous.

    It is not only disastrous for the company but it also affects the community, and all businesses that are involved with it. How ? well it will start with the employee morale getting low, people quit or leave due to lack of support, sales or mgmt- (where was affected initially). Of course that now affects the sales of the company, and of course as clients leave due to lack of support from staff more employees will have lower self confidence in the company. (what a Catch 22)

    Now the company is going to have problems paying their bills and staff, which causes more problems ? now customers who depend on them for payment are also going to have struggles themselves, which will in turn affect their business.

    Recruiting one sales person, or one manager at a time well that is easy to get over.. gee people quit and people get hired. But, a whole team, a whole department, all the sales staff.. that is another story..

    We may call this Guerilla Marketing.. it is appearing to be more like Baboon Marketing

  • Anthony Haley

    Robb, it?s all about the reason you hire the competition?s Innovation Leader.

    You can either hire them because they are the best in the business and you want them working for you or, according to the article, you can hire them with the specific intention of inflicting damage on their company.

    I?m not saying don?t hire them, I?m saying hire them for the right reasons. Hire them because they are the best not because of some bird brained idea that it?s smart to damage another company.

    That?s all.

  • Karen Mattonen C.A.C., C.S.P

    To quote the Author of the article

    ‘The evolution of poaching has begun, and there is no turning back’

    May I suggest that the Author become more aware of the evolution of privacy and anti predatory hiring statutes that are being and have been implemented in the 50 states and also in Other Countries – including Canada, the EEC’s countries, Australia, Japan, and China. (to name a few)

    How one may have been able to hire 20 years ago is not the same today….and there is no turning back on that factor either. The internet has changed the outlook on obtaining data due to privacy issues. We can only expect it to get worse not better.

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