Career Development

What Is Employee Poaching? (Definition and Strategies To Prevent It)

February 22, 2021

When an employee possesses highly sought after skills and experience, it's common for companies to want to attract these employees so they can have top talent at their organization. If you have these skills, you can benefit from having the attention of organizations that are willing to provide higher pay and more benefits to get you to join the team.

One way that employers may recruit new employees is by poaching them from competitor companies. In this article, we explain what employee poaching is, how employee poaching works and provide a list of strategies companies can use to prevent poaching.

What is employee poaching?

Employee poaching is a legal practice that involves an employer contacting an employee at a competing company with the intention of convincing the employee to apply for a job at their organization. Employee poaching is more common with positions or within industries that are in high demand because the employee usually has the education, experience or skills that may be hard to find and is beneficial for the business.

However, job poaching isn't limited to industries like technology; any company can engage in job poaching to attract top talent.

If employee poaching is successful, the poaching company gets the benefit of having a high-qualified employee on staff while taking talent away from a competitor.

Read more: Job Hopping: Is It Okay?

How employee poaching works

It's common to see employee poaching in fields where employees need to have certain technical skills, such as coding, development, programming and analysis. These skills are often in demand, and employers and recruiters contact these employees to offer better pay, more benefits or a mix of the two to provide enough incentive for them to leave their current company and provide their skills to a new employer.

As an example, a recruiter may contact a software developer who works at a large computer systems design firm and offer them incentives, including higher pay, if they leave their current employer to take a position at the new company. If the software developer accepts the job proposal, then you can consider them to have been poached from their current employer.

This is a popular way for skilled employees to make more money, but it also provides them with an opportunity to learn new skills, be closer to job promotions (which usually equates to even more money) and work for high-quality employers they can show on their resume for when the employee is ready to take on a job elsewhere.

While you may experience these benefits as an employee who is poached for another role, you may want to consider how often you allow poaching to occur, or how often you change jobs, as too much change can signal to a new employer that you have a difficult time remaining loyal to a company or may not have the career focus a new company is looking for.

Strategies companies use to prevent poaching

Companies may want to employ anti-poaching measures so they can retain top talent. These strategies include:

Using a no-poaching agreement

Companies may enter into no-poaching agreements with their main competitors in the industry, which means that each company agrees not to attempt to recruit employees from each other. The agreement may extend to hiring too, even if an employee applies for the position on their own.

In either instance, it kept the company from losing out on their best, most skilled employees, but does end up preventing the employees from being able to pursue other opportunities that may be better for them financially or otherwise.

No-poaching agreements may seem great for the companies who are part of the agreement, but not drawn up correctly, and the company may violate anti-trust laws. To prevent any issues with using no-poach agreements, many companies use non-compete agreements instead.

Requiring a non-compete agreement

A non-compete agreement is also sometimes referred to as a non-compete clause (NCC), and it's an agreement between an employer and an employee rather than between competing employers. The non-compete agreement states that the employee will not go work for a competitor for a certain length of time after their employment ends with their current employer.

The agreement may also state that the employee cannot open their own competing business after terminating their employment. Companies use non-compete agreements as a way to prevent employees from sharing proprietary information to competitors.

For example, if the software developer leaves their position with the computer systems design firm for whatever reason, their non-compete agreement may state that they cannot work for a competitor or open a competing business for at least three months.

It's typical for a company to only prevent employees from working for competitors for a handful of months, at the most. A longer time period can be unfair to the employee because it can stifle their opportunities in the industry in which they would normally seek employment.

Read more: What Is a Non-competition Agreement?

Measuring employee engagement

Organizations that consistently measure employee engagement can realize any pain points that employees are experiencing before it becomes a big enough problem that they seek employment elsewhere or are open to employee poachers. Employers can consider conducting an engagement survey for all employees to take once or twice a year or encourage managers to have regular meetings with their staff members to discuss engagement.

Knowing how the staff views the organization and how connected individual employees feel about their place at the company can give an employer the guidance for how to engage them more.

Read more: How To Engage Employees

Addressing employees' needs

Once you measure employee engagement, you should be able to address their needs. It's especially important to pay attention to what top performers need from your organization so you can prevent these talented individuals from feeling enticed by poachers from other companies. Employees may be looking for benefits like regular working hours, better salary and raise structure, chances at promotion, safe work conditions, recognition and opportunities to grow their skills.

Forming an incentive plan

Instead of, or in partnership with, a non-compete agreement, a company may utilize an incentive plan to keep employees at the organization. Through an incentive plan, an employee may gain more rewards and incentives the longer they remain employed at the company. Not only does an incentive plan give an employee a monetary reward for their loyalty, but it also serves as a motivator for the employee to work hard and remain focused, knowing that their work contributes to the success of the organization.

Read more: 4 Steps for Creating an Employee Rewards Program

Developing a company culture

A company culture comprises the values an organization has that drives business operations, strategy and relationships with employees, stakeholders and customers. A company culture that exemplifies the values that an employee cares about most can keep employees loyal to the organization.

For example, if a company strives to be collaborative and creative, and an employee is a very creative individual who craves working in a team environment, this may be the perfect place for their employment. A positive company culture can encourage more engagement, loyalty and productivity from employees because employees are usually happier in these environments.

Read more: How To Create a Company Culture: Examples and Tips

Using a non-solicitation agreement

A non-solicitation agreement is similar to a non-compete agreement that focuses on preventing a former employee from reaching out to their former employer's customers and clients. Even with a non-solicitation agreement in place, employees can still work at a competing company. Employees may not want to leave an organization if they have taken time to build relationships with clients at that company but know that they have to end the relationship when they go to work elsewhere.

For example, a salesperson has probably built up relationships with clients and they come to rely on these clients to reach their quota through upselling products or continuing to fill their regular orders. If that employee has signed a non-solicitation agreement, he or she may not want to go to another company because then they would have to start their client list from scratch. This can keep employee poaching from being successful, as employees would rather be able to keep their client list.

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