poaching: unethical or a necessary part of a competitive job market?

‘Poaching’ - an unusual sounding, but oft-used term in the recruitment sector, is the process of targeting to hire (and hiring) experienced employees currently working with a competing firm. Employee poaching has been in existence for a few decades now, both world-wide and in India. IT companies and tech start-ups in the Silicon Valley have been known to poach talent from each other to satiate their need for high-skilled technical and managerial talent. In the Indian context, the likes of Reliance, Indigo, Infosys and PepsiCo and Coca Cola have been known for poaching skilled and experienced talent from competing firms.

Before we debate on the virtues and pitfalls of employee poaching, let us take a quick look at some statistics on hiring skilled talent in the Indian context:

The 2017 India Salary and Employment Outlook Report by Michael Page predicted that 45% of new headcount hires in India across sectors over the next few years would be in the middle management category.

• Nearly 80% of the 600 employers surveyed by TimesJobs.com pan-India for a study state middle managers continue to be critical drivers of their business growth. They add that this criticality makes filling positions in this cadre the most challenging in the organization. Further, internal skill gaps compel 64% of employers to look for external hires.
• Out of 1860+ respondents for SoTA’18 Report by Mettl, 73% said that the largest talent gap is evident in the mid-senior (6-15 years) level strata of their workforce. Also, the primary reason of not finding the perfect fit today at any level of hiring is “Unique Skill Requirement”. There is an active scarcity in Sales, IT/ITes and Analyst talent pools apart from other super specialized areas.

Image 1: Largest Talent Gap in the Mid Management Workforce. Source: SOTA’18 by Mettl.

All of the above statistics scream shortage of skilled talent and a very limited resource pool to tap from, most likely - a competing firm. This brings us to the big debate: Is employee poaching unethical? Or a necessary element in an increasingly competitive job market?

Job vacancies in middle and senior management across organizations call for a certain level of knowledge, experience, the right talent and soft skills. This is especially true in the case of highly specialized industries and sectors such as robotics and AI, oil & gas, pharma research and other niche segments. Recruiters and head-hunters are faced with the unenviable task of filling these roles with skilled and experienced candidates. The resource criteria are most often met by professionals working in a similar capacity with a competing firm. In a highly competitive, free market scenario, supply-demand forces are at play and it is the norm that organizations and headhunters will approach talent working with rivals and competing organizations.

First things first, poaching employees from competition is not illegal by law at a broad level. The world of recruiting is highly competitive and does call for some drastic measures, poaching being one of them. However, there is a very thin line that differentiates competitive hiring from unethical poaching. Corporates and head-hunters must identify and respect the difference and embrace ‘ethical’ practices while poaching and the big difference lies in the intent and process while hiring new talent.

The focus while recruiting should be on the right fit and not on intentionally targeting competition as the obvious source for talent in order to de-stabilize their workforce. Organizations, professional head-hunters and recruitment agencies should also work on setting clear boundaries and defining standard acceptable practices when it involves poaching. Non-compete clauses and agreements, non-disclosure agreements and garden-leave policies must be honored and respected by the hiring firm and recruiter. Companies and recruitment firms must also uphold no-poaching agreements that might be in place while scouring for potential recruits and employees to avoid being on the wrong side of the law. Organizations should also maintain uniformity in approach to hiring by defining a comprehensive recruitment policy and uphold strong, ethical hiring values including zero tolerance on data theft.

Employee poaching, if managed the right way, can benefit both parties – the poacher and the new employee- in the long run. For e.g., implementing an employee referral policy that seeks to bring in the best talent from across the market, instead of a targeted mass-poaching approach focusing on a competitor. Skilled and good workers often need new, exciting opportunities and seek recognition – all made possible by a new opportunity at another firm. From an employee perspective, poaching can give them a new lease of life, career wise. An infusion of fresh talent and a new perspective can break old habits and a complacent mindset in the hiring firm, pushing it ahead on the growth curve. Poaching also lets firms re-align their resourcing and share the burden of maintaining a highly skilled workforce – where growing firms acquire workers and stagnating firms can downsize easily without the burden of a lay-off to maintain their margins. Talent poach­ing, when done right, can boost knowledge transfer and sharing of best practices in an industry.