• How-to

For a startup, talent and domain expertise are often the most important resources. Finding someone who can fit into the startup culture and help take the venture to the next level can be quite a boon. This implies that the new hire comes equipped with experience and exposure to a certain extent. The easiest place to find a person who fits this bill would be your competitor’s premises.

Your competitor’s star performer is passionate about your industry, knows the growth drivers and challenges that lie ahead, and could actually bring to the table previously overlooked insights about the market. Seems like a dream come true, doesn’t it? Hold on. Take a step back. Hiring your competitor’s employee actually means you are poaching people and poaching is not always a smooth process. We tell you how to go about this delicate and sensitive issue.

1. Assess your need. What is your hiring need? What is the background and experience you are looking for? If you have your eyes set on a certain individual in a rival organization, does he/she best meet your requirements? What are your alternatives to hiring that person? You must sit back and answer these and a horde of other questions. Hiring talent from a competitor is never a simple process. Before you take a step forward and various complications unfold, you need to be sure of what you are doing. Would it be easier to just hire someone from a different background and train them on the job? Would that be more cost-effective too? Get your basics right before you take the big step.

2. Approach on neutral ground. After all the deliberation, if you are sure you want to approach a particular candidate from a competitor firm and talk to them about the opportunity in your firm, do so on neutral grounds. What we mean here is that you certainly can’t walk into your competitor’s office and talk to his/her employees.

The right way to do so would be to approach the candidate you have in mind at an industry conference or seminar where there is good scope for networking and exchanging notes on what is happening at each firm. By doing this, you will get a chance to understand if the candidate is interested in moving, what are his/her career expectations, what image does he/she hold of your company, what is his/her persona like and finally, what would be the best way to make an offer to the person.

Another way of going about this process is to get a headhunter or placement agency involved. That way you can stay away from the scene till you know that there is a possibility of things working out. The headhunter can measure the potential employee’s interest level and be the communicating agent till you decide to take things into your own hands.

3. Check the legal terms. Most organizations make their employees enter into a non-compete agreement when they sign their employment contract. This could be an impediment for you if you are looking at hiring your competitor’s star performer or any other employee from a rival firm. What we mean is that a non-compete agreement doesn’t allow such an employee to join a competing firm or start a competing business till the lapse of a certain period after termination of employment. Such non-compete agreements are legally binding and can drag you to court for trials that may drain both your time and money.

If you are sure of hiring your competitor’s employee, and everything else falls into place except for the legal terms that may be stopping you, the best thing to do is to seek professional advice from a lawyer or engage the services of a corporate law firm. They would be the best people to guide you in this matter.

It would also be helpful to ask the candidate to secure a No Objection Certificate (NOC) or formal relieving letter from the competitor firm. There could also be issues of IPR that may have to be sorted out.

4. Offer a fair deal. When you finally sit down across the table and talk to the potential employee, tell him/her everything you have to share about your company. It is not always the money that lures people toward newer jobs. It is more often the opportunity to experiment, try something new, innovate, handle more responsibilities, lead a team, etc that attracts people. The candidate’s personality has to gel with the culture of your company. Often, two rival firms targeting the same market and offering similar products/services function in totally different ways. An employee moving from one to another should be aware of this change and prepared to embrace the same. Also, if you are going to ask the employee to open up the competitor’s trade secrets, it could be the start of a dirty game. Remember, you are hiring the candidate for his talent, knowledge and experience, not for stealing trade secrets of the other firm. Such an act could be legally punishable too.

5. Evaluate your position in the industry. Hiring your rival’s employee may seem like a wise decision for the growth of your company. However, it comes packed with its fair share of risks and rewards. If you are a small player in a niche market, it could spark off a talent war whether you like it or not.

Think of all possible repercussions before you take the final leap. There have been instances in many Indian industry verticals where repeated poaching has led to the cost of talent shooting up by two or three times. Is that the way you want to go? You could be setting an example in your industry, so be careful and put your thinking cap on before knocking on the doors of your competitor’s top performer.

©Entrepreneur April 2011

Tags:
competitor, employee, poach, rival