Poaching- Implications and Alternatives

Published by MBA Skool Team, Published on February 20, 2015

According to the age old adage that says, everything is fair in love and war, wars have always been the order of the day. Since time immemorial, humanity and its various factions and stratifications have been at war with one another. It was out in open earlier, and the only difference now is that it is fought with an ethical veil over it. The effects of the same war have found its own place in the corporate field too. The strive to be at the leading edge of the Industry, to give a head-start to industry peers and retain the momentum and to have a sustained name and reputation among the customers and stakeholders are some important points that make up most of parts of the boardroom discussions in contemporary times. Everything finally boils down to one very basic point: the kind of employee base a firm has got. Better the employee base, more the confidence with which the firms can take strides in the future.

How do firms ensure that they are among the best in the industry in terms of employee pool? After all ‘best’ is superlative, and hence not all can have that feat. One always has options of opening up new opportunities with attractive incentives to draw the industry-best employees towards one’s firm. Some firms also take up the route of aggressive hiring in terms of picking up the best employees in the market. This ensures a healthy competition between firms, and an ecosystem where the workmen would strive to be among the best and be counted.

But then there is a line, a very thin line that separates aggressive hiring from persuasive hiring of employees who not very much are willing to leave their current firms. Such scenarios need to be judged for how ethical they are in today’s competitive world. The ethical side of this line extends from enhancing the skills of one’s own employee base through various internal programs to aggressive hiring; and the other side of it: let us have a look on what the other side looks like.


Enter Poaching

Persuading skilled and able employees from other organizations to leave their current employers, and hiring those giving perk and other incentives is collectively what the other side of the line is; and this is what is exactly called as poaching.

Poaching in the corporate world today is being disguised as an extension of the concept of talent retention. The implications of poaching can anyways be far reaching. Any firm should stick to the ethical recruitment policies laid down in its principals, than resort to poaching. This would ensure a healthy competition between the industry rivals, and would foster an atmosphere where employees across organizations would be collectively feel encouraged to raise themselves to different levels of perfection using the best resources available at hand.

Introspective Talent Retention: An Alternative

It is absolutely necessary to have a sound employee base, but the path that a firm takes to this end does matter. There are alternatives and work-around of poaching, but before delving into that, let’s have a look on the three kinds of employees that exist in any organization:

Figure: Showing the three different types of employees in any organization.

Poaching from an organizational perspective aims at handpicking the employees who fall in the ‘Engaged’ category of other organizations, by offering them incentives and hiring them through persuasive means, even when they are not as much willing for the change. Ignoring the question of whether this practice is ethical or not, this does increase the employee base that falls in the first category. But then all that money spent in this hiring could also have been spent in some other way to enrich the knowledge base and skills of the current pool of employees.

Here is where the alternative approach chips in. They have a lot of employees the second and third category. Why can the money not be spent on the employees falling into these sections, and making them more engaged by helping them develop their technical and interpersonal skills and help them channel their efforts towards organizational goals; This would also instill a sense of conscience in the employees, to serve their firms better, and would help the corporate society get away with the negative side of poaching.

Current Trends in Talent Traffic and Poaching

Let us have a quick look on the talent traffic that has meshed around some of the giant firms of today. These firms, shown in the figure below, are on a hiring spree from among each other. Clearly, according to the figure, Facebook can be seen to be winning the war of this talent hunt, as it has only 5employees leaving the organization to join those shown in the figure, compared to around 70 employees that are leaving these organizations to join it. Such aggressive hiring did give way to poaching between these giant firms that resulted in an antitrust lawsuit which was later settled in the district court of California.

The data presented below is not the only story in the corporate world; it is rather a representative picture of what is happening across industries as a whole.

Source: TopProspect Reports

Quick Bytes: the Pune IT Park’s No-Poach Agreement

In one of the amazing moves of its kind, some of the giant IT firms operating out of an IT park in Pune’s Hinjewadi area, signed a ‘peace-pact’ with each other to reduce poaching aimed at bringing down the levels of attrition. It had been a common practice among all these giant IT firms, that constitute almost a $50 Billion IT industry, to poach talent from each other’s firms.

The pact was however not found that viable, and therefore was modified to emphasize that the employees leaving any of these organizations to join another, would not be forced to leave and join the other without completing their full notice periods. This would give sufficient time for the organization losing the employee, to find a suitable replacement. The pact was signed and pledged to be included in the code of ethics of all participating organizations, and to be honored by the HR departments of each.

Nevertheless, such scenarios that make talented and well-known employees vulnerable to poaching would always exist. One of the main objectives of the organizations should be to come up with ways to reduce employee poaching from their organizations, and also to hire employees from other firms in an ethical fashion. Let us have a close look at how these goals can be achieved.

Making Employees Poach Resistant and Ethical Hiring

Making employees poach resistant is not only about offering higher salaries to make the jobs lucrative for them. Great candidates seek great opportunities, leadership roles, and a sense of excitement about getting a new opportunity. Of course, the fact that money is an important factor to keep employees motivated does stand true. But it is just an important factor, not the only factor. These points should be taken care of while strategizing towards employee retention.

When it comes to hiring, we should focus on ethical hiring. Again good employees cannot only be hired on the basis of money. Money is something that any organization can offer to employees who are contributing well to the organization. Hiring ethically should be aimed at offering prospective candidates something that the candidates missed at the earlier company and to compensate for the same.


Source: A survey from Challenger, Gray & Christmas

The figure above depicts what perks are most effective in retaining the top talents of any organization. A positive approach towards such initiative would ensure that the lateral hiring of new candidates remains ethical and fosters a competitive environment across the market.


Poaching should be avoided comprehensively by organizations operating across any industry. Not only it raises question upon the integrity of employees when money is weighed against loyalty to their firm, it also kills healthy competition in the market by rendering a competitor’s organizations weak and less effective. An organization should make sure that it is using ethical standards in line with its own policies when it comes to recruitment and hiring.

The healthy competition that an organization has with its competitors also ensures a healthy respect between the organizations. Poaching, on the other hand, keeps you at the risk of losing the respect of your competitors, a scenario that would not be beneficial in anyways in the long run.

It is therefore always a better approach to develop the knowledge and skill base of the talent pool already present in an organization, and to use ethical approaches towards lateral hiring.

This article has been authored by Noha Sinha from XIMB and Satyarth Udayan, Business Analyst from Metric Stream


1. https://www.sba.gov/blogs/3-ways-legally-stop-your-competitors-poaching-your-employees

2. http://articles.economictimes.indiatimes.com/2010-07-15/news/27584214_1_notice-period-attrition-pune

3. http://www.theverge.com/2015/1/13/7542371/apple-google-intel-adobe-settlement-poaching-lawsuit

4. http://cir.ca/news/silicon-valley-antipoaching-scandal

5. http://www.inc.com/magazine/201405/elaine-pofeldt/how-to-poach-employees.html

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