Aggressive Talent Poaching in Bathrooms and Parking Lots

Ever since the unsolicited offer by Microsoft to buy Yahoo, recruiters have been literally “circling” Yahoo in a manner that would have to be labeled as aggressive even by Silicon Valley standards. The tactics vary from the relatively tame practice of “cold calling” into Yahoo in order to find nervous employees to the more aggressive “trolling” by recruiters outside Yahoo’s parking lot and in local spots where Yahoo employees hang out.

Even though Microsoft hopes to gain a significant amount of Yahoo’s talent through acquisition, a number of groups at Microsoft are not waiting. Already on the Internet you can find copies of emails sent by Microsoft recruiters to known top talent at Yahoo, offering them an opportunity to explore a Microsoft career in this time of uncertainty. Those interested in reading one such email can check out this blog posting.

However, the most aggressive approach has to be a firm that has aggressively posted “we are hiring” posters in the entrance way and in the bathrooms of the building that they share with Yahoo’s famous San Francisco “Brickhouse” innovation site. I call it “bathroom recruiting” and by the way, I’ve heard that it has already yielded results. The firms that are actively attempting to poach talent away from Yahoo range from the very small startup Cake Financial to the recruiting machine Google, which recently successfully hired away a key Yahoo executive, Steve Souders, their Chief Performance Yahoo.

The Majority of Hires Are Poached

If “bathroom recruiting” shocks you, it’s only because most aggressive recruiting approaches are kept secret in order to maintain a firm’s competitive advantage. If you think that poaching (the direct targeting of current employees from another firm) is rare, you would be totally wrong. I estimate that nearly 75% of key hires in major firms are directly recruited away from other talent competitors, and that nearly 100% of CEOs (that are external hires) are poached.

Sometimes the person is lured away from their current firm not by a corporate recruiter but instead by an intermediary (a third-party recruiter or agency), but the net result is the same. One firm gains a new employee and another firm loses a current employee as a result of a recruiter paid directly or indirectly by the corporation. Even the practice of recruiting away individuals is being superseded by a more aggressive approach, known as “lift outs.” In a lift out, an entire team is poached all at once (Yahoo once lost an entire team to the software firm Nuance). Some firms now even keep score of their poaching activities. They calculate what I call their “giveaway/take away ratio,” which tells the firm whether they successfully recruit away more individuals from their competitors than competitors successfully poach away from them.

Poaching is Becoming a Global Phenomenon

Because of the almost continual poaching between giants like Microsoft, Google, and Yahoo, many individuals think that the United States is at the epicenter of worldwide poaching, but that wouldn’t be true. China, closely followed by India, would win the award hands down.

The widespread economic growth in China has made the demand for managers with experience working and managing in China stratospheric. In my many visits to China, I have learned about how firms literally “bid” for experienced managers with amounts of money that would double a manager’s present salary.

India is no slacker either in the fight for top talent. I once met a CEO in Bangalore who was willing to open a plant across the street from Nokia in Finland just to increase the likelihood of directly recruiting away their engineers.

In Europe, the mobile phone firm Vodafone recently poached one of Microsoft’s top executives to head up its new Internet services division. In Canada, EA once placed a billboard in the vicinity of a competitor in order to incite them to switch employers.

Since the late 1990s, U.S. firms that are perceived to be in trouble or those that are being threatened with a merger have been subject to aggressive “across the street” recruiting efforts. It happened to PeopleSoft right before the Oracle merger. One Chicago-area hospital recruiter confided in me that their hospital unabashedly placed a recruiting van with a large canvas sign outside of a competing hospital that was having labor trouble.

But Isn’t Poaching Illegal, Immoral, or a Cause of Global Warming?

Whenever anyone brings up the topic of poaching, there are invariably squeals from the timid or the un-informed claiming that it’s illegal, immoral, unfair, unethical, etc. It’s funny that much of the talk comes from third-party recruiters who get a majority of their recruits from among the actively employed population.

Even some corporate recruiting managers somehow think that it’s better (or less dirty) to “poach” employees from another company by using an intermediary, as if somehow using a third-party recruiter and poaching the talent circuitously is more ethical.

Such an argument is just silly. If you pay a recruiter (whether it’s someone on your payroll or a vendor) to entice someone to leave their current firm to go to your firm, you have poached an employee. Hiring someone else to do the deed indirectly still means that your firm has gained an employee and another firm has lost one.

Incidentally, poaching away employees is not illegal because employees are not “owned.” (Ownership by one human of another has been illegal since the Civil War). Today, nearly all states and all corporations embrace “at will” employment, meaning that at anytime, either party may sever the relationship with or without cause.

Poaching May Spur Competition

Some HR professionals or managers are reluctant to poach because they are afraid that other firms will retaliate. Unfortunately, if you act this way your fears are misguided and you are probably hurting your firm with your timid approach. Using this fear of retaliation logic, the products division of your firm wouldn’t offer new products that competed directly with a competitor’s product because that large competitor might retaliate and squash your firm’s new product! In the same light, your sales people wouldn’t compete head-to-head for the same customers out of fear of retaliation.

Competition is everywhere. Business people expect competition everywhere; only HR people see “ethical issues” that just are not raised in other business functions. I have difficulty understanding HR professionals who keep saying they want to be business partners. It seems that when they are given a chance to actually compete like a business-person, they fail to act like real “business people” do every day, and that is to compete in the marketplace.

Executives and senior managers actually enjoy competition. If you have the best jobs in the best recruiters, you really have nothing to fear because you’ll win more than you lose. It’s a recruiter’s job to provide their current team with the best possible talent, so it’s time to stop being a pacifist.

Recruiting great talent is always a fight (some call it the “war for talent” for good reason) and if you want the very best well-trained candidates, you really have no other option other than to poach from your competitors.

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The other option, hiring exclusively from “non-competitors,” invariably means hiring candidates without experience in your industry, candidates from outside the region with high relocation costs, or those candidates without any relevant experience. Hiring unemployed people with out-of-date training or individuals from other industries means extra costs to the firm because of their slow start up and their long learning curve.

Poaching objectors should also understand that, whether you like it or not, large competitors in any industry are continually targeting the employees of smaller firms and those in trouble. Large firms in every industry invariably look at smaller firms as their “farm teams,” so if no one is attempting to steal your employees, either you have a great blocking strategy or you may have some pretty undesirable employees! Any company that has good employees needs to constantly battle to keep them. It’s just part of business.

HR’s Dirty Little Secret

Refusing to poach may actually be illegal. One of HR’s dirty little secrets is that senior executives routinely make “pacts” where they agree not to poach each other’s employees. On the surface this might seem okay, but the reason these “gentlemen’s agreements” are always unwritten is because they probably violate the restraint of trade principle.

By agreeing not to compete, they are essentially hurting their current employees by restricting their freedom of movement. Under the U.S. Constitution and U.S. law, employees are free to leave and go to any employer that they wish. When a firm agrees not to hire a competitor’s current employees, essentially what the firm is doing is legally limiting the freedom of its current employees.

Some unscrupulous firms attempt to “scare” their current employees and further restrict their freedom of joining a competitor by forcing them to sign odious non-compete agreements which are almost always unenforceable unless significant trade secrets are involved. Because no one can successfully hire them away, the current employer has an increased opportunity to poorly treat and underpay these individuals. Yes, competition forces employers to treat their employees better. A lack of competition allows employees to be abused because they have few options within the same industry or city.

As an employee, you might think that you didn’t get an interview at a competing firm because of some weaknesses in your work experience. Unbeknownst to most, the real reason they get no response are these secret, hideous, under-the-table non-compete hiring agreements.

The Benefits of Hiring Away Your Competitor’s Talent

If you’re unsure about whether you should poach, consider the many benefits that come from taking the best employees away from another firm. First, because they are currently working, they’re probably well-trained, up-to-date, and above-average employees. When you hire individuals from another firm, you get with the employee an understanding of your competitors’ processes, tools, and approaches.

Effective poaching will probably also force the competitor to focus more of their efforts on employee retention, which will in turn limit resources available to any recruiting effort that they might undertake against you.

Final Thoughts

Despite the inevitable whining that comes whenever anyone suggests that poaching is a positive thing, it exists and is getting more aggressive. You can either bemoan the point or accept it as part of the ongoing, continuous war for talent.

If you find yourself battling for talent, maybe it’s time to realize that in a war, you have to use aggressive tactics in order to win. Instead of blaming other firms for your current employees choosing to go elsewhere, instead look in the mirror, and blame yourself for not providing them with a superior opportunity. If you consider poaching to be war-like, so be it.

If Google, Yahoo, and Microsoft can practice it out in the open on a regular basis, I would instead label it as a standard business practice in the 21st century world of global recruiting. Any of you who think poaching away talent from Yahoo when it’s down on its luck is poor form needs to realize that it is being targeted not just because it’s weak, but instead because its human resource function and its managers did a world-class job in attracting some of the most desirable talent on the planet.

You see, it is extraordinary success that draws poachers, not weakness!

Dr. John Sullivan, professor, author, corporate speaker, and advisor, is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high-business-impact talent management solutions.

He’s a prolific author with over 900 articles and 10 books covering all areas of talent management. He has written over a dozen white papers, conducted over 50 webinars, dozens of workshops, and he has been featured in over 35 videos. He is an engaging corporate speaker who has excited audiences at over 300 corporations/ organizations in 30 countries on all six continents. His ideas have appeared in every major business source including the Wall Street Journal, Fortune, BusinessWeek, Fast Company, CFO, Inc., NY Times, SmartMoney, USA Today, HBR, and the Financial Times. In addition, he writes for the WSJ Experts column. He has been interviewed on CNN and the CBS and ABC nightly news, NPR, as well many local TV and radio outlets. Fast Company called him the "Michael Jordan of Hiring," Staffing.org called him “the father of HR metrics,” and SHRM called him “One of the industry's most respected strategists." He was selected among HR’s “Top 10 Leading Thinkers” and he was ranked No. 8 among the top 25 online influencers in talent management. He served as the Chief Talent Officer of Agilent Technologies, the HP spinoff with 43,000 employees, and he was the CEO of the Business Development Center, a minority business consulting firm in Bakersfield, California. He is currently a Professor of Management at San Francisco State (1982 – present). His articles can be found all over the Internet and on his popular website www.drjohnsullivan.com and on staging.ere.net. He lives in Pacifica, California.

 

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11 Comments on “Aggressive Talent Poaching in Bathrooms and Parking Lots

  1. This is just good aggressive recruiting. Any negative term used to define it is just a way for the looser company to point a finger.

  2. Poaching? Are we talking slimy eggs or the illegal taking of plants and wildlife here?

    I don?t disagree with the overall message you?re trying to convey in your article, but I?m struggling with the semantics.

    If you look at the definition of the term ?poaching – ?- the subject has no will over it?s destiny. It?s poached. End of Story.

    In all of my years of recruiting ? I have never called into a company and taken a ?happy? employee from an awesome job against their will.

    I have however called into a company and spoken to an unhappy employee about a better career with one of my clients and given them the information and the opportunity to make the change themselves. THAT, is what we call good old fashioned recruiting ? not poaching.

  3. As I wistfully ponder Sully’s reminder that true recruiting is more than job boards, job ads, and TPRs, I’m reminded of pre-1776 ground war tactics when colorfully coated armies faced each other head-on, heads held high as they loaded their muskets, and upon seeing the whites of their opponents? eyes, fired away.

    It was the noble thing to do and it led to lots of dead nobles?

    George Washington noticed that early revolutionary soldiers, employing the same tactics, were easily cut down by native Indians who used guerilla strategies – weaving in and out of bushes and setting traps. So he adopted many of the tactics used by Native Americans and the rest is history.

    While some responding to this article will use a Merriam-Webster strategy to denigrate John?s message because he used the word ?poaching? (everything he describes is to me, nothing more than creative sourcing), I think of the people I meet using non-standard sourcing techniques. I think about how interesting these people are and how interested they are in hearing about potentially superior opportunities. Not a single one has ever declined to meet because they were ?offended? by how I came to meet them; why should they? Because I spoke to them in the bathroom? Because I walked into a deli frequented by the firm and handed the deli owner 10,000 ?specially imprinted? coffee cup protectors? Because I drove into a parking lot and had the temerity to roll down my window and say, ?Hi?? Ultimately, they may have been happy but it didn?t mean they couldn?t be happier.

    ?Poaching? is just another one of those things ? cost-per-hire also comes to mind – that scare traditional recruiters and HR people – traditionalists who hold tightly to what they know and fear letting go of their security blankets (even if they are tattered and threadbare). Successful talent acquisition requires regular paradigm shifts and the techniques described by John are merely drops in the bucket of things used by the very best in our profession.

  4. Steven,

    Not to pick a nit, but they did not line up because it was noble. They lined up because they had smooth bore weapons that were very inaccurate. The tactic was to use concentrated volleys of fire.

    George Washington did use harassment tactics as did a few other groups, but much of the Revolutionary War was fought using this conventional and sensible tactic.

    Again, not to pick a nit but many people think that tactic was about irrational ideas about manhood and bravery when it had a legitimate purpose and was quite effective until rifled weapons became more accessible.

    In this, the talent war as in any war, it is important to understand why a tactic us used. Tactics are highly contextual and driven by current, known conditions and what technology is available.

    In this article, it is implied that all sorts of clever, innovative techniques are being used, but really, these tactics are not new, just unique due to the proximity of some companies to Yahoo and widely known now because of the takeover bid. That is not even mentioning the unique tactics that are used in other parts of the world

    These tactics are not available or appropriate for most of us simply because most of us do not work in a building with a company like Yahoo.

    Still, it is important to remember that strategy is less dynamic and more abstract. The unique little tricks are all tactical, but the bulk of the article is actually trying to sell people on a strategy: hire from your competition.

  5. I like Sully’s article but disagree with the terms he uses. I understand that sometimes the word ‘Poach’ is used when going after a specific, known employee in another firm as an intermediary. I’ve been asked many times to do it and have no problem with the practice whatsoever, I’m just doing my job as a recruiter with my clients interest at heart. However the statement ‘If you think that poaching (the direct targeting of current employees from another firm) is rare, you would be totally wrong.’ seems to imply that good, old fashioned recruiting should be labled as such. Direct targeting of current employees from another firm is precisely what we do after all!! If I have a company that sells widgets I’m not likely to look for candidates in a chocolate factory now am I?? Not if I’m truly vested in my clients corporate vision and management initiatives I won’t!! Let’s keep the terminology straight at least. ‘Poaching’ really applies more to companies that directly go after a competitors employees…Recruiters do so as part of a wider search method and strategic plan of talent aquisition. We’re not ‘Poaching’ people, we’re offering them the opportunity to advance their careers, move closer to family, escape from the mediocrity that they’ve found themselves imprisoned in and many other things that they may not have accomplished without our help. I’m proud of what I do, and the candidates that I’ve helped over the years have enforced that. There’s nothing quite as gratifying as a thank you call or letter after some time on the job just to let you know what a positive impact you had on their lives, not to mention the contribution you’ve made to your clients overall success. Poaching??….I think not.

  6. David, you referred to ‘unique tactics that are used in other parts of the world’. Sounds fascinating. Can you elaborate? Please. ~Maureen

  7. David-

    There’s really no way of knowing whether use of conventional and sensible tactics prolonged the Revolutionary War but ‘other’ scholars also believed that George and others were quite innovative in their use of non-conventional tactics.

    Specific tactics are also used because ‘that’s what everyone else uses.’ Why change if something ‘works’?

    John does not identify the tactics noted in the article to draw attention to the specific tactics; his purpose is to draw attention to the fact that most in recruiting use the same tactics as everyone else. Egads! What if recruiters were to try something new?

    The question then is why don’t recruiters try something different when recruiting from their competitors?

  8. Steven, you said:

    ‘The question then is why don’t recruiters try something different when recruiting from their competitors?’

    .

    I think if all someone takes away is that they should try something new, they are missing the point of the article.

    Numerous tactics are described and obviously we are encourages to think creatively but creative thinkers rarely need to be told.

    Trying something new is not inherently useful. There is a reason that the common tactics are used – properly applied, they are effective. Innovation can help, but until someone has a solid grasp of the fundamentals and knows how to execute the standard methods, I would have a low degree of trust in their ability to invent consistently develop effective new methods.

    I believe the first part of the article is used to show that ‘poaching’ is used around the world, in many industries and cultures and that the mechanics of it can vary greatly.

    The second half of the article makes the argument for ‘poaching’ and goes on to give several reasons why this behavior is ethical and necessary.

    Maureen,

    He describes bidding on managers in China, Placing recruiting billboards near competitors in Canada and a few other things. None of them are particularly mind blowing, just things you don’t hear of often.

    Tara:

    ‘If you look at the definition of the term ?poaching – ?- the subject has no will over it?s destiny. It?s poached. End of Story.’

    I think you are looking at the concept of poaching from the wrong end. In terms of hunting, I seriously doubt the prey feels better about being hunted by a licensed hunter, in season and with a socially accepted weapon than it does about being ‘poached’.

    Poaching is not about the prey, it is about competing for resources. When you call into a company, you are, metaphorically ‘hunting’ resources on another grounds. That the ‘prey’ may actually be happy to talk to you does not make it any less of a loss to their employer.

    Not everyone likes the term ‘headhunter’. Some consider it an insult, others a badge of honor but I think everyone sees the metaphor. I think I would be in serious trouble if I were to conduct a search, identify the best candidate and then promptly present my client with only their head.

  9. Chubby Checkers sang, ‘C’mon baby, let’s do the twist!’

    David, ‘Trying something new is not inherently useful.’ Thanks for pointing out something so obvious; I doubt very much if anyone reading this article and its comments would come away thinking, ‘Oh Joy, all I have do do is try something new and I’ll be a better recruiter!’

    Debating over words and meanings aside – a special skill of some past and present members of our community, it pays to read Sully’s words and ponder the significance of his suggestions as they relate to how you recruit. Some of his ideas will resonate positively, others negatively. If you’re getting results you probably won’t change a thing; if you’re stagnating, there may be gems in the rough here that work for you.

  10. I really like your comments about how not hiring someone from a specific company might actually be against the law, not to mention the problems that would cause if talented people truly were unable to move to other good companies because of such “glass ceilings”… or doors… put in place by such gentlemen’s agreements

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