How to Poach an Employee from a Competitor

It’s natural to look at a rival’s staff and wonder who could help your business. Here’s how to lure a star employee to work for you.

Hiring an employee from a rival firm can mean bringing on someone who already knows your industry, your business, and can bring valuable new knowledge and even clients to you.

Little wonder that recruiters are often asked to bring home that particular prize.

“Companies are so focused on getting someone from the competition,” says Mike Sweeney, Principal of MAS Recruiting in Cherry Hill, NJ. “As soon as they see the resume, their eyes light up.”

Still, as enticing as it is, hiring from the competition requires caution and a certain degree of finesse, especially for a small-business owner. The process is loaded with pitfalls: you don’t want to get a reputation as a poacher, start a tit-for-tat talent war with a competitor or, worst of all, get sued for breaching a non-compete agreement.

So, before wading in to dangerous waters, here are some things to consider when you’re tempted to look to the competition for your next employee of the month.

Take the subtle approach
If you can afford it, hiring a search firm to find candidates can help keep you at an arm’s length from the potentially distasteful business of poaching.

A good search firm uses a polished, subtle approach. They’ll talk with potential candidates about “an opportunity” in vague terms, until they can gauge interest.

If your budget bars hiring a search firm, it’s best to copy the approach, says Brenda Snyder, chief operations officer at The Human Resource Group, a boutique search firm in Denver. She suggests using your professional network to spread the word that you’re hiring, and approaching the candidate you’re interested in on neutral ground, like a Chamber of Commerce meeting or conference. If you’re too aggressive, Snyder warns, you risk scaring away potential partners and/or suppliers.

“In the small business world, you don’t want to blow out your personal relationships,” Snyder says. “If you know that there’s a person you want at another firm, and if you don’t have a relationship with that firm, you can go for it. But if it’s a small industry, a small market, with small niche players, be very conscious of the consequences of that action. Think it through, like any good business leader would.”

Look before you leap
Perhaps the most important thing to think through is whether the candidate you’re eyeing is really worth the trouble. You don’t want to get stuck with someone else’s headache, says Martin Kartin, principal of boutique search firm Martin Kartin and Company in New York.

“You want to make sure you’re recruiting talent, as opposed to recruiting a resume,” Kartin says. “The biggest mistake small companies make is to look at the resume in terms of what the person says he has done, and what company the person has been with, and they automatically say ‘Oh, that’s great.’

“Even if they have the right job with the company, it doesn’t mean that they are a qualified candidate,” he warns.

To avoid the problem, do thorough reference checks, and really study the candidate’s background, to get a sense of what’s driving them, suggests Chris Von Der Ahe, a senior client partner at Korn/Ferry International in Los Angeles. You also need to assess whether the person will be a good fit at your firm, Von Der Ahe added. “Just because they work for a competitor, doesn’t mean they’ll fit into the culture.”

Culture differences can include large firm vs. small firm differences, and can also be as simple as geography. If the candidate you want is across the country, for example, and he or she has no ties to your area, it may be difficult for them to get acclimated.

For this reason, it’s often a smart move to take seriously the local people who come to you with their resumes, eager to join your firm, even if they don’t have the exact experience you’re looking for, says Mike Sweeney of MAS Recruiting.

“I tell companies you’re a lot better off getting someone who has a burning desire to come work at your company, for whatever reason, especially if they’re local,” Sweeney says. “They might not have all the bells and whistles that you want, but if they live local, and they have a real desire to work at your company, some months down the road, you’ll have struck gold.”

Watch for legal troubles
If it turns out that the candidate you’ve been eyeing at a competitor is as good as you hoped, and you want to begin talking with them more seriously about joining your firm, a critical step is to find out whether they have a non-compete agreement with their current employer. If they do, and they jump ship to join your firm, depending on the state in which you’re based, you may be in for a great deal of trouble, including a lawsuit in some cases. Some states take non-compete agreements very seriously. An employment lawyer can advise you on how best to proceed.

Keep in mind that talking with a candidate who is bound by a non-compete agreement is definitely a matter of weighing the risks and rewards, according to Mike Travis, principal of Travis & Company, in Newton Center, Massachusetts. “It’s very easy to run afoul of a non-compete, and it’s very expensive to fix your mistake,” he says.

Sell your story
If, after all the reference-checking, soul-searching, and risk-reward analysis, the candidate from a rival firm still looks as good as you imagined, don’t forget that you need to sell them on what you and your company have to offer. After all, why should they leave their job and join you? You need to make your opportunity sound more attractive than what they've already got. And remember, it’s not just about money. Most people are motivated by things they weren’t offered at their previous job: recognition, opportunity, and more innovation and excitement.

So, inspire that person to leave their job not just with a generous offer, but with everything they will be able to do and achieve at your company.

Recruiters know the drill. “We can’t lure people from point A to point B without a compelling story,” says Snyder of Human Resource Group. “Typically it’s not money. It’s always about the opportunity, the industry, or about the leadership.”

Watch your back
Finally, recognize that your competitors might be playing the same game you are. When spending the requisite time analyzing your staff and looking for gaps, don’t forget that you need to treat your best employees very well, so that when they receive a call from a recruiter, or are approached by a rival CEO, the only answer they’ll feel obliged to give is a firm “Thanks, but no thanks.”

“Know who your stars are, and make sure they’re well taken care of, and well paid,” said Sweeney at MAS Recruiting.

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