/training/articles/Thou-Shalt-Not-Poach-Competitors-Talent.aspx
Request a Catalog.
Share

Thou Shalt Not Poach Competitors' Talent…or Maybe Thou Shalt!

Are corporate recruiters reinventing the rules that govern their work when it comes to sourcing talent? Internal recruiting functions may be headed in that direction, suggest results of i4cp's new study on competitive recruiting practices. The figures show some companies are putting aggressive sourcing methods to work.

Traditionally, internal corporate recruiters have abided by what used to be called a "gentlemen's agreement." Actively seeking to poach top talent from competitors just wasn't done. At least it wasn't done overtly or regularly in most industries. But respondents to our study might be signaling the arrival of a new day in the quest for the best candidates and a new stage in the war for talent.

Such aggressive approaches could be the result of mediocre success among many internal recruiters. Our study shows that the largest percentage of respondents (53%) rated their firms only about average in recruitment effectiveness. A third claimed better-than-average results, but just 5% called their recruiting effectiveness "excellent."

Respondents who rely on their own internal recruiting functions to source talent agree that applying the kinds of assertive techniques that external search firms, or headhunters, sometimes use could help them improve their results. Nearly three-quarters say that, to a high or very high extent, headhunting methods increase recruitment effectiveness in certain areas. Almost as many respondents credit the techniques with helping target strategic talent. Other potential benefits include cost savings, faster recruiting results and even the ability to "send a signal" to competitors.

Doing what the headhunters do
One in four study respondents said that, to a high or very high extent, they advertise in local markets or regions of competitors. Also to a high or very high extent, 20% acknowledge that they actively source competitors' employees in key and/or skilled positions, and 10% say they contact competitors' employees directly.

Some organizations say that direct contact of competitors' staff is their means of seeking out passive candidates—individuals currently employed but who might be open to a job switch if an offer came their way. Jaime Elving, Project Manager of Executive Recruiting & Onboarding for Institute for Corporate Productivity's member company PNC Financial Services, confirms her organization's use of personal contacts with employees of other firms. "Passive candidates are some of the people we're most interested in talking with," she says. "Even if the person our recruiters speak with isn't an actual candidate, he or she may be able to give us names of colleagues or friends who are interested." PNC also advertises extensively in local markets, achieving the dual goals of reinforcing its employment brand while also communicating its business brand.

Cindy Akins, Vice President of Human Resources for marketing research firm Millward Brown, observes that the economic downturn has made some employees particularly amenable to contact from competitors. "Companies have downsized, but they've held onto their best people. However, I think there's a feeling that those employees aren't necessarily that happy. So if you can reach in and get a couple of good people from your competitor, the industry knowledge is already there, and you may be getting someone who has client relationships and other attractive attributes. I think the feeling of dissatisfaction that a lot of employees have right now makes them more inclined to jump if they're contacted." She adds that "unfortunately that happens with our employees as well. We haven't lost many people, but we're worried about the situation in 2010." In fact, another recent Institute study found many employers are already taking action to prevent increases in employee departures as the economy gains traction.

Things may get even more aggressive in the future as the economy turns around. "We plan to use these techniques much more," said 16% of respondents to i4cp's study. Twenty percent said they intend trying the approach either for limited regions or positions. Another 22% said they were discussing it, while 20% said they didn't know. That left fewer than a quarter of participants denying they'd use headhunting methods more in the future.

Some respondents express reservations about assertive recruiting tactics, fearing that they might trigger a bidding war for talent or incite competitors to "drop the gloves" and target their talent. Few expressed concern about the use of such techniques being seen as "bad form" for internal recruiters, although our research suggests that in Europe—at least in Germany—the question of ethics keeps some firms from taking action. The former head of recruitment for the Europe/Middle East/Africa region of a major business software firm noted that the "gentlemen's agreement" sensibility is still strong there. "We don't do outreach to our competitors' employees," he says, "but we do accept applications from them."

Making the most of methods used
While the study primarily concerned itself with the activities of internal recruitment functions, it also asked about external search firms and the use of social media for applicant sourcing. About two-thirds of respondents said they used outside recruiters "once in a while for certain key positions." Most often, companies turned to headhunters for help finding talent to fill senior leadership positions. And larger companies were more likely to take that route than were smaller firms. Gruppo Campari, a leader in the branded beverage industry, uses headhunters to help locate talent for specific roles across their Italian operations. "Usually high-level management or other specialized positions," explains Valérie Nizard, HR Global Product Supply Chain & Group Functions, who coordinates outside search-firm usage. She ensures optimal results for Gruppo Campari by performing a quick analysis when a requisition is made. "We do a quick assessment of a number of things," Nizard says. "Obviously, how much it would cost to use an outside firm, but also how easy we think it's going to be to fill it by doing the search ourselves. Based on that assessment, we decide which method will be preferable."

Relatively few companies say they're using social media to a large extent for recruiting purposes. But, among those that do, LinkedIn seems to be a tool of choice. "Once we've found people on LinkedIn who seem to be viable prospects, we contact them," says Millward Brown's Akins. "That enables us to avoid time-consuming cold calling." Although her company doesn't actively contact competitors' people, Gruppo Campari's Nizard says that her recruiters do call "when we want to seek applicants from another industry—the fast-moving consumer goods field, for example. In that case, we will check profiles on LinkedIn. If we find someone we're interested in, we will contact them directly to see if they're interested in pursuing anything further."

Institute for Corpoates Four-Part Recommendation:
1. Carefully weigh the benefits of using your internal recruiting function versus seeking talent through external search firms when vacancies arise. Gruppo Campari's use of a quick assessment to weigh costs and benefits drives strong decision-making about recruitment.
2. Consider using multiple methods of sourcing candidates in order to meet varied talent needs in your organization. "For a few select and very hard to find roles, we might still contact an outside firm," says Jaime Elving of PNC, "though as much as possible, we're relying on our own efforts now."
3. Evaluate social media, such as LinkedIn, as a support tool for more assertive types of outreach. Companies can look for likely candidates in such venues before they reach out, increasing their likelihood of finding candidates who not only possess the qualifications desired but who also are apt to fit well and succeed within the organizational culture.
4. Don't forget to measure your results, and make adjustments to your recruiting programs if needed. Go beyond metrics that simply reflect recruiting activity and look at the quality of the hires you're making. Are people fitting in? Becoming engaged, high-performers? Are they staying? If your answers are "yes," chances are that you're making good calls when it comes to your recruitment outreach.

Access the complete Institute for Corporate Productivity's study.

About the Author(s)

Carol Morrison, Institute for Corporate Productivity (i4cp) Carol Morrison is with the Institute for Corporate Productivity. For more information, visit www.i4cp.com