Poached Jobs: Is Poaching Employees Ethical?

Jake Michaels
September 23, 2020
9:00 am

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It’s no secret that one notorious practice by large corporations against their rivals is poaching employees.

Poached jobs, or job poaching, is when one company offers a position to a person in a rival company in the hopes of taking their value and adding it to their own. For companies, poaching employees are a great investment as it allows them to manage their finances in such a way that they can maximize the amount of profit they can make thanks to the new talent they’ve poached.

Poaching jobs is usually prevalent in growing industries, where companies are trying to get one leg over their competitors by stealing high-value employees with in-demand or technical skills. Here, we talk about poached jobs, why it happens, and how companies mitigate the negative effects.

What Is Job Poaching?

Job poaching is the willful, intentional, and sometimes aggressive, practice of one company hiring a person from a rival company. In some cases, entire groups or departments in one company will be offered positions in a different company just so the hiring company can benefit from their skills.

Usually, it’s done by the poaching company to bolster their own workforce, but it can also be done to deprive their competitor with talented employees, creating a soft monopoly of skilled workers. Poached jobs in Portland or poached jobs in San Francisco are fairly common, considering that these cities have a high demand for employees with highly technical skills.

Poached Jobs: How Does It Work?

Poaching jobs are common in highly technical, often technology-based, industries where employees need to have functional and in-demand skills like software programming, data analysis, programming, and the like. Employees who have mastered the different skills of an entrepreneur, or of highly specialized professions, are usually prized by their industry, being sought after by different companies and even offered positions even though they’ve already been hired.

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In fact, some recruiters are even given incentives if they’re able to poach a job from a rival company.

Usually, a rival company will take stock of some of the most talented people in their industry. They will then assess if they can afford the services of that employee. If they can, they will offer the person a chance to work for them, usually for higher compensation, better benefits, or other incentives that the employee’s current employers might not be offering.

If that employee takes the offer, they’ve officially been ‘poached’. Poaching jobs allows both big businesses and small businesses to manage their finances in such a way that they can maximize their profit via ‘star’ employees that bring in fresh ideas.

Unlike in older industries, the modern business world actually looks favorably on employees who ‘job hop’ between companies, so long as they can prove they’ve learned certain skillsets or were able to accomplish a major career milestone. This often means that the employee can ask for better wages and can even demand certain incentives.

An employee with a history of being poached from jobs is also a good indicator that that employee has skillsets that everyone is vying after. For employers, this means they have to be prepared to shell out a higher-than-average salary for that employee if they want them to join their workforce. It’s a great business improvement that pays off, both for employees and employers.

Of course, this also comes with its own risks: an employee with a long history of poached jobs might also be seen with suspicion. After all, many companies want to foster a culture of loyalty within their ranks, and a person who is known for jumping from one job to another proves the opposite of that. It’s also not a good sign if that employee, despite being poached from one job to the next, hasn’t learned any new or valuable skills throughout their journey.

No-Poaching Agreements Between Companies

Job poaching isn’t illegal, but it does foster often-unnecessarily bitter rivalries between companies that could cost them more money in the long run. Because of this, many rival companies in different industries enter ‘no-poaching’ agreements with one another, agreeing not to poach each other’s employees while that employee is on a particular company’s payroll.

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While these agreements might be great for companies, it’s not so great for employees. No-poaching agreements eliminate the competitive market, which means employees won’t be able to negotiate for higher wages because no one in their industry will be offering them, nor will they be able to pursue other opportunities with companies in the no-poaching agreement.

While technically not illegal, no-poaching agreements are frowned upon by the U.S. government, seeing them as a violation of anti-trust laws and flouting various labor codes and union practices.

Often, the Federal government has had to step in to fight for workers affected by companies who’ve instituted no-poaching agreements with others in their industry, often issuing guidance warnings against HR professionals who might be tempted to enforce no-poaching agreements.

At the end of the day, while the name does evoke ideas of piracy, hunting, and other negative images, poached jobs are actually a good way to keep the industry competitive. It allows employees to pursue better opportunities for them to learn skills and increase their earnings while forcing companies to create better working environments and instill a sense of loyalty in their employees.

Poached Jobs: An Alternative Solution

No-poaching agreements are slowly becoming illegal in most industries across the country, but for the most part, many companies are starting to adjust. Instead of no-poaching agreements, companies will often make their employees sign non-compete agreements with their employees.

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Non-compete agreements often called a non-compete clause or NCC, is specific wording in an employment contract that bars employees from ‘competing’ with their employer should they be terminated from the company. This usually means that the employee will not be allowed to seek job postings in companies within the same field, as this means they’re ‘competing’ with their previous employer.

In theory, non-compete agreements are set in place to prevent employees from taking proprietary tech, practices, and other trade secrets to the competition, or to take those trade secrets and set up their own shop.

To balance this out, non-compete agreements or NCC’s are not allowed to bar ex-employees from competing indefinitely; often, most non-compete agreements only cover a short period of time, anywhere between a few months to a year. This allows employees to continue working in their field or profession without having to fear legal repercussions.

But perhaps the best way to prevent poached jobs? Companies need to re-evaluate how they treat their employees or if they’re compensating them well enough.

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