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3 Ways to (Legally) Stop Your Competitors from Poaching Your Employees

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3 Ways to (Legally) Stop Your Competitors from Poaching Your Employees

By Caron_Beesley, Contributor
Published: November 23, 2011 Updated: March 2, 2012

Businesses lose employees all the time, but if another firm has ever targeted or hired your employees then you have suffered from employee poaching or “employee raiding.”

Employee poaching is a fact of life for small business owners, particularly in high growth, specialized, and technology industries. In fact you can even do a quick search online and find blogs that will even coach businesses on how to poach employees!

And it’s about to get worse, according to Alison Doyle, writing for About.com: “More than half (54%) of hiring managers and recruiters anticipate that tech talent poaching will get more aggressive this year.”

So what can small businesses do to deal with this pesky hiring tactic? This post explores the legal options for preventing and addressing the poaching of employees by competitors, as well as other potentially more fruitful management techniques.

What About Non-Competes?

Non-compete clauses or agreements are a contract between your employees and you in which your employee agrees not to go work for your competition, solicit business from current clients, or compete with your business for a certain period of time after leaving your company.

The trouble with non-compete agreements is that they rarely hold up in court (for example, California and Texas consistently refuse to uphold non-compete agreements). Furthermore, the litigation involved can get costly for a small business owner.

Another problem with non-competes is that they make it harder to attract the right talent in the first place. After all who wants to compromise their future career path in a chosen industry by getting trapped into a non-compete agreement with their employer?

If you still feel you need the protection of a non-compete, check your state laws to see whether they typically support employers or employees in non-compete lawsuits (Massachusetts is an example of a state that does enforce these agreements). Then consider rolling them out only to managers or key employees. You should also make your non-compete policy clear – include it in your employee handbook and even on the careers page of your website so that your competition can see it too.

Lastly, always seek the professional advice of a lawyer before establishing and enforcing a non-compete agreement. For more information, read: How and When to Use Non-Compete Agreements Appropriately.

Prevent Temptation by Nurturing and Incentivizing Your Valued Employees

Non-competes aside, there are many other ways to more effectively prevent employee poaching.

All companies have valued employees – those they can’t afford to lose because of their skill, experience and commitment to their work. One way you can help them resist the temptation to stray is to show that you are invested in their future. Give them management time, discuss their professional goals, and share your vision for the continued growth of your business and their role in it.

Long-term incentive plans tied to the overall success of the business, not just individual performance, can also send a clear message to your employees that they have a recognized and valuable role to play in your business as a whole.

The following articles have tips on how to recognize, nurture and incentivize employees:

Be the Kind of Boss They Want to Work For

Apart from money and other temptations, one of the big motivations for changing jobs is to get away from the boss. This is a tough one to acknowledge, especially in today’s job market. It can be hard to imagine that your employees might want to leave you because they can’t tolerate your management style.

But the fact remains, your employees are critical to your success. This means, as an employer you need to earn the loyalty of your employees ­– no matter how thankful you think they should be that they have a job – and by being a good leader.

With strong leadership, your business and its employees will become more agile and resilient to change. Without it, employees quickly become disgruntled, lose interest, and quietly plan their exit. These resources provide a variety of tips and tools to help you become a better boss!

Additional Resources

About the Author:

Caron Beesley

Contributor

Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley

Comments:

Those methods won't work in a real life. If you are a small business owner, some competitor with a bigger business will simply offer more money for your employees and that's all.

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