Between 2005 and 2007, six leading high-tech companies in Silicon Valley signed "non-solicitation agreements" to stop one another's recruiters from cold-calling their employees with job offers. And in 2012, they settled with the Justice Department, which saw those moves as anticompetitive. Since then, there's little sign that Silicon Valley has warmed up to talent poaching by competitors. That's a pity, at least as I see it, and here's why.
Talent poaching can be a net positive if it's practiced at a wide enough scale, breeding a more innovative workforce. That effect is mostly unrecognized, of course, because of the immediate frustration felt by the poachees—the companies who’ve had their talent lured away by competitors.
Not only is skilled talent hard to come by in the first place, but it also risks companies' best ideas being shared with their competitors. They also lose some of the investment in recruiting and training a poached employee, not to mention how tighter labor market competition drives up wages. Many companies even put in place aggressive anti-poaching mechanisms, like secret hiring agreements, to prevent their top talent from being lured away.
But for the majority of companies, poaching employees is a simple necessity for staying competitive in a fast-changing tech market. Companies can’t afford fear of approaching the most influential professionals in their fields and selling them on jumping ship. For every top-shelf worker who's lost to a competitor's recruiter, there's something gained—even if it's harder to measure in the near-term.
Talent poaching creates a dynamic very similar to the rules governing Keiretsu—the traditional Japanese business model where strong corporate links between member companies allows top-level talent to flow between them. This flow of talent is meant to help employees build skills and acumen, and its effects aren't that dissimilar from those of talent poaching. Keiretsu practitioners saw this fluidity favorably, more akin to "talent sharing."
The reason why is simple. As talent flows between companies, employers essentially share the burden of training employees, and employees get more skilled with each jump they make. Sure, they'll pick up "nontransferrable" knowledge about one company's processes that have nothing to do with another's, but that doesn't go to waste, either. After working in a range of different environments, employees can think more strategically about the workflows and practices that lead to the best results.
It's precisely those poached employees who can help you take a fresh look at your processes, problems, and technologies, letting companies collect as many fresh ideas as possible from experienced outsiders before they settle in and start thinking like everyone else.
Armed with experts who all have their own experiences working with competitors, you’ll be much more likely to come up with ideas for improvements to your product and breakthrough ideas for new innovations. As a result, talent poaching might be better envisioned as creative swiping, where companies take ideas from each other and give them a small twist.
Like it or not, companies that poach one another's talent are effectively sharing best practices. Rather than trying to reinvent the wheel, it makes a lot of sense to be nosy about what other organizations are doing, take insights that make sense to you, and customize them.
Newly poached employees don't just share knowledge about how a previous employer operates, they also offer intangibles like different attitudes and ideas, plus a different take on what works, what doesn't, and why.
Talent poaching also tends to make partnerships and collaborations more likely and possible within industries. When talent flows freely through companies, new employees bring with them all of their connections from their previous employers. If, for example, company A wants to reach out to company B, company A employees who used to work for company B know who the relevant contacts there are, how to reach them, and how to speak to them.
That ultimately makes company A better equipped to make a successful sell. Silicon Valley firms often see themselves locked in tight competition and don't collaborate all that often. But there are a number of ways that more of the sorts of corporate partnerships that take place every day in other industries can still prove mutually advantageous—not just for individual tech companies, but for the industry as a whole.
And in this day and age, the best interest of the industry isn't something to sell short for near-term gains. Silicon Valley should embrace what's already going on in its tight talent market rather than fight it. Other companies are going to scout out and poach your employees, and you should be scouting out your competition for new talent, too. Because in the end, talent poaching will allow for a more innovative, accountable, and productive workforce.
Rephael Sweary is the president of WalkMe, a startup that provides a cloud-based, enterprise-class guidance and engagement platform for businesses to guide and engage users through any online experience.