Is Uber’s Audacious Recruiting Tactic Smart Business?

Is Uber’s Audacious Recruiting Tactic Smart Business?

While Uber represents an extreme example, employee poaching is easier than ever. Credit: Uber.com

While Uber represents an extreme example, employee poaching is easier than ever. Credit: Uber.com

Earlier this year, Lyft drivers across the nation were experiencing a familiar phenomenon: they would pick up an Uber recruiter acting as a passenger, who would then spend the entire trip convincing the Lyft driver to take a job driving at Uber.

Specifically, the drivers were offered more money per hour and up to a $1,000 bonus to join the rival driving service, according to various news reports.  The move was just part of a master plan by Uber entitled Operation SLOG designed to crush their biggest competitor.

It is hard to argue that the plan is ethical, as Uber has quickly (and perhaps rightfully) gained a win-at-all-costs reputation. And while the drivers were given a bonus and allegedly paid more per hour, there is more and more evidence that Uber’s drivers don’t make nearly what Uber claims.

Uber is playing with fire, telling drivers they’ll make more than they really will and putting a giant target on their own back that competitors are all-too-eager to aim at. But their aggressive recruiting method raises a bigger question: is poaching your competitor’s employees good business?

The State of Poaching Today

Poaching competitors’ employees has gone on since business has gone on. In the late 1800s, for example, famed newspaper baron William Randolph Hearst hired the three top editors from his chief competition, the New York World, for his paper, the New York Journal, at the height of yellow journalism.

In the years that followed, employee loyalty (or employer loyalty, depending on how you want to look at it) increased, as workers would often stay with their companies for their entire career. But today, that model has blown up, as job hopping is on the rise and the average stint for a millienial at a job is less than three years.

Companies have taken steps to reduce that – illegal steps, in some instances. Specifically, Google, Microsoft and five other top tech companies were recently sued after emails leaked between former Apple CEO Steve Jobs and former Google Executive Eric Schmidt where they agreed not to hire each other’s employees.

The fact is, with LinkedIn and a hundred other outlets, poaching employees is easier than ever before. And people are usually willing to listen: a recent study revealed that 85 percent of employees would talk to a recruiter and consider changing jobs, for the right opportunity.

What Can Businesses Do?

The above information creates a two-fold dilemma for employers. First off, is poaching your competitor’s employees good business? And second, how do you ensure your employees aren’t poached?

To answer the first question, poaching your competition’s employees sounds like a good idea. But there are some negatives to it: generally, you have to overpay people to do that; someone who leaves one company will be more likely to leave another, so they’ll be less loyal; and just because someone is good for someone else doesn’t mean they’ll be good for you.

Harvard Business Review conducted an in-depth study into that exact issue and found all three negatives to be true. Specifically, the study concluded that even superstar employees at one company, when brought to a rival, didn’t perform as well, were generally overpaid and lowered the morale of the rest of the team.

The point is this – it is far better (and much cheaper) to develop your own talent than to steal someone else’s.

Conversely, how do businesses ensure that their employees aren’t poached? Well, it comes down to treating people right.

Legally, there isn’t much companies can do. Some organizations require their employees sign non-compete clauses so they don’t switch teams, but those clauses are almost impossible to enforce and the states of California and Texas don’t recognize them at all.

Instead, if employers want to keep their best people, they need to pay them well, treat them right and listen to their concerns. After all, changing jobs is a stressful experience, and humans do everything they can to avoid stressful experiences. So the odds are actually in-favor of companies keeping their employees, if they are good to them.

At the end of the day, some employees are going to leave, but a company that treats its employees well and pays them well should be able to retain most of its talent. Conversely, it is probably a smart business model to avoid the Uber approach, and focus on developing your own employees rather than always looking at someone else’s.

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