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Thursday, February 28, 2008

Hiring from the competition

Is it good practice to recruit/hire your competitors' best sales reps? On the surface the answer may seem to be a no-brainer: You can collect intelligence and weaken your competition all in one shot. Sounds like a good deal, eh.
But the real world is never so simple, and the risks here are substantial.
Is the sales rep leaving the competition because h/she has weakened, done something wrong, or simply is not working out well? In essence, is the competition going to be happy with the departure?
If the sales representative is indeed talented, is the departure likely to motivate your competitor to more drastic actions: Will your own top sales reps be recruited, for example?
How can you properly check/verify references? Obviously it is rather hard to get a truthful reference by asking your competitor for insights.
How will the hiring affect your current employees? Will they be demoralized, angry, or will there be disputes about leads and territories?
Are you (and your new employee) walking into legal messes? Many companies -- ours included -- build non-compete and non-solicitation components into our employment contracts. While non-compete contracts are often difficult to enforce, judges would probably take more seriously the matter if you actively recruited or hired someone who works at the competition.
Is the prospective employee really leaving the competition, or a 'plant' to gather intelligence about your own business. The candidate can get insights, ideas, and inside information about your company -- and take them back 'home'.
Phew. Looks, indeed, like there are many risks here. So what should you do?
I think it is generally unwise to actively recruit reps from the competition -- you are better off finding your own candidates, training them in your methods, and minding your own business.
But what happens if you receive an unsolicited call from a competitor's employee? There's nothing wrong, in my opinion, in listening to the prospective employee, gathering intelligence, and communicating with your current employees about the developments. You can then apply your standard hiring protocol -- modified to respect business confidentialities and your knowledge of the potential employee. Then, maybe, hire the person. But proceed with caution.

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