What should you know about hiring one of your competitor’s rock star employees?

(I am assuming that there are no legally binding or even friendly agreements between you and the competitor on poaching from each other).

HR-Outsourcing-What-It-Is

To begin with, do not hire just because a rock star employee from a competitor is available. Evaluate a few key things before you hire:

  • Do you really have a need for a person with that skill set and experience? Sometimes the possibility of getting a rockstar performer from a competitor to work for you can tempt you to hire the person simply because it ‘feels like there could be value’ … and, perhaps, it may give your ego a minor boost. Evaluate if you really need a person with that skill set and experience or, are you tempted to hire just because he/she is available. In some cases, even if you do not have a need for the person just yet, you and your board/investors may take a decision to hire the person simply because that employee may not be available when you need them. If you do not have an immediate need, assess when you are likely to need a person of that competence and caliber and how difficult will it be to find someone else. And then, take a decision based on costs, opportunities and risks. If you have an immediate need, then go ahead and hire (of course after evaluating a number of other parameters… some are mentioned below).
  • Even in the same division (e.g. sales), if you have different needs than what the person was working on with the competitor, check if the person you are hiring can deliver on that need: E.g. a head of sales, who has been delivering exceptionally good results in converting customers may not be as effective in designing sales programs and marketing communication material, if that is the key requirement of your organization currently. Also, the person may or may not have a passion or interest in doing different things that they have recently excelled at. Hence, don’t just evaluate his ability, but also his willingness and interest to do different things than in his previous job. In some cases, if the deviation is short-term (e.g. designing sales processes and hiring a sales team and developing sales/marketing material) ,  the new person and you may agree that he/she would oversee/drive that activity before moving on to do what he/she has been a rock star at doing.
  • If you are at a different stage of growth than your competitor is, that rock star employee may not be able to deliver the same results as he/she did for your competitor. E.g. if you are just entering a particular market, whereas the competitor is a well-established player, the dynamics of the on-ground realities may vary. Hence, your rock star employee may or may not be able to deliver on them in the changed circumstances.
  • Check if there is a ‘fit’ with your company personality, value-system, aggression (or lack of it), work culture, policies, infrastructure, etc.:  People who succeed in one environment may not necessarily be as effective or productive in a different environment. E.g. if your competitor’s work culture was more aggressive or competitive internally than yours, while your company’s work culture is more ‘encouraging rather than pushy’, the person may ‘respond differently’ and may or may not perform as he/she used to in the previous assignment. (In the Indian context, I would use the example of a person, working with let’s say Reliance, not being able to adjust in a TCS or Infosys.)

Also evaluate possible risks

  • Would there be any backlash or reaction from the competitor
  • Would it have any impact on your existing team (especially among those whose level that rock star employee may come in as)

Of course, there could be a lot of positive side-effects in hiring a rock star employee from a competitor. Here are a few possibilities:

  • The most important positives are the information (whatever legally permissible), learnings and industry connections that the person brings to the table
  •  Often, a rock star employee is able to convince more folks from that company to join in, thus making hiring a bit easier
  • It could be a positive signal for customers/partners/investors

We would love to hear your views on this. 

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Author: Prajakt Raut

Prajakt Raut is the founder of Applyifi.com, and author of the book for startups - ‘Starting Up & Fund Raising’ Prajakt personal goal in life is to encourage and assist a 100,000 people to become entrepreneurs. _____________ Prajakt is the founder of Applyifi - an online platform that provides startups a 36-point scorecard and assessment report on the venture's investment readiness [www.applyifi.com], and helps them improve their odds of getting funded. Prajakt is also the founding partner of The Growth Labs, a platform where growth-stage companies get sharp, incisive advice from senior professionals and experienced entrepreneurs. [www.thegrowthlabs.in] Before starting Applyifi, Prajakt was the head of operations at IAN, founding member of a leading incubator, and the Asia-Director for TiE (2004 - 2007). Previously Prajakt had co-founded Orange Cross, a healthcare services company, and was part of the founding team member of Idealake Technologies. While in college Prajakt had founded a printing business and has spent over 10 years working in leading advertising agencies. Prajakt’s book, ‘Starting Up & Fund Raising’, helps startups understand an investor’s perspective, and helps them improve their odds of getting funded. The book also helps entrepreneurs understand the building blocks of a business.

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