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Berkonomics

Can your employees recruit from a customer or supplier?

The recruitment traps

It has happened to all of us who have been leaders in business long enough.  One of your employees is approached by an employee of a customer or of a supplier, stating that “It sure would be great to work in your company.”  And without a policy or sometimes without thinking, your employee responds with a “Let me help,” or worse yet, “I have a position open.”

State your policy clearly

You should be clear from the start that no one at your company may offer a job to any current employee of a stakeholder – a customer, a partner in development or in distribution, or of a supplier. The rule should be one that includes only one “out”: if a person resigns from the position with the stake-holding company, then you will be happy to talk about a position.  No winking, sending signals, or quiet promises.

The exception

There are instances where such an existing stakeholder employee offers to go to his or her boss and ask permission to speak with you, and the boss not only concurs but agrees to call you (not just to take your call).  In that case alone, it is proper to continue as far as the offer and beyond.

My story of an employee over the line

[ Email readers, continue here…]   Let me tell you the story from one of my companies where I was chairman that recently learned about the recruiting rules that should have been in place – the hard way.  The CEO of my company checked into a hotel that was a customer for its enterprise management system, and through a few innocent questions found that the owner of that hotel and other hotels was about to purchase several new systems for his new projects.  The front desk clerk cheerfully gave my CEO the hotel owner’s contact information.

The blow-back from the other side

So, the CEO called the hotel owner that day.  “I will never deal with your company again!” was the short reply from the hotel owner to the CEO, shocking the CEO looking for a closer relationship and future sales.  It turns out that another manager from my CEO’s company had recently approached that very same cheerful hotel clerk, hinting that a job would be available if she’d like to apply.   The clerk told the owner, and the rest is history.

Backing your way out of a bad situation

Properly, my CEO begged the hotel owner for forgiveness, immediately sent an email to all our company’s managers reinforcing the existing policy of not hiring a stakeholder’s employee and spoke to our employee making the offer in a non-threatening tone, again reinforcing the policy.  During the phone conversation with the hotel owner, our CEO carefully set the stage for a later call to mend fences and check on progress with the existing system already installed.  He made all the right moves given the situation.

But wouldn’t it have been easier to avoid this kind of sticky and dangerous event in the first place?

  • A lot of companies have recruitment bonuses that they will pay to existing employees to find new hires. These situations just beg for someone to cross a line. Those are the times companies have to be really clear.

  • Dan Hoefflin

    It always amazes me how easy it is to fall into huge traps through lack of experience. Having clear policies regarding employee behavior is critical. Your article could save many owners some real headaches downstream – thanks, well-done.

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