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Berkonomics

It is dangerous, but fair game to hire from a competitor.

Sometimes it is the first thought you or your managers have when in need of skilled talent, especially for sales or product development.  It is not hard to find and observe the best employees of a good competitor at work, skillfully moving the competitor forward in a visible way.

And it is a tempting slice of pie – two slices for one price – to take a critically needed employee from a competitor, damaging that firm while building yours.

The problem is that a visible hire that “cuts” the competitor makes the competitor’s management bleed.   And you’ve heard of blood revenge.  That’s the worst kind, because it results in emotionally lashing out at the offender (you) with a response that is greater than the action that precipitated it.  In many cases, your firm can withstand the response.  In some though, cross-raiding of employees by offering unsustainable salaries or perks you cannot offer to all because of your size and financial position will leave you in a position to pay grandly for your action.

Consider the relative size of the competitor, the visibility of the target employee, and your ability to withstand a backlash before exercising the two slice tactic.

  • This is very sage advice. A few years ago there was a recruiting war between Intel and AMD. Many lawsuits filed and when the smoke cleared the cost of the hires was high. When going after sales staff the rolodex of the dominent company may be worth the risk if the smaller company has technical advantages. When expanding be aggressive but use your head.

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