Dr John Sullivan Talent Management Thought Leadership
Employees Are Not Owned by the Corporation
Poaching employees is not stealing, because employees are never owned. I literally laugh out loud when I hear individuals say that it is illegal or unethical to poach or steal employees from another company. Let me be crystal clear on this: Employees are not owned by the corporation. The U.S. Constitution and numerous laws around the world outlaw the "ownership" of individuals. The practice of owning individuals is known as slavery or indentured servitude. Corporations can never "own an employee" and as a result, it is never illegal to recruit an individual away from a corporation.
Now, there are some very rare cases where someone who is hired away might unfairly utilize company secrets or company information. But even in those rare cases, the recruiting away itself is not illegal, it is only the use of the company secrets that becomes a legal issue. The freedom that America is so proud of applies to corporations also. Despite what some have said, there are no laws that restrict one corporation from attracting away the typical employee from another corporation.
CEOs and senior officers of corporations are poached or "stolen" away from other corporations on a routine basis. When Jeff Immelt of General Electric was promoted, the two competitors for the top job were poached away almost immediately. No one cried foul or unethical, and the companies who got the new CEOs were ecstatic. Many who say that the poaching of employees is unethical routinely fail to criticize the poaching of executives. Talent constantly moves between corporations. Anything we do to speed up that movement and to increase an employee's freedom to move is a good thing.
Poaching and Competition Strengthens a Corporation
Recruiting great talent is always a fight (some call it the "war for talent" for good reason). If you want the very best candidates, those who are well-trained and good at what they do, you really have no other option other than to poach from your competitors. The one remaining option, hiring exclusively from non-competitors, invariably means hiring candidates without experience in your industry, candidates from outside the region with high relocation costs, candidates whose skills are stale, or candidates without any relevant experience. Hiring these people means extra costs to the firm because of their slow start up and their long learning curve just to understand the industry and then eventually, come up to speed in their job.
Conversely, a fear of poaching can hurt your corporation. Many HR people are afraid to poach away from other corporations because of their fear of retaliation. Unfortunately, using that logic, your product division wouldn't offer competing products because a large competitor might, as you put it, squash them! Your salespeople wouldn't compete head-to-head for the same customers, out of fear of retaliation.
No, businesspeople expect competition everywhere, and only HR people see "ethical issues" in highly competitive practices. These so-called ethical issues are just not raised in other business units. I have difficulty understanding HR professionals who keep saying that they want to be "business partners" but when given a chance to actually compete like a businessperson, fail to act like real businesspeople do every day — which is to compete aggressively in the marketplace.
Incidentally, poaching forces your own firm to pay close attention to its own top performers in order to keep the competitors from poaching them away. This attention might have a secondary effect of increasing employee productivity and satisfaction.
Restricting Individual Freedom of Movement Is Wrong
I occasionally hear of corporations that have reached an informal agreement with their competitors not to poach each other's employees. I find that practice to be abhorrent and a violation of both personal freedom and free competition. When you offer an individual employee from one corporation a greater opportunity with a new job offer, you are offering them an opportunity to take advantage of their right to quit at anytime for any reason. When corporations institute practices and agreements that restrict an individual's freedom to move between companies, they keep these agreements a secret because they are obviously a restriction of freedom and free trade.
As a recruiter, I am proud to offer individuals increased career opportunities, and I find it abhorrent that companies (always under the table) attempt to restrict the freedom of individuals to move by agreeing not to poach each other's employees. Not only does this restriction limit an individual's job choices, but it also serves to keep the cost of labor down. This is also abhorrent and illegal.
I challenge companies and HR departments that have these under-the-table agreements to make them public throughout their firm, so that all employees will know that their freedom is being restricted by the selfish interests of a few managers and HR leaders who don't know how to treat their employees well enough to keep them, in spite of an external offer.
Restricting trade is clearly illegal, and so is restricting employee's freedom to move. For this very reason, many states, including California, have found that the majority of "non-compete" agreements signed by typical employees are unenforceable, because they unfairly restrict your freedom to use your skills and talent. In my opinion, if your corporation requires those agreements for all jobs, you are contributing to a type of indentured servitude while simultaneously demonstrating that you don't know how to treat workers well enough to keep them, despite other offers.
The Use of Third-Party Recruiters to Keep Your Hands Clean
I find it humorous that individuals in HR who find the practices in the case study to be "unethical" often turn around and hire third-party recruiters to do their hiring for them, without restricting how the third party goes about their recruiting. Managers and HR are merely closing their eyes to the approaches that are being used by these third-party recruiters every day.
I don't find the tools used by most third-party recruiters to be unethical. But I do find it hypocritical that HR hires someone else to do the "dirty work" that they refuse to do themselves. It's like saying you're against murder but it's okay if you hire a "hit man" to kill for you. If closing your eyes and being unaware of what's happening outside of your department is ethical, I want no part of it. Be open and proud about how you recruit, like FirstMerit is, but don't hide behind the approach that if I don't see it, it's okay.
In a similar vein, some HR professionals lack the courage to "fight" (directly poach from a competitor) so they instead hire third-party recruiters to do their "poaching" for them. But even in this case, both sides always know what's really going on. Being successful in any business function means constantly competing — and recruiting is not exempt from that expectation.
Most of the Complainers Represent Third-Party Recruiters and the Unemployed
A majority of the complaints that I have seen about the best practices listed come from third-party recruiters or from professionals who represent unemployed jobseekers. Let me comment on third-party recruiters first.
I respect third-party recruiters and find them to be the very best recruiting professionals. But unfortunately, I have also found that most of their comments about "ethics" run counter to many of the practices that they themselves actually use. This apparent contradiction can only be explained in my mind by the fact that, as Michael Homula of FirstMerit put it, they want corporate recruiters to remain stupid.
I unfortunately don't have any data to support this contention. But my experience certainly tells me that third party recruiters thrive in large part because corporate recruiters are afraid to poach and use aggressive recruiting tactics. In fact, I frequently get comments from third party recruiters that my approaches are actually relatively tame compared to what they do. I agree with that point. That was one of the purposes of the case study: to attempt to shock corporate recruiters into becoming more aggressive.
The second group of criticizers includes a number of people who represent or make money from unemployed jobseekers. Their contention that the very best are among the unemployed is just not supported by the facts. Although I sympathize with those who are unemployed and those who try to help them, I find that they have an almost universal willingness to blame others for their situation. I find, in direct contrast, that the very best in any field are well known and their skills and contacts are continually up to date. As a result, they are instantly snapped up if they are ever on the market. Anyone who says targeting employed people is unethical is, well to be blunt, just silly. Business is not social work. Social workers shouldn't tell business "capitalists" how to operate.
The Misuse of the Word "Ethical"
I can see the headlines now: "John Sullivan comes out against ethics." While that is not exactly true, it is certainly true that I am against the very common "misuse" of the word ethics. I find that the clear majority of people who use or misuse the word ethics know very little about it.
Let's start with the definition:
"Ethics is a branch of philosophy and that deals with morality. Ethics is concerned with distinguishing between good and evil in the world, between right and wrong human actions, and between virtuous and nonvirtuous characteristics of people."
What this definition clearly points out is that ethics is:
- Ethics is not a law, or even a practice, but instead it is an individual philosophy or belief.
- Ethics deals with morality and thus it is closely aligned with religion, which is an individual belief, not a fact, law, or company policy.
The lesson to be learned from this definition is that when people say that something is "unethical" what they are really doing is expressing a personal moral or philosophical belief. It is their right (at least in America) to exercise that belief, but it is important to realize that it is no more than their personal belief. As a belief alone, it clearly does not have the force of law or society behind it.
When society wants a corporation to act in a certain way, it gets its representatives to pass laws to regulate that action. But personal ethics are not laws or corporate rules or policies. And because corporations are owned by individual shareholders, corporations have no obligation to listen to any individual's personal belief that is not a shareholder, employee, or a customer.
If you are an employee and you hold moral values that run counter to the organization's rules and policies, you have two choices. The first is to try to get those rules and policies changed, and the second is to leave the corporation and join another with moral values closer to your own. The right that you do not have is to change the way you do your job in order to meet your own personal beliefs. To do so is simply arrogant and insensitive to the wishes of the corporation's owners.
For example, if you are a vegan and don't believe in eating animals, you do not have the right as a company chef in the company cafeteria to serve only vegetables. If you are not an owner of a corporation, you have little say in how a corporation operates. If you don't like them, don't be an employee. Buy stock and express your opinion with your shareholder vote.
If you're a customer of a corporation and it acts in such a way that counters your beliefs you have two choices. Buy stock in the company and influence its actions at the shareholders' meeting, or stop being a customer and influence the corporation's actions by removing your dollars.
Because corporations are owned by shareholders, corporations have an obligation to listen to them. If you are shareholder of the corporation and you have a strong belief or ethic, you can express that belief at a shareholders' meeting or with your vote for the board of directors.
Because there are people on this earth with outrageous individual beliefs like "the moon is made of cheese" it is important that individual corporations do not change the way they act just because of a single individual's opinion or criticism. In HR, there is no standard code of ethics. The EMA (the association for corporate recruiters) has no ethical guide which covers all recruiting. In short, if it does not violate a law or a corporate policy, it is okay.
This is especially important in a global corporation where something that is considered unethical by some individuals in the U.S. is totally acceptable in other countries. For example, serving beef in the company cafeteria in India might insult a lot of employees, but the same practice would not automatically be offensive in Iowa.
Conclusion
There are laws and company policies to govern behavior in business, and any personal objection to poaching is just an opinion that is not supported by law. The freedom that America is so proud of applies to corporations also. Corporations do not own employees. In America, employees can quit at anytime, for any reason, including by accepting an offer to improve their lives at another corporation.
The social-worker thinking that permeates HR doesn't exist in other business functions. Salespeople steal "paying customers" away from competitor's everyday — and they call it their job. Recruiting away top talent is no more or less ethical than stealing another company's customers. I assure you that salespeople don't spend hours arguing the ethics of stealing away another firm's customers.
Why? Because customers, just like employees, are not owned by the corporation, and offering customers additional opportunities is what capitalism and freedom is all about.
HR has come under a great deal of criticism recently, not because it is too aggressive or unethical but instead because it is too slow, bureaucratic, and afraid of taking risks. To those "I know better" types who criticized the management practices in the case study, I suggest you spend some time in sales, product development, marketing, or branding. You'll learn rapidly that the world of corporate business is highly aggressive and highly competitive. Practices that you might think as "unethical" like copying products, lowering prices to hurt the competition, opening a store across the street from a competitor, and even charging outrageous prices are in fact commonplace in business because the market allows it.
I have nothing to retract from the case study. To those who attempt to make recruiting less competitive and more "docile," I urge you to look at the growth of China and India. I have worked in both countries, and I assure you that they share not a single one of your qualms or personal ethics about recruiting. If your company or your country fails to meet their aggressive practices face to face, I hope you will accept personal responsibility for losing thousands of additional jobs. Competition is relentless and the world is changing at a blistering pace. Being aggressive is now required just to survive!
I leave you with this quote from one of the world's most aggressive leaders and a true capitalist:
"If the rate of change inside an organization is less than the rate of change outside, their end is in sight! — Jack Welsh
