Luring away the best - Deccan Herald

Luring away the=20 best

MURTHY B = S

POACHING is a technique of luring people to = move out of=20 their current position and frame of minds and make them accept and = believe=20 that the new change will be beneficial for the = individual.

It is=20 also a way an organisation gains huge advantage or benefits over = its=20 competitors. Some of the most successful cases of poaching comes = from the=20 sporting arena, mainly from soccer clubs. Millions of dollars are = spent by=20 these clubs to get those stars and emerging stars to stay ahead in = the=20 business of running a game.

The basic advantage an = organisation=20 gets when he poaches a professional from the competition is the = advantage=20 of getting someone who knows the current corporate strategy and=20 organisation=92s inside details which may benefit the company = which hires.=20 This is more so among fierce duopoly markets like Pepsi and Coke. = CEOs=20 always look for the extra edge in terms of information and market=20 intelligence to stay ahead in the race.

In good number of = cases=20 these defectors are dumped after their short-term utility is over. = Mid and=20 late nineties saw a large number US-based companies poaching key=20 professionals from each other, thousands of lawsuits and cases = have been=20 fought in the US courts because of IP issues involved when an = incident of=20 poaching happens. The classic one has been between Lucent and = Cisco where=20 Lucent had filed a lawsuit accusing Cisco of poaching its key = people and=20 stealing away the IP along with the people. In top management = moves, the=20 individual who gets =93poached=94 will be under tremendous = pressure to=20 deliver, because he is expected to bring in big change in business = or=20 technology in the immediate short run.

Comparative=20 results
A study explains why, unlike US firms, German firms = usually=20 pay for apprenticeships, even though the training is general and = easily=20 transferable to a competitor.

The failure of the US economy = to=20 generate the high levels of training as observed in Germany or = Japan is=20 often blamed on high employee turnover in the United States. High = turnover=20 lets a competitor benefit from a firm=92s investment in general = employee=20 training. For this reason, certain economists claim that employers = should=20 only pay for firm-specific training that does not help an employee = attract=20 higher wages elsewhere, and that general training costs should be = borne=20 exclusively by the employee himself.

However, German firms=20 voluntarily pay for apprenticeships, which entail general training = delivered in a prescribed national curriculum, costing them more = than=20 30,000 German Marks annually per apprenticeship. Why do they?=20

Germany has a lower employee turnover or quit rate than = the United=20 States: during the first 10 years of their career, German workers = hold=20 only one or two jobs, while US workers hold up to six. Second, = whereas an=20 American worker can expect a raise when changing jobs, a German = apprentice=20 usually gets a cut in salary.

Poaching from = within
Some=20 companies have even integrated inter-departmental employee = poaching into=20 their corporate culture. Intel, for example, had a formal program = in the=20 US that encourages managers to lure employees from other = departments. In=20 1998, more than 10 per cent of Intel employees were poached into = positions=20 across their global operations. Intel sees it as 10 percent fewer=20 employees leaving for the = competition.

Retention
But are=20 all employees worth retaining? The traditional approach to = turnover=20 focuses on turnover rates of the total employee population, so = retention=20 efforts have focused on the workforce as a whole. In contrast, = global=20 consulting firm Andersen=92s approach is called =93targeted = retention and=20 managed turnover=94. In Andersen=92s view, its crucial to identify = the highly=20 productive, high-potential employees and to focus retention = efforts quite=20 specifically on this segment.
This also includes identifying = and=20 monitoring those employees whose performance and/or technology = skills may=20 no longer fit in with the best interests of the company and = encouraging or=20 even facilitating their outplacement.

Remember, in the = current=20 technology sector downturn, outsiders may be doing you a favor = when they=20 recruit workers who are no longer vital to the company's core = activities.=20 By allowing these employees to be =93poached=94, a company can = downsize=20 primarily through attrition rather than layoffs. Meanwhile, = businesses=20 need to keep their most important employees happy and productive. = A recent=20 Andersen study found that turnover rates are far lower for the = =93100 Best=20 Companies=94 than for others in the S&P 500. If they=92re = happy, employees=20 will stay. If they=92re treated right, they=92ll be both happy and = productive.

Indian perspective
In India, poaching = has=20 been there since time memorial, more so it happens in politics = than in the=20 corporate world. The phenomenon is more rampant in the IT industry = in the=20 last 10 years or so. This initially started off with the US hiring = seasons=20 in the early nineties and snowballed into a major issue. Even the = biggest=20 of the organisations could not hold on to their best professionals = in=20 spite of the best compensation and benefits.

An = organisation=20 becomes a target of =93poachers=94 because of a high skilled work = force,=20 excellent hiring and training strategies and processes. Another = primary=20 reason is because of the major differences in salaries between two = markets. Another primary reason will be build new practices and = give the=20 organisation a huge edge in the knowledge and the learning curve. = This=20 happens more so with the top management poaching.

No = poaching=20 arrangements
There are arrangements among the four major = GSM=20 operators viz Airtel, Hutch, Idea Cellular and BPL Mobile that = they will=20 not poach professionals from each other.

This has by far = helped=20 all of them to retain and stabilise the operations. This = arrangement is=20 respected by all the operators although there are cases of = violation=20 reported, they are minimal. In these cases employers can plan out = major=20 organisation development and training programmes and utilise the=20 resource.
Recently the ITES companies in Hyderabad also have = drawn up a=20 =93no poaching=94 agreement among the group formed. This = definitely helps all=20 of them in retaining employees. In an industry where poaching and=20 attrition is rampant putting companies into deep trouble within no = time,=20 this system of no poaching definitely helps companies to plan and = retain=20 people. Although this cannot be applied at the national level, = regionally=20 this helps in India.

We also have a few more of those = arrangements=20 coming in place in Bangalore. We have a few MNCs ITES firms = entering into=20 a no poaching agreements. This will perhaps put an end to = professional=20 jumping jobs every three to six months. In these arrangements, the = companies make it mandatory for an employee to stay for a minimum = of two=20 years before he can be let off to go and take up another = assignment. This=20 is also a minimum period for the organisation to invest in = training the=20 professional and make him productive.

A similar arrangement = is=20 existing in Technopark, Trivandrum. A large number of = organisations=20 working from Technopark have entered into a formal arrangement = that they=20 will not poach professionals from each other until unless the = professional=20 has completed three years of experience. In any other case the = employee=20 has to provide a no objection letter from his employer to the = prospective=20 employer. Jumping jacks would avoid getting into such a mess and = remain=20 with the current employer. By and large the arrangement seems to = be=20 working to the delight of the employers.

Few organisations = are=20 notorious and are labeled as poachers by their competitors and = industry=20 circles. They invariably come from infotech, FMCG, and media = segments.=20 Notably poaching is rampant in the knowledge based segments like = IT,=20 consulting, bio-technology, media, entertainment sectors and not = in=20 sectors like 3energy, power, utilities or basic infrastructure = where=20 business are driven more on process and systems than on individual = starts.

Cases of mutual poaching keeps getting reported in=20 Bangalore between two large IT services major=92s based in = Bangalore. It is=20 tough to say who benefits, but definitely all the involved = organisations=20 gain and suffer from it.

Companies which poach = professionals from=20 every other organisation normally is the target of every other = player in=20 the industry.

The other side
No poaching = arrangements=20 means a few opportunities gone for a active job seeker in the ITES = sectors. Let him sit and plan his career necessarily for the long = run,=20 keep aside the short term freebies and pay hikes and focus = entirely on the=20 learning curve. For a professional this will definitely be a bad = idea. He=20 cannot keep switching jobs very three months, he has to plan = better well=20 in advance if he is keen to change.

He has make sure that = he is=20 joining a company which has no agreements with his current = employer. ITES=20 industry is witnessing this jumping jacks everywhere, sometimes to = the=20 nightmare of the hiring managers they shift jobs from companies to = companies within months in large groups. Organisations = facilitation group=20 poaching=92s should realise that they will also be a target = someday. In the=20 quest to hire and retain the talent the saga of new innovations to = train=20 and retain the best of the human capital continues.

The = author=20 is CEO, Human Capital Consulting Private Limited. He can reached = on=20 e-mail:=20 murthy@humancapital.co.in


	Deccan Herald, = Wednesday,=20 December 10, 2003