Why Employees Aren't Cows and Anti-Poaching Agreements Are Stupid

Rob Enderle

There is an ongoing antitrust probe among a number of high-tech companies about employee anti-poaching agreements. These agreements, typically between large companies, represent a pact not to compete for certain human resources.


The agreements by their very nature are anti-competitive, and the organizations that enter into them argue that their reasons are to allow companies to collaborate without concern that relationships might be formed that would result in the related key assets finding the grass greener on the partner's side of the employment fence. There appears to be at their core an executive belief that employees are kind of like cows. If you're going to blend the herds, then both sides have to know they can get their cows-or in this case, employees-back. Unfortunately, with people, branding isn't an option, so this is used instead to make sure that the company's livestock makes it back into the company's pens when the project is over.


The Argument for Anti-Poaching Agreements


Treating people like people comes with costs that include competitive salaries and benefits, making the company a place they want to work, and doing a not-inconsiderable amount of work to assure their fiscal and personal happiness. People are hardly static. What they want might differ a great deal from day to day, and they often can be led astray by promises that the grass is greener in another pasture. (It often isn't.) This requires befriending them, talking to them, having some concern about their careers, health and families. All of that is a distraction from watching markets and competitors, and a detraction from the bottom line. Companies aren't measured by happy herds of employees. They are measured by bottom-line performance.Anti-poaching agreements better assure solid and predictable bottom-line performance.

The Argument Against Anti-Poaching Agreements


People aren't cows, nor are they slaves that can be sold or prevented from being sold under third-party agreements. This goes beyond the foolishness of short-term anti-competitive practices that can stagnate industries. Preventing employees from going where they can be happier, make more or be more productive creates a drag on the company and the industry because they will likely underperform and not be used to their potential in the company. The agreement takes the emphasis off maximizing the effectiveness and happiness of employees and puts it on their forced retention. While this isn't a physical leash, it performs as a similar constraint.


Preventing salaries and compensation to grow with the value of an employee undervalues the jobs and makes them less attractive to high-performing, results-oriented students choosing careers. These students then move into other industries, reducing the pool of high-quality talent available for long-term growth. Finally, cross-pollination between companies helps firms stay current, keeps them from being too inbred and out of touch with their markets and competitors, and is a primary source for new ideas.


Wrapping Up: Tactical vs. Strategic


It is unsettling that many of the companies identified in this investigation, while limiting the salaries and benefits of the rank-and-file employees, provided private jets, multimillion-dollar benefits packages, and other perks to the executives who created the agreements.


When I hear about companies and executives doing foolish things like these anti-poaching agreements, I really wonder about the brain trust we have running some of them. If these same tactics were used against them, they would be livid. The idea of treating people like cattle-or to use a more volatile but still correct word, slaves-should be abhorrent to all of us. Employees who find out about these agreements feel trapped, and often look at their leaders unfavorably. Their responses can range from a loss of motivation to acting out, neither of which is good for the company or their own careers.


In these days of social networks, citizen journalists and accelerating government oversight, these agreements create an unreasonable risk of bad publicity, fines and other punitive action. They simply represent too much risk and too little benefit for the practice to continue.


Finally, companies, as opposed to fiefdoms, are supposed to be cooperative groups of people sharing in a common goal and the resulting benefits. Maybe it's time a few folks remembered that.

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