Why not to poach in the channel

Coming out of the economic downturn-or perhaps entering a new one-employment trends and the labour market are a major topic of interest. In IT, the news is typically good-the sector has fared better in terms of unemployment rates than other industries and it seems to be a continually growing field.

But within the channel, there are anecdotal cases of turnover in sales and even “poaching” of talent by competing companies.

“Turnover is never really a benefit,” said Megan Slabinski, district president of Robert Half Technology, who oversees tech recruitment for western Canada. For solution providers, turnover could mean missed deadlines on major projects and in sales, contracts lost- which is why retaining your best people is key.

Turnover in distribution 

“I would say that during the true recessionary period, we definitely saw less turnover,” said Stefanie Bruno, director of human resources at Tech Data Canada. “In general, I think employees who had secure jobs tended to ride out the economic storm with their employers.” This isn’t really a trend issue, though, so it’s difficult to track, Bruno said.

According to Robert Half Technology’s 2011 technology salary guide for North America, 40 per cent of employees are inclined to look for new opportunities as the economy improves. “I would say the most turnover is at the mid-level,” said Travis O’Rourke, division manager for Hays Specialist Recruitment’s IT hiring.

But, following the recession, there wasn’t as much turnover as Bruno expected. “At Tech Data Canada, we didn’t really experience that,” she said. Notionally, though, there was turnover within IT, not limited to sales, she said. “Certainly from the media reports we heard of activity,” she said.

The unwritten rules

There are instances of poaching or turnover heard of anecdotally within the channel, but that might not be the best practice. “It’s not a huge benefit to get them from a competitor,” O’Rourke said.

“On very rare occasions, it happens in Tech Data,” that an employee is targeted by a competitor, Bruno said. But the distributor is careful not to poach from its direct competitors, she said, which is generally accepted in the industry. “Targeting each other’s resources is not really a good practice for us,” she said. “We operate with that understanding amongst us in the industry.”

“I think it starts at the top,” Bruno said. “There’s just a general understanding and agreement that it’s not healthy (and) it doesn’t make good sense for any of us.”
There are often unwritten rules in the IT sector, along with the banking industry, that companies won’t hire from a competitor. “It becomes counterproductive to recruit from another company,” O’Rourke said. “It costs you more in the end.”

Related story: Channel executive shuffle: Who’s in and who’s out so far in 2010

“It’s not a practice of ours to target anyone who works at a competitor organization,” said Cindy Harvey, human resources manager at Softchoice Canada, based in Toronto. But, the company doesn’t limit itself either. “We do engage with anybody who comes to us looking for a new career opportunity.”

If Tech Data has a candidate from a competitor interested in joining the team, she said she suggests they tell their company that they’re considering leaving. “We do ask that employees who are thinking of doing this come forward and feel comfortable doing that,” Bruno said.

“You lose minimum of a month when hiring a new employee,” O’Rourke added. “It makes much more sense to give salary raises internally than replacing them.” If it does happen, then the “poaching” will be more about the individual rather than what they’re selling, he said. If a company recruits a sales rep from a competitor, it might place them in a different position where their sales skills will be useful, but the product line isn’t relevant. Further, sales roles often have non-compete clauses where for six to 12 months following a departure from a company, a sales rep may not even be able to work in the same kind of role at a competitor.

“Sales roles are always very, very valuable,” he said. “Computers get old and things become obsolete,” O’Rourke said. “Companies have to upgrade, so sales is crucial.”

But in sales, “it might be easier to take someone from outside the industry rather than inheriting another company’s philosophy,” Slabinski said. “If somebody’s going to leave their company, why wouldn’t they leave yours?” she added.

Employees don’t necessarily leave on bad terms for a competitor, though. Sometimes, they move on to vendors or other consulting companies. In 2010, the channel saw two high-profile examples with Ingram Micro’s Justin Crotty leaving for NetEnrich Inc., an IT services company and Tech Data Canada losing Ray Gonsalves to VMware Inc.

“That’s more frequent than going to a direct competitor,” Bruno said. “And it happens, because the relationships between the vendors and our employees is very strong.”

Attraction and retention

Changing the way your organization hires can also be beneficial and curb turnover rates. Starting in 2009, companies have moved toward a “right-sizing” model, according to O’Rourke. When hiring for IT, companies need people who fit all the requirements, not just 70 per cent of them, he said.

“Hiring managers are still very particular on what they’re looking for,” Slabinski said. “People that have been laid off may still be struggling because they have general skills.”

Indeed, certifications and specializations in IT typically leads to more employment and more money. A business mindset is also becoming crucial in IT hiring, according to Robert Half’s 2011 technology salary guide. 

Project-based (or “temp”) hiring is also becoming more common, Slabinski said. In 2009, one in eight paid workers in Canada were temporary workers, according to a November 2010 report by Statistics Canada. Of those, 52 per cent-or one million workers- were contract workers.

“Right now, we’re seeing the lowest level of turnover since I’ve been here,” said Harvey, who has worked with Softchoice for five years. She attributes that partially to the company getting more specific about the profile of the person it wants to hire, she said. “Internally or externally, being able to work as part of a broader team is critical,” Harvey said. Its recruiting team also works to find complementary skill sets to technical expertise. 

For the more technical jobs, such as solutions architect positions, Softchoice uses its relationship with LinkedIn, she said. For up-and-coming sales people, Softchoice recruits off university campuses as well as through specialty job posting sites such as TalentEgg.com, dedicated to new graduate opportunities.

That demographic fits into the company’s overall “work hard, play hard” culture, she said. It also allows Softchoice to take those new employees’ “core foundational pieces,” and grow them, she said. When it comes to attracting and retaining employees, though, the methods transcend age. “Anyone regardless of their age…has to be able to enjoy working,” Harvey said.

Increasingly, companies are also moving toward the Facebook and Google model, O’Rourke pointed out, where employees might have perks such as casual dress codes or company barbecues. “We get applications from people who ask for that and will work for less money. I can definitely say that organizations that have environments like that have far less turnover.”

The exit strategy

Still, employees leaving is sometimes unavoidable. “Companies definitely need to recognize that their most valuable employees are getting other offers,” Slabinski said. When employees do leave a company, it’s important to ask why and find out what has changed for that person, Slabinski said. “Maybe they’re not educated about opportunities within the organization,” she said.

Beyond that, there may be skills gaps for employees who want to move up, say from a help desk position into networking. “If they’re a valued tenured employee, perhaps you invest in them,” Slabinski said. “People need to feel that their company is invested in their future. Exit interviews are always a great way to see how people were treated and why they’re leaving,” Slabinski said.

And, you should just make the best of it, Bruno said. “The IT community is really a very small one. I always say that as much as it’s really important to get a new hire going and on-boarded really effectively, upon exiting an organization, the same should be true,” she said.

“They can push business our way potentially, depending on the role,” she said. “They can still be very good ambassadors for your organization.”

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Jim Love, Chief Content Officer, IT World Canada

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Harmeet Singh
Harmeet Singh
Harmeet reports on channel partner programs, new technologies and products and other issues relevant to Canada's channel community. She also contributes as a video journalist, providing content for the site's original streaming video. Harmeet is a graduate of the Carleton University School of Journalism.

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