First of two parts
The recruiting function is unique among business functions because almost no one in recruiting can actually name even a few of the different strategies that are available to the chief recruiting leader.
But this is not about the complete list of recruiting strategies (that can be found here), but instead is about which strategy from among the 20 plus possibilities is the boldest and most aggressive recruiting strategy you could possibly employ.
It’s called “Hire to Hurt” for good reason
The “Hire to Hurt” strategy (or H2H for short) is the most aggressive for a variety of reasons.
- First, the name alone sends chills through the risk averse in recruiting.
- The name of the strategy is also clearly indicative of its chief goal, which is to “identify key talent and then directly hire them away to the point where your H2H hiring actually hurts the competitor’s business results.”
It’s a two-for-one deal. Not only does your organization get top quality talent, but simultaneously, your top competitors’ lose key talent.
As one CEO put it, “I really like that strategy; our ship rises while their ship sinks.” (Incidentally, the No. 2 most aggressive recruiting strategy is “make other firms your farm team”.)
Every other business function tries to hurt competitors
Recruiting needs to wake up and smell the gunpowder because almost every other business function already directly attacks competitor firms. For example:
- Sales – A majority of a B2B salesperson’s time is generally spent targeting competitor’s customers in the hope that they will shift over to your own company’s products or services. Even retail salespeople are taught to continually convince customers from other firms to shift over to buying from yours.
- Advertising – Advertising leaders frequently run “attack ads” specifically to hurt the product image of their direct competitors.
- Pricing – It is a routine practice to suddenly lower the price of your product in order to draw away customers from your competitor’s product.
- Real estate – Corporate retail real estate buyers routinely purchase ideally located properties simply so that they will not be available to a competitor firm.
- Product development – It is a common practice in product development to quickly add product features in order to mimic or exceed the product features of your competitor’s new product models. Services are also added in order to catch up with or to hurt your competitors.
How Uber poaches drivers from Lyft
In order to maintain a competitive recruiting advantage, most firms obviously don’t publicly announce that they are raiding competitive firms for their talent. But that secrecy doesn’t mean that dozens of firms aren’t currently using this practice.
Uber, the taxi-like private car service, for example proudly revealed that its version of the hire to hurt strategy recruited over 50 drivers in just two large cities over a six-month period. It had its recruiters simply schedule cars from its competitor Lyft, and once underway, the recruiter would directly begin their recruiting sales pitch to the “captive” Lyft driver.
To further incentivize the hiring of competitor drivers, Uber also (in essence) put a “bounty” on recruiting drivers from their competitors. It did this by doubling the standard reward for recruiting a driver who currently works at Lyft and then doubling the bonus again for recruiting away “a Lyft mentor” (experienced drivers who help train new drivers).
Lyft vigorously complained about the recruiting process, which is further verification that the process was actually “hurting” the competitor. Despite the complaints, there were no legal consequences because employees are not owned by any company and they are free to leave at any time.
And despite what the uninformed might think, hurting the competitor isn’t illegal, unethical, or even immoral — it’s merely part of the competitive game.
More benefits with the “Hire To Hurt” strategy
If you’re still not convinced, here is a list of additional benefits that can occur to a firm that successfully implements a “hire to hurt” recruiting strategy.
- You get fresh ideas, best practices, and new perspectives (Note: it’s OK to recruit away employees, but you can’t take or use intellectual property).
- Your competitor’s ability to execute is now limited.
- Recruiting one key talent away from a competitor may turn into a “magnet hire” who may eventually result in a stream of recruits coming from that firm.
- Customers may notice the exodus from one firm to another and follow the talent to your firm.
- Your competitors will lose a great deal of management time and money because the managers at your competitors have to recruit replacements and the replacements will probably perform at least initially at a significantly lower level. But because the poaching is continuous, managers will also have to spend a great deal of time protecting and retaining their remaining top performers from poaching. Taken together, these two factors will reduce the amount of free time that managers have to spend on product development or other worthwhile business tasks.
A Wall Street example
An example may illustrate the point: While I was working with a large Wall Street investment bank, one executive loudly boasted that they had just hired away a key investment banker from their direct competitor. The package they gave the newly recruited banker was worth $5 million.
An HR exec pondered out loud, “What could they possibly do for us that would be worth $5 million?” The response was quick and to the point — “I am not certain yet what they will do for us, but one thing is for sure– they won’t be making the competitor $50 million, like they did the previous year.”
Everyone in the room nodded in understanding!
Refusing to poach from direct competitors is illegal
In case you didn’t know it, refusing to poach from your competitor’s is clearly illegal under federal law, because the reduced competition for talent in essence artificially lowers employee wages and restrains trade. And of course your competitors will likely try to raid you, but be aware that competition for talent actually makes firms and their managers stronger.
If you don’t force your managers to compete in the marketplace, this insulates them. Being isolated from competition allows your managers (and HR processes) to grow weak.
In the short-term, having weak managers hurts productivity. In the long-term, it eventually leads to an even higher rate of turnover at your firm than you would have in a normal competitive job market.
Tomorrow: 25 Jobs to Target If You Have a Hire to Hurt Recruiting Strategy