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BEST PRACTICES
Keeping Head-Hunting Pests
At Bay!
Companies may be getting rid of the
dead-wood, but they are as keen as ever to protect their most valuable
employees from the eyes of the competition. Here's how.
By Seema
Shukla
It is late afternoon, and after an
hour-long chat with one of the company's key employees, Reckitt
Benckiser's Vice-President, hr, Gurveen Singh, walks him to the door and
gives him a final pat on the back by again telling him how valuable he is
to the company. That's pretty much what she has been doing for the last
hour. Why? Because although the manager hasn't told her anything, she
knows he has received feelers, maybe even an offer, from a rival company.
Ego massaging sessions have become routine
for hr professionals like Singh these days. The manager she's just led to
the door was the second such case today. Says Singh: ''Usually people do
not come and directly tell you they have been approached for a job. They
drop hints about what is happening at rival firms, stories of peers doing
well in other companies... Once I sense something, I react by spending
time with the person, explaining his future role and value to the
company.''
Singh has even devised a nine-box matrix on
which she maps her company's key employees in terms of potential and risk
of leaving. If a person is a high performer with a high risk of leaving,
Singh goes on overdrive with the milk and honey. Of course, pampering and
pep talks is just one part of what high-profile companies like Reckitt are
doing to retain talent. Good old hard cash is often the best medicine. A
couple of years ago when Reckitt lost its Vice-President, marketing, to a
rival company, it introduced a formal contract for its senior employees
where they were paid a hefty sum for not joining the competition. In her
own contract, Singh says she has undertaken not to join the competition.
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Once
I sense something, I spend time with the person, explaining his role
in the company.
Gurveen Singh
V-P (HR), Reckitt-Benckiser |
Fighting For Talent
Ironical as it may seem, even as a slowdown
afflicts corporate India and mass retrenchments become the norm, companies
across several sectors are battling it out trying to protect their really
valuable managers from abandoning ship. Explains R. Suresh, Head, Stanton
Chase, an international search firm: ''This is paradoxical. On the one
hand, corporates are retrenching to keep costs under control. On the
other, they are stretching that extra bit to retain key managers.''
For some, it has meant a no-holds-barred
combat. When Sanjay Jain, Country Manager, Accenture, a consulting firm,
realised his company was being raided-a competitor was calling employees
across the board offering placements in the US-he immediately called up
the rival's CEO and issued a stern warning. ''I told him to stop or be
prepared for a retaliation. '' Jain says he came to know that recruiters
were picking up copies of his company's internal directory from the
reception to get names and phone numbers of potential hires. The
directories have since been removed from the reception!
Poaching (targeting and hiring one or two key
employees from a rival firm) and raiding (targeting a competitor's pool of
employees) are relatively old practices. But now both activities have
intensified and, over the past five to six years, search firms have
entered the fray.
ANTI-POACHING
TECHNIQUES |
Co-operation
Agreements: Two or more companies agree to
not touch each other's employees
Access
Restrictions: Gatekeepers
are trained to screen calls and block access to organisation charts.
Mock Raids: Mock
recruiters and fake recruitment ads are used to identify weak links.
Benchmarked
HR Practices:
Better HR practices will always be a
magnet for employees.
Retention
Bonus: Cash-incentives
linked to years in service.
Employee
Contracts: Employee
promises not join the competition (at once) and also promises not
the hire his/her former colleagues.
Tit-for-tat
threats: Threats of legal
action or reactive behaviour could stop some
poachers.
Empanelled
search firms: Hiring the
competition's recruiter or retaining more than one search firm could
help.
Reporting
Bonuses: Cash incentives
for employees who report offers they receive.
Information
Security Protocol: Employee
are trained not to give out information about reporting
relationships or contact details; all calls of this nature are
referred to one person only.
Firewalls: The
intranet is mole proof. |
Though most cringe at being called 'poachers'
or 'headhunters', the fact remains that many aggressive tactics being used
in the market have been introduced by them.
Most search firms have large research teams,
whose sole function is to dig up information on people and spot the good
performers. A few firms boast they can get anyone's mobile and home phone
numbers within half an hour. Their methods often pay scant heed to
established ethics. At Satyam Computers, A.S. Murty, Director and
Vice-President, hr, became suspicious when three senior managers told him
that they had all got calls from a lady who said she was from the
Confederation of Indian Industry (CII) and wanted to invite them to a
seminar. But when she began asking them about their job details, they
smelt a rat. One of the calls the lady made was to a cell-phone. Murty
passed her number over CII, which tracked her down. She later admitted she
worked for a Delhi-based head-hunter.
Defending The Fortress
With the battle for talent escalating into a
war, companies are going all out to retain their prized employees.
Generally, companies follow two approaches. The first is internal and
includes improving communication, changing work rules, increasing pay and
even tightening phone security. The second method is external and focused
on blocking the raiding firm. Two years ago Pepsi even went to the extent
of filing a case against Coke for poaching its employees. Says Abhiram
Seth, Executive Director (Exports), Pepsico India, ''The case had the
desired effect: the company (Coke) has become more cautious.''
Increasingly, companies are identifying their
star performers and then going to war trying to retain them. Explains
Murty of Satyam: '' Identify the ones you really want to keep, about 20
per cent of employees, and bond strongly with them.'' Sometimes companies
stage mock raids where they get their own people to pose as recruiters so
that they can identify the weakest targets.
Once the stars are recognised, then companies
take good care of them. Eicher, the Delhi-based automotive group, has a 'Keyman
policy' in place. This is an insurance policy from LIC for top employees
and comes with a rider: if the person stays for an agreed duration he
earns a certain amount but if he leaves before that, the company gets a
larger amount.
Non-monetary practices, like exit interviews,
can also act as early warning signals. Existing employees that were
targets of a raid but did not leave can be an important source of
information. Some US companies like Agilent Technologies offer 'reporting
bonuses' to employees who inform the management when competing firms
attempt to contact them.
In India too, companies are becoming
pro-active. Retention bonuses, where employees are offered bonuses if they
don't leave the company, are now more common. At jeep and tractor maker
Mahindra & Mahindra, 50 per cent of the employees' bonus is in the
form of a fixed deposit that can be encashed after a mutually agreed time
period. When Bausch & Lomb announced its intention to sell its
sunglasses division, it knew recruiters would hound employees. It offered
key employees worldwide a stay-on bonus. When the French company PSI-Bull
decided to sell its Indian operations (bought by the Birla Group), it
offered deferred benefits to key employees.
Keeping People Happy
While monetary benefits like bonuses can
help, in the long term, companies can hope to retain talent by focusing on
the workplace. Says Dileep Ranjekar, Executive Vice-President, Human
Resources, Wipro Corporation: ''Ultimately, the employee is looking for
job content and to further personal ambitions.''
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No
matter what you do you cannot stop people from approaching your
employees.
Arun Sehgal
Regional HR Director,
Gillette |
The most harm to a company can come when an
employee joins the competition. Some companies insist that their employees
sign undertakings to say they will not join the competition-a popular
practice in the Indian two-wheeler industry as well as among FMCG arch
rivals like P&G and Hindustan Lever. Says Atul Sobti, Senior
Vice-President, Sales and Marketing, Hero Honda Motors: ''Non-poaching
agreements are unwritten. For instance, our employees know that they would
face problems in joining Bajaj Auto. In such cases, some of them first
join a third company and then, on the bounce, go to the competing
company.''
Sometimes when the poaching and raiding
fervour heightens, it could be time to call a truce. When Arun Sehgal,
Regional hr Director, India and South Asia, Gillette, found that a
competing firm had hired three of his people in quick succession, he
called up his counterpart at the company. Both men reached a mutual
agreement not to target each other. Of course, such arrangements aren't
fool-proof. Says Sehgal: ''No matter what you do you cannot stop people
from approaching your employees.''
Blocking The Predators
Then there's the cosy club of industry
leaders who've evolved their own informal codes. For instance, in Mumbai,
Harsh Goenka of RPG, Harsh Mariwala of Marico, Anand Mahindra of M&M,
Ajay Piramal of the Nicholas Piramal group and Mukesh Ambani of Reliance
are believed to have an informal pact not to poach from each other's
companies.
Some companies try to foil poaching by
signing up several search firms. When a company uses a search firm it
usually means that it won't become a target (of that search firm) itself.
By using more then one search firm, companies ensure that they are
off-limits. Explains Suresh of Stanton Chase: ''But search firms have
caught on and do not agree to keep them off limits unless there is a
critical mass of business.''
Other extreme responses include
counter-raiding and, in some cases, even lawsuits. In developed markets
like the US, companies have actually begun allocating budgets for
anti-poaching and anti-raiding measures. Although that may seem futuristic
in India, it could be just a matter of time before anti-poaching expenses
show up on the balance sheets.
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