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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.

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.''

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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