How to prevent client poaching

It's not uncommon for clients to steal employees, in any industry.

It is not uncommon for clients to steal employees. They do so because they see them as valuable assets who will bring in more revenue than what it would cost to pay them in-house.

Businesses are always competing with each other to get the best talent. They have to fight for the best employees and clients. The competition is so fierce that some companies resort to poaching and poaching is a very unethical practice.

It is also not uncommon for employees to find a better offer with another company that can provide more benefits.

Employees can also leave to create their own business in the same industry, but when they leave, they often take your clients with them. This can be problematic if your business relies on a certain number of clients to generate income.

1992 case of Colour Control v Rando.

Two employees of a commercial film and photographic processing and printing business left their employer to set up in competition with them.

Prior to leaving, one of the employees, a senior manager responsible for obtaining new work for the business, lined up work from a prospective new customer before resigning. She hid the fact from her employer and pretended that her employer had not got the contract from the prospective client.

She then left with a fellow employee to set up another company and performed over $100,000 worth of work for the new prospective client. The other employee who had left his employment to set up a company with the other ex-employee and told his employers he was taking holidays in the Philippines, then proceeded to use his holidays to set up the new company.

Here's what happened next...

The case is significant because it looked in detail at the types of remedies available to employers when employees have poached clients and breached their duties.

The two employees in the company were ultimately found guilty of breaching those duties and ordered to pay an account of profits, i.e. the profit they derived as a consequence of carrying out the work poached from their former employer of $41,000. The case is significant because it brings together a wide range of causes of action.

Source - https://www.tved.net.au/

Here's some preventative measures:

Don't openly talk about your rates in front of your employees

In an interview with Forbes, a human resources professional said that one of the most common mistakes employers make is openly talking about their rates in front of employees.

This can have a number of negative consequences for the employer.

First, it may make the employees feel like they are not being paid fairly and this can lead to low morale and higher employee turnover.

Second, it may lead to an increase in poaching from other companies who are willing to pay more for talent.

Third, it may also lead to less referrals from satisfied clients who want to work with them again because they will be afraid they will be undercut by their competition.

Build a strong company culture

Some companies have found success in offering the same benefits, compensation and work-life balance that their competitors offer, but with one difference - the company culture.

The culture of these companies has been shaped by their founders who have always believed that happy employees are productive employees.

These founders know that it takes time to build this culture and so it starts from day one when the company was founded. Employees are offered an opportunity to be part of something bigger than themselves and this is what motivates them to stay with the company even if other offers come their way.

Allow for flexible work-life balance (Using a Shifts App)

We all know the benefits of flexible work-life balance. The idea that we have more time to spend with our families and children, or that we have more time for social events and leisure activities.

But in order to achieve this balance, you need to be able to work full-time hours as well as part-time hours. And then there's the issue of getting your employer on board with this idea.

That's why companies are introducing shift applications like Zoho Shifts, an app which will allow you to apply for shifts according to your availability and preference. You can set your availability based on days, times, and number of hours you want to work per week.

Create an employment agreement

Employment agreements are a great way to ensure that employees will stay with your company. When they know that the company is invested in them, they are more likely to stay.

Some of the reasons why employment agreements work so well is because it helps set boundaries and expectations for both the employer and employee.

Under the employment contract; that is, the employee must perform such tasks for the benefit, and only for the benefit, of the employer and not for their own personal gain.

In return, the employer must provide the required rewards and compensation to the employee.

An employment agreement can be written or oral. If an oral agreement is made, it should be recorded in writing as soon as possible after. Written agreements are also generally easier to enforce than verbal agreements, they can easily be created using templates through contract/sign applications.

Some of the things that should be discussed when creating an employment agreement include:

• Length of time in which both parties are contracted
• Salary and benefits
• Expectations from both sides.