Seven Signs Your Employees May Be Poachable.
By Michael Greco and Christopher Stief
Wednesday, 8th June 2011
A recent survey by Manpower suggests that employers across the country are planning to increase their hiring during the second quarter of 2011.

Will they be hiring your best people away from you? Putting it another way . . . are your employees poachable? Consider the following:

1) Is employee morale down?

If so, it may not be long before the word is out. With the use of social media growing exponentially, there are more ways than ever before for recruiters to find out which employees are fed up with their companies and ready to tiptoe out the door. You need to know if your employees are unhappy before your competitors do. Don't wait until they are broadcasting their discontent on social networks. If you are unclear about how your employees feel, conduct an internal survey to measure morale before it's too late.

2) Is upheaval shaking up your industry?

The hospitality industry is facing increased regulation on several fronts: a shortage of willing and qualified unskilled labor; mergers and acquisitions; changes in management companies; and uncertainty about tomorrow's profitability. In the face of this, employees are more apt to want to leave to find a more stable environment. With fluctuations based on uncontrollable factors – the general economy, natural disasters like last month's floods or the BP oil spill, and the high cost of gasoline – that certainly applies to the hospitality industry.

If your property is in transition, don't leave your employees guessing about what's going on. Be open and honest. Employees who feel like they are being kept in the know feel more loyalty to their companies and are less likely to bolt for the door when turbulence is afoot.

3) Are you experiencing turnover at the top?

CEO turnover is higher than it's ever been. Unfortunately, unrest in the upper levels of management can cause a chain reaction of defections. Employees may either want to follow their old boss out the door or may feel that a new manager is chasing them away. Changes at the top are inevitable. But when one occurs, consider how managers closest to the General Manager, Director of Sales, or Director of Food and Beverage will respond. Will they likely be relieved or more willing to leave? Conversely, try to involve top managers in the decision-making process to replace their leader, where possible.

4) Are your employees well trained or specialized?

Having the best of the best employees is a blessing and a curse. A popular exchange rounding the internet these days between a fictitious CFO and CEO reads as follows: CFO to CEO: "What if we train our employees and they leave us?" CEO to CFO: "What if we don't and they stay?" The fact is, employees with highly specialized expertise, like special language skills or culinary fame, are probably the most poachable of all. Your competitors will be pleased to find talent with fine-tuned skills and low-learning curves, and they may believe such employees are well worth the risk of litigation.

If you're investing heavily in training, invest equally in retention by rewarding employees. But, don't focus solely on money as a motivator. Provide personalized options. Some employees, especially younger ones, might choose flex-scheduling options, an open policy on shift swapping, or transfers between locations over a plump paycheck; these employees may well be worth catering to.

5) Is your competition moving in?

If your competitor has opened a new restaurant down the street, they are probably making a beeline for your back door. It's cheaper to poach your servers than to recruit and train new ones. Now is an optimal time to let your employees know that you care. Take steps to make their job at your company the "best opportunity." Make work meaningful for your employees – support and participate in organizations, groups, and charities that are important to them. Recognize and appreciate employees' efforts. Be sensitive to cultural differences or languages. In other words, create a workplace where employees feel cared about, valued and respected.

6) Do your employees have confidential information?

Employees who embody your service, such as sales managers and meeting planners, can be prime candidates for poaching because they often have contacts that may be willing to come along for the ride, exponentially boosting the employee's value. Remember that your client list may qualify for trade secret protection. And of course, you should protect your company with suitable restrictive covenants. But the best prevention is to keep your employees happy.

7) Are you sharing the bounty?

During the recent economic downturn, many hotels and restaurants were forced to tighten their belts. In turn, employees were asked to make sacrifices. Many employees responded favorably because they were grateful to have a job, and putting in a few extra hours or foregoing an annual raise was viewed as a reasonable sacrifice to remain employed in a difficult economy. But as the economy rebounds, employees are taking notice. As your profits increase, are you sharing the bounty with employees?

Sharing the bounty does not always mean paying employees a bonus or giving them a raise. Consider offering employees special training opportunities. Ambitious employees are always looking to improve themselves. Are you providing them with training opportunities to expand and sharpen their existing skills, improve their understanding and value to the entire operation, and structuring cross-training to expand job enrichment opportunities?

In this environment where many employees are looking for a change and recruiters are happy to oblige their wishes, non-competes are not optional. When used in conjunction with competitive intelligence and retention techniques, you can have a comprehensive strategy to fendoff intruders from absconding with your valuable talent, trade secrets and clients during these precarious times. Let your employees know you care, and cater to their interests.

Of course, some employees are always going to choose to join a competitor. For these departures, it is important to be prepared with a plan of action. Let us know if we can help.

For more information contact the authors at mgreco@laborlawyers.com, cstief@laborlawyers.com, or 610-230-2150.

Mike Greco is a partner in the Philadelphia office. He litigates and provides counseling nationwide to employers concerning legal claims and issues arising from the movement of employees between competitor firms. These issues include: covenants not to compete, non-solicitation and non-disclosure agreements, unfair competition, employee raiding, trade secrets, duty of loyalty, Computer Fraud & Abuse Act, Economic Espionage Act, and state trade secrets and unfair competition statutes. His experience includes representation of clients in the securities brokerage, health information technology, medical practice, computer sales and distribution, commercial window washing, personnel placement, online retailing, insurance brokerage, insurance, publishing, direct response television, radio, institutional food services, and freight forwarding industries.

Chris Stief is the managing partner of the Philadelphia office, and is Chair of the Firm's Employee Defection and Trade Secrets Practice Group. He has a national practice concentrating on issues of employee defection and recruitment, including litigating injunction and damages actions relating to: covenants not to compete, non-solicitation and non-disclosure agreements, unfair competition, employee raiding, trade secrets, duty of loyalty, the Computer Fraud & Abuse Act, the Economic Espionage Act, and state trade secrets and unfair competition statutes. He has represented clients in numerous industries, including securities brokerage, private banking, online retailing, radio, software, computer sales and services, consulting, medical; insurance brokerage, insurance, employee placement and staffing, publishing, advertising, trucking, direct response television, government contracting, and mortgage lending and securitization.

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