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December 13, 2017

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Should You Hire from a Competitor?

In a perfect world, it would make sense to hire someone who’s already doing a superlative job for a direct competitor. After all, why re-invent the wheel if you can hire someone who’s already familiar with your unique marketplace of products, services and customers?

Well, sometimes everything falls into place and you’re able to capture talent from a competing organization and the person meets or exceeds expectations. But more often, the process—and the results—make for a less than satisfying experience.

So, let’s talk about some potential logistical roadblocks. The first is whether a person working for a competitor can join your team without legal complications. As you know, most companies have non-compete agreements. Whether or not they’re enforceable isn’t the issue. The issue is whether a candidate is willing to get caught up in a legal matter that may involve a reputation, a career and a potentially ruinous financial consequence.

I recently lost a Director of Sales placement in which the hiring company’s legal counsel assured the candidate he was in the clear; and if necessary, they would fight any preventative action taken by the candidate’s current employer. Unfortunately, despite all the assurances, the candidate felt it just wasn’t worth the risk to himself and his family.

Another common roadblock is location. Some jobs can be performed from a virtual office, in which case location isn’t an issue. Or, your company may be lucky enough to have several competitors within a commutable distance.

But in a situation in which it’s critical to have the person report to work in your office, hiring from a direct competitor can get pretty dicey.

I recently filled a VP position with a client company based in Kansas City, which is a huge metro area with a well-educated work force. For a manufacturer that competes with hundreds of other companies that make a similar product, you’d think they’d have at least a couple of direct competitors within a hundred mile radius. But they don’t.

So, we started our search for a qualified candidate with the understanding that the person would need to relocate.

Unfortunately, with factors such as an uncertain housing market, cost of living differences, spousal careers and all the intangibles, including kids, schools, health care and so forth, people are simply more resistant to change in location than I’ve seen in the last 30 years. So, in my Kansas City search, I was unable to find a candidate from a direct competitor who was willing to relocate, even though the salary was generous and the VP title seemed attractive. In a moment, I’ll tell you how we filled that position in Kansas City.

Familiarity and Contempt

But there’s another factor aside from logistics that may curb your enthusiasm for hiring people from like-kind companies.

I’m sure you’ve heard the old saying that familiarity breeds contempt. While it’s great to hire from within a community where everyone knows each other, too much in-breeding can seriously dilute your organization’s gene pool, especially if what your company really needs is a transfusion of new blood. When everyone knows each other, it tends to breed complacency. So, be careful not to become a zombie company, drained of the life-sustaining energy needed to thrive in a global market.

Now, back to the Kansas City company. Since there were no local competitors and we were unable to attract someone from far away, we carefully adjusted the position requirements and hired a local candidate with enough of the essential qualities to do an outstanding job and still bring a fresh perspective to the team.

As appealing as it might seem to hire from a direct competitor, it sometimes pays to be careful what you wish for.

- Bill Radin

Bill Radin is one of the most popular and highly regarded trainers in the recruiting industry, and has trained many of the largest independent and franchised recruiting organizations, including Management Recruiters, Dunhill, Sanford Rose, Snelling and Fortune Personnel. His speaking engagements include the NAPS national conference, the annual Kennedy Conference, and dozens of state association meetings and network conventions, including Top Echelon and Splits.org.

www.billradin.com