Recruiting Realities, Poaching Pitfalls
Every industry has a labor problem. Every industry must consider how to do business anyway.
In the fenestration industry, add the booming construction market, increased costs and challenges with attracting a younger generation, and the stakes to find employees are very high. As a result, it is more commonplace for employers to use recruiting agencies and attempt to attract employed talent to fill open positions.
An article from ERE Media, a resource for human resources, talent acquisition and recruiting professionals, suggests employers change their “recruiting strategy from an unemployed candidate focus to one that emphasizes poaching currently employed talent,” citing that “currently, 96.1 percent of the workforce already have a job, so that means they must be drawn away from their current firm.”
How to Keep Employees Happy, Beyond Pay
Money is rarely the primary reason people leave a company, according to both recruiter and industry sources. Clear communication about the vision of the company, forward progress in achieving it and displaying an appreciation for the contributions made by individuals will serve companies well in keeping employees satisfied and loyal. Consider also the following factors that play into employee satisfaction:
- Company culture
- Workload
- Continual training
- Incentive bonuses that are paid in the future
- Understanding and flexibility
- Clear room for career progression
- Room for engagement and input
- Use of technology within the organization
Within this industry, there are varying opinions on the effectiveness and even on the integrity of using recruiters or “poaching” employees. Stories also vary greatly for companies that have recruited employees or had employees recruited from them, but there is one constant: employed candidate recruitment is a reality for most.
“Companies just need bodies,” says one source. Businesses win job contracts without enough people—or the right people—to complete them. Offering a big salary to bring someone on to do the work is often a necessity. However, as another source points out, “[making] short-term decisions out of desperation can cause a domino effect of issues and affect the cultural balance across the industry. This doesn’t help the guy who just closed a huge job and doesn’t have someone to do it, but they need to think about it.”
Whether through recruiting employed candidates or improving the workplace to keep current employees, all companies are faced with the dilemma of how to keep up in a fast-paced construction environment. It’s up to management and owners to be alert to the realities and be open to change.
Recruiting realities
For recruiters, driving up the numbers is not necessarily the intent or the goal of recruiting employed candidates. “My best partnerships are with strong internal teams who are focused on long-term strategy including retention,” says Thomas Chambers, executive search partner, SaxonCantrell Executive Search.
Also, Derek Moore, director, Building Products Division, The Mattran Group, says, “just as a company aggressively competes for the best customers or projects they pursue, they need to put forward the same level of effort to attract top talent if they want to thrive.” Both sources emphasize the importance of a thorough and organized interview process for both skills testing and culture fit before bringing someone on.
If the recruiting process is performed ethically with the best interests of all parties in mind, the result should be a win-win, recruiters say. Individuals who are seeking change can improve their quality of life, and the employer may see benefits in cost reduction or an increase in sales.
“Job postings only reach those looking for a job, whereas poaching seeks out those who are the best fit for a job,” says Chambers. “Poaching is a sensitive topic for management teams and human resource departments, but it should not hold a negative connotation. Employees … have the right to change pastures if they feel the grass is greener on the other side.”
Using recruiters can also help companies minimize mis-hires. According to “Topgrading: The Proven Hiring and Promoting Method That Turbocharges Company Performance,” by Bradford D. Smart, PhD, the cost of a mis-hire is five to 24 times that of the person’s salary when lost opportunity costs are factored in. Much of this is due to making hiring decisions based upon emotions rather than using objective, performance-based criteria, according to Moore.
In addition to vetting candidates for hard skills, a good recruiter will also vet candidates for cultural compatibility and long-term growth. A good recruiter can typically produce a short list of qualified and interested candidates vetted for mutual compatibility inside of two to three weeks depending upon the situation and criteria, sources say.
Still, concerns are valid. The high cost can be a hindrance for many companies—headhunters can charge at least 25 percent of a hired employee’s annual base salary—and there’s a possibility of recruited employees soliciting their past coworkers from their previous employer. Recruiting also has the potential to drive wages higher due to labor competition. This could lead to salary bubbles within industries, particularly construction as it is dependent on economic factors. Additionally, company management should be aware of the legal issues surrounding recruitment and poaching, such as non-compete agreements.
Non-compete agreements
Non-competes have been a standard in the technology and sales space for quite some time. And while many in this industry go unenforced, they are becoming more prevalent. According to Chambers, the increasing prevalence of these documents could be due to the investment companies are putting into hiring. “[Proper] onboarding and training new employees, whether they are previously employed or a recent grad, takes a good bit of time and money. Many organizations, therefore, ask new hires to voluntarily sign non-competes preventing them from working with a direct competitor.”
A non-compete is a contract between an employee and employer, prohibiting an employee from engaging in a business that competes with the current employer. The enforceability of these can vary greatly from state to state and are not enforceable in all 50 states.
Recruiter sources advise employers to look beyond direct competitors for transferable skills to avoid non-compete clause problems. On the opposite end, employees should understand that no employer can force an employee to sign a non-compete agreement. However, they may terminate or choose not to hire without a non-compete.
Looking within
In a building environment with too many jobs for people to complete and many more positions than bodies to fill them, it’s no surprise that companies are trying every way possible to find and train people to keep up. Strategies such as swift hiring to fill a gap, hiring for talent over fit and offering salaries and bonuses that aren’t sustainable can cause more trouble than they may be worth.
Sources urge industry companies to look within—train from within, evaluate company culture, take a self-assessment. Losing employees represents an opportunity to evaluate and improve the workplace, they say. “Continually losing talent to the competition should be considered valuable market feedback. It’s a sign from the market that something in the company needs to change,” says Moore.
It is increasingly difficult to find experienced workers for industry jobs—leading to a culture of more common employee poaching. Sources say they have also found young people adapt more easily than someone who has experience at another company. “Trying to force our culture to new people isn’t going to work. We have to change our mindset to work with newer generations.”
As previously stated in this series, companies must look to untapped labor pools and think outside the box to train workers in-house and find enough people that can adapt to company culture. “You have to be creative and offer the right package [that considers] perks, benefits, salary, training, path to advancement, the opportunity to be heard,” says one industry source. “You also have to be willing to invest time and money into a person to develop them. If you do that right, the chances of high-quality employees jumping ship are very small.”
Stories from the Trenches
Whatever the feelings toward using recruiters and poaching employees, the reality is there are too few workers in a hot market. To paint the picture of this situation and what companies are doing to thrive regardless, below are a few anonymous—but very real—stories from the industry.
A Blind Poker Game: One Dealer’s Experience
An anonymous dealer source used three recruiters to hire talent. Recently, one of those recruiters hired an employee to another firm. “As far as I understand it, because they have placed people here, we are supposed to be on a do not call list. They are not supposed to reach into my company to get people,” says the owner. Then, the recruited employee, prompted with a finder’s fee, recruited two additional people from the dealer. “One person being recruited cost me three people,” says the owner.
The situation has softened some, but the company’s employees are being contacted by recruiters every day. “Then we have to sit down and negotiate with staff. But it’s like a blind poker game; you’re not sure whether they’re being spoken to or not, or just making a better deal for themselves,” says the owner.
While the fallout of this situation stings, the owner gets it, in a way, due to the current work environment. “You need people to get the work done. There’s nothing stopping someone from looking at an employee’s W2 and offering a 20- to 30-percent bump in pay. Because they need people.” The owner has also used recruiters to attract employees away from competitors, offering the same type of deal. “The people have to come from somewhere,” he says.
Seeking the Best for All Parties Leads to an Unlikely Partnership
A window manufacturer lost its most experienced and successful sales rep to a top customer during the economic downturn. He was offered a guarantee of previous salary, which his employer had cut in half. To replace him, the window manufacturer owner called another top customer to hire their top sales rep. “Those were the toughest phone calls I ever had to make,” says the company owner. “We're personal friends. But in the downturn, people’s mindsets had to adjust.” He says the current labor market is very similar.
However, the owner says trading people can be a win-win for everyone involved when everyone is professional and seeking the best for all parties. “My employee came to me with his new offer. The employee would continue selling the manufacturer’s product but on a different payroll.” The customer initially bristled at the idea of his top sales rep moving, but “he readily agreed when he realized he wouldn’t be paying for someone who would continue selling our product for him,” relates the owner.
Ultimately, the original sales rep came back to work for the manufacturer after the salary guarantee couldn’t be met, and the replacement was hired away by a large competitor. The back and forth and open communication channels led to a partnership between the window manufacturer and the competitor.
Contractor Gets an Eye-Opener
A large contracting company has had multiple employees within the last few months receive recruiter emails that managed to get around custom filters. “They all shared the emails with me, and they’re not looking to move,” says a co-owner of the company. “But it's happening out there, because no doubt there’s a shortage of people.” Additionally, he says, “I get a lot of resumes sent to me from a lot of recruiters, but it’s the same half-dozen resumes. They’re all representing the same people. The quality and quantity of candidates is very low right now.”
The contracting firm has had employees poached. “In all honesty, sometimes it comes down to money. You can’t match it and have to say good luck. We’ve been taken advantage of that way by a customer, so I couldn’t do anything about it anyway.”
The situation was an “eye-opener” for management, leading them to ask questions like: what are we not doing right? Are we not empowering? Are we not meeting needs? If it’s so great here, why did they go? “Decide how to improve for next time, so there isn’t a next time,” says the owner.
The contracting firm also works with recruiters to tell them about outside employees who have approached the recruiter firm with a desire to leave. “Then we’re open to talk. There’s a big distinction between luring someone away with big dollar signs and finding a better situation for someone who is unhappy.”
