The tech industry is infamous for talent poaching, especially of top talent. In an attempt to reduce the constant swinging door in Silicon Valley, Apple, Google, Intel, Adobe, Intuit, and Pixar signed “non-solicitation agreements” between 2005-2007, to prevent one another’s recruiters from cold-calling their employees with job offers.

The six tech giants were sued soon after for doing so, as such anticompetitive agreements are illegal in the USA’s free market, and they settled with the Department of Justice on September 24, 2012. Today, talent poaching remains as much of a reality in the tech industry as it was ten years ago.

The Threat

Particularly dangerous for established tech companies are “unicorns,” startups with over $1 billion valuations. According to CB Insights, a research firm that tracks startups, there are more than 124 unicorns companies. Uber is one such young hotshot.

Especially for engineering roles, Uber is known for tempting important hires with generous compensation packages. In 2014, Uber offered millions of dollars in restricted stock units to some highly sought-after engineers from Yelp. Uber is also known for targeting Google’s developers.

Uber targeted and systematically hired Google’s experts in mapping technology as part of the livery service’s plans to reduce its reliance on outside companies for mapping. Uber has also gone after tech talent in Google’s Geo unit, hiring at least a dozen mapping specialists over the course of a year. Even among executives, Uber has succeeded in wooing talent away from Google. In June 2015, Uber hired Brian McClendon, a Google vice president for engineering, to lead their driverless car and robotics research center.

Uber isn’t the only unicorn company with its targets set on Google’s employees. In 2015, Airbnb poached more than 100 employees from Google. The intense competition for its employees has incited defensive measures from Google. Offers from a short list of companies, including Uber and Airbnb, along with Pinterest and Palantir, frequently produce counteroffers from Google. The most senior Google employees might also get a one-on-one meeting with Google co-founder Larry Page, to try to persuade them to stay.

Google has lost its fair share of talent to poaching, but not for want of resistance. Unicorn companies and young startups have an inherent advantage over more established companies, however, in their speed of operation. “In one case, I replied to a recruiter on Thursday. I was interviewing on-site by Saturday, and I had an offer by Monday,” said Rodrigo Ipince, a 28 year-old software engineer who recently left Google for a mobile gaming video start-up, Kamcord. In the absence of entrenched bureaucratics, new companies can sign new talent faster than their competitors can react.

The threat is even coming from companies who are not traditional competitors. Wall Street is now pulling talent from the same limited pot that the tech industry is already fighting over. In March 2016, Bridgewater Associates, the world’s biggest hedge fund firm, announced that it had hired Jon Rubinstein, a former Apple executive, as new co-chief executive officer. “We needed to bring in an exceptional co-CEO with a strong tech focus to supplement the existing leadership,” Bridgewater wrote in a note to its clients. “Technology is pervasively important at Bridgewater, especially since one of our major strategic initiatives in the coming years is to continue building out the systemized decision-making that has been so successful in our investment area and to extend it to our management as well.”

Other financial firms are similarly attracted to tech talent. Two Sigma Investments, a New York quantitative trading hedge fund firm, poached Alfred Spector, then Google’s vice president of research and special initiatives, to join as its chief technology officer. Bill MacCartey, formerly a senior research scientist at Google, left the world renowned search engine for BlackRock, the world’s biggest asset manager.

In a desperate attempt to hold on to tech talent, companies are trying ethically-questionable but legally-passable strategies. “Many companies even put in place aggressive anti-poaching mechanisms, like secret hiring agreements, to prevent their top talent from being lured away” said Rephael Sweary, president of WalkMe.

The Reality

But is talent poaching harmful? Some in the tech world don’t believe so. “Talent poaching can be a net positive if it's practiced at a wide enough scale, breeding a more innovative workforce” said Sweary. As workers move between companies, they gather more diverse experiences and a more diverse skillset than they would have likely acquired at only one company. If grudges aren’t held and exits are made gracefully, they also bring contacts from previous positions to their new positions and create a more interconnected industry, in which ideas can flow more freely.

But if that sounds idealistic, that’s because it is. While companies like Google can afford the losses they sustain when top talent is wooed away, some companies cannot. Executives from Mission Motors, a now-defunct firm that built electric motorcycles, blame the company’s demise on losing its top engineers to Apple. “Mission had a great group of engineers, specifically electric drive expertise,” said Derek Kaufman, former CEO. “Apple knew that—they wanted it, and they went and got it.”

So how can companies legally and effectively protect themselves against talent theft, while also taking advantage of opportunities to win the talent they need?

Read the full article on the Happie blog to find out!