Understanding Poaching Agreements: What Are They and Why Do Companies Use Them?

What is a Poaching Agreement?

Can anyone help me to understand this concept? A company is asking for this before making a corporate recruitment agreement with us.

I do not know much about you, but from the post, I believe you work as an HR Consultant focusing on Recruitment/Headhunting. Normally, recruiters have tie-ups with many companies, so there are lots of vacancies that you work on. You know a lot of people, including some internal talent as well.

Understanding Poaching in Recruitment

Basically, poaching is the term used when a recruitment agency tries to recruit an employee from one of its clients at another client's request. This is also known as headhunting. Client companies usually ask for a no-poaching agreement with recruiters to ensure that the time and money invested in hiring, training, and developing an effective employee is not wasted by them being poached by competitors.

I hope this clears up any doubts you may have.

Understanding No-Poach Agreements

It is a no-poach agreement. Let's assume 'X' is your client and you sign a no-poach agreement with them. Now, if your other clients need candidates, you cannot recommend any employees working in 'X' for this offer.

I too have signed no-poach agreements with a few of my clients. I don't have this no-poach agreement with a few other companies; still, I don't recommend candidates working with my existing clients to another client, irrespective of whether a no-poach agreement exists or not.

In case a candidate resigns on their own from a company, which happens to be my client, what I used to do is write an email to HR and get their NoC before presenting the said candidate with other offers. (This again applies only if at least 2 months have passed since the last working day). If a candidate approaches before the expiry of 2 months, I straight away tell them no.

No-poaching agreement is presently a contract between the recruiting agency and the firm. Soon, hopefully (but improbably), there will be a 'gentlemen's agreement between two companies who will not poach into the other company. This is when the companies are doing similar business. If one goes through the IT industry HR retention, one sees maximum attrition!

Many years back, in the airline industry in India, there was a lot of poaching between airlines. This was when many airlines started up (2005-06 - SpiceJet, Kingfisher, Go, Indigo, Paramount) and the market was deficient in skilled manpower (including Pilots). There was a lot of poaching until the regulator (DGCA) stepped in and issued a rule that Pilots should give a six-month notice before leaving an airline for joining another.

Regards,
Rajusiachen

There exists a no-poach agreement between two companies operating in the same industry. A few of my clients, while sharing the job description, also provide names of two or three companies from which we cannot pull candidates.

On the other hand, I have also seen organizations that are open to hiring candidates working in other companies that are part of the same group. They don't even ask for a No Objection Certificate (NOC) from the HR.