How do you stop your outsourcing suppliers poaching the best talent?

I work for a large retailer. We do a lot of work with outsourcing suppliers and consultancies. A consistent problem is that these suppliers tend to poach our brightest staff. Their pockets are deeper than ours. How do we retain our best people and also keep our suppliers sweet?

The question

I work for a large retailer. We do a lot of work with outsourcing suppliers and consultancies. A consistent problem is that these suppliers tend to poach our brightest staff. Their pockets are deeper than ours. How do we retain our best people and also keep our suppliers sweet?

Include non-poaching clauses in the contract

Roger Rawlinson, Director of consultancy, NCC Group

When dealing with a supplier, the interface can be considered at a contractual and a relationship level.

A supplier wants to sell you something. Regardless of how the deal is presented, there is a customer who pays for the supply of goods and services. For this to take place, there needs to be a relationship that enables the two organisations to work together.

A healthy relationship means that both organisations communicate, co-operate and understand each others' needs. Suppliers poaching key staff suggests that the relationships are not particularly good. This is an area that you need to review and work on. Meet with your suppliers and share your concerns, let them know that you will be considering alternative options.

If a relationship breaks down, then the contract comes into play. The contract is a legal agreement detailing commitments of the supplier and customer. When negotiating a contract you need to add non-poaching clauses. The supplier may resist this, but you should be negotiating contracts during the procurement phase, when the deal is still competitive, and you are the customer setting out the terms to the supplier community.

Ideally, a contract should not need to be invoked, but when a relationship breaks down it is your lifeline. Time and effort spent negotiating the contact is a sound investment for times of trouble.

Ensure staff understand the benefits of staying put

Peter Leadbetter, director, business advisory services, Ernst & Young

The need to retain critical talent is an ongoing challenge across the retail sector, as indeed it is across most vibrant commercial organisations operating within an organic market. The reality is that outsourcing suppliers will understandably seek to use their deep pockets to entice suitable staff from whatever source, including their clients.

For the host company, there is a need to have in operation a robust talent management process that has an underpinning clarity and honest pragmatism around why their staff should stay with them. In essence, the exam question is: why should I stay here and not accept the offer to move to the outsourcing supplier, their culture and their opportunities?

The answer has to lie in a proposition that outlines the longer-term developmental opportunities, the pull of the user company's culture and, finally, the incentives. In my experience, younger staff especially are looking to develop their skills, experience and ultimate marketability, rather than moving for cash incentives alone. Organisations need to operate an internal public relations campaign that defines and reminds staff what they are getting out of staying, with a longer-term perspective. Leaders of the host company play a critical role in this area.

At the point where an outsourcing arrangement appears on the horizon, particular efforts designed to address the potential impact proactively, rather than reacting to aggressive actions, are needed. If you value your staff, make sure they understand why and what is in it for them.

Suppliers should be keeping you sweet

Chris Potts, director, Dominic Barrow

I understand that you want to keep a positive working relationship with your key suppliers, but I am not sure that you should be aiming to "keep them sweet" if they are poaching your staff. You are, after all, the customer in the relationship, and it is the supplier that should be bending over backwards to keep you sweet (unless you have become too dependent on them).

Where there is any risk that a supplier might poach your people, your company lawyers should address this in your contract with them - defining what "poaching" means and stipulating what the consequences will be if it occurs. Equally, you should explore with your lawyers and HR people the scope for including a provision in your contracts of employment that would help any key employee who is thinking about moving to a supplier to make the best decision, without stipulating unfair terms of employment.

There is an ongoing skills shortage in the IT market, therefore the higher-skilled people are in demand and will attract a higher price. Beyond making sure that you have your contractual foundations in place, take a look at how you manage and reward performance, so that you can more afford to pay your best people their market price.

Also, explore the impact of the working environment, company strategies, management style and job roles on people's feelings about working for your company. Competing for people is not always just about money.

IT industry's staff churn comes full circle

Ollie Ross director of research, The Corporate IT Forum

Do not take it personally. This is not about you, your sector, or the way you work. And it is not just about money. It is about new challenges, new skills and new opportunities - and it is all part of the IT industry's constant churn.

Eventually it comes full circle, and your brightest ex-staff come back into the corporate user-marketplace upskilled and with a better understanding of how the supply industry works and what it has to offer. In the meantime, bear in mind that the clichés of providing a healthy work/life balance and positive company culture are sometimes actually true.

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