With relative frequency, our recruiters come across organizations that believe it to be an advantageous strategy to recruit from their competition. This is understandable. On the surface, the strategy appears to carry merit. Employers assume that those who have experience in a field will need less ramp-up time, less handholding from management and will have a greater likelihood of staying with the organization.
Unfortunately, closer analysis of the seemingly advantageous recruiting approach will prove it all but illogical. Via using our common sense, we can illuminate the risks and disadvantages involved for organizations seeking to hire sales professionals directly from their competitors.
Analyzing a Sales Representative’s Reason for Leaving
When we analyze the reason for a competing business development representative wanting to leave their current organization, we run into several red lights that beg further analysis and questioning. Eventually, they will all but disprove the theory that recruiting sales reps from direct competitors has advantages.
If a sales representative is doing well at a competitor, in the overwhelming majority of cases, there is no advantage for that individual to leave for a parallel position. Conversely, for those who are struggling, there are a multitude of advantages to consider direct competitors.
Many sales representatives know that competitors are an easy way to get a bump in salary (whether it be from their new employer or via using a competing offer as leverage against their current hiring manager).
Until a hiring manager can really dig at these issues during an interview process, there is little reason to believe that that new employee will prove to be an all-star. Experience has shown us the direct opposite. Over the past 10 years, our business development headhunters have seen little correlation between a sales employee’s ability to succeed and direct pertinent experience in a field. There are poor vendors in every industry just as there are a multitude of subpar sales representatives.
Ethical and Legal Issues
If a sales representative provides significant reasoning for their departure, there are more variables that need to be addressed. The next logical question is regarding whether the new prospective employee has a non-compete clause. Often, sales representatives who are effective are required to agree to a legal formality that prevents them from operating against their employer in the near future.
Employers who understand HR law know that they are able to circumvent the non-competes because they are rarely enforceable against employees. While there may not be an ability for a past employer to take action, there still are ethical questions that need to be raised.
Common sense will tell an employer that if a sales representative is willing to break an agreement with a past employer and attempt to convert clients, it is more than likely that the employee will repeat their actions. This behavior does not exist in a vacuum.
If the employee does not plan on approaching old clients, this:
1. Immediately limits the amount of prospects they can approach.
2. Begs the question as to whether the individual has the resiliency and energy to start their book of business from scratch.
Clients Rarely Follow Sales Representatives
Unfortunately, the defiance of logic in this recruiting approach goes even further. Let’s say that a sales representative claims they have a large following of clients that they can bring over to their new company. That would, again beg the question as to why are they leaving?
Regardless, an overwhelming majority of companies are hesitant to switch solutions based upon a sales representative moving companies. Even though the sales representative may claim that there are a multitude of unhappy clients at their current company (and their claims may be true) chances are those clients would have gone somewhere else if they weren’t locked into some form of contract.
Moreover, people try to avoid making the same mistake twice. That means that unsatisfied clients are much less likely to consider or trust the sales representative a second time pending things didn’t go as planned during the initial run of doing business.
If these clients were unhappy and were not locked into a contract, there are 15 other firms vying for their business. They would be long gone or in the process or moving on (again, with a negative viewpoint of the company and, more likely than not the sales rep).
Pending they do still trust the sales rep., time is another factor working against that new business development employee. Odds are high that the former clients have already actively approached alternative solutions (most of the time, they are well into the sales process with other firms providing another significant hurdle). While there are exceptions to the rule, there are not enough to warrant substantial revenue generation via a new sales employee’s old book of business.
The Most Successful Alternative to Recruiting From Direct Competitors
Over the past decade, we’ve seen employers have significantly better luck recruiting sales employees from a similar industry, rather than a direct competitor. In most cases, the employer will receive the basic benefits that come with recruiting from direct competition (i.e. less ramp-up time, knowledge of and experience selling to the target market without the ethical or legal hurdles that exist).
Moreover, individuals who come from parallel fields overcome in fresher than those with exact backgrounds providing the new employer with a fresh perspective on the business.
