Secrets of Silicon Valley Poaching

Silicon Valley employee poaching is a notorious practice that practically every major company has involved themselves in at some point. On the face of it, this seems incredibly unethical. But when you dig deeper into the issue you will realize that poaching is key to how the Silicon Valley employment market works, and it has even provided the community with many advantages not found elsewhere.

It Happens…But You Won’t Know About It

Not all poaching is so brazen and blatant. Reports and testimonies from former employees have revealed that in many cases companies will have secret hiring agreements in place to protect top talent. It’s far from the Wild West that many portray. You can’t just have money and decide to launch a business with poached talent. Most top talent is protected with binding contracts.

Poaching has Helped Employees

The culture of poaching has provided Silicon Valley employees with benefits they wouldn’t find elsewhere. One of the concepts you really need to know is that poaching has inevitably led to many companies being forced to offer lucrative and wide ranging benefits.

For example, some employees are even offering to help their new hires with student loan repayments, in lieu of pensions. There are also additional breaks, better working conditions, and better prospects on top of that.

Companies Will Go to Great Lengths

Major companies like Apple, Google, and Adobe are just some of the companies caught up in huge anti-trust lawsuits. Cases like these demonstrate the lengths that so many companies will go to so they can get the best talent. There are stories of talent being approached in the streets on their way to work, although they were never proven, but the reality that these stories even exist reaffirms the original point.

Organizations Will Work Together…for All the Wrong Reasons

Frequently referenced, Apple, Adobe, Google, and Intel were forced to pay a $415 million bill for their role in an anti-trust scheme. In this case, they agreed with each other not to poach each other’s employees. This sounds like an act of good will on the surface, but really it was a method of calling a truce so they could target other smaller companies.

Think about it like this. These four companies created a ‘no-poach’ list. If they need more employees they will hunt down the talent from other third-party companies. Over time this would inevitably lead to a hoarding of talent and any company not partaking in this agreement would struggle to survive because of it.

Poaching has become so important that huge companies are willing to break the law to benefit themselves.

And they Don’t Always have the Best Interests of Employees at Heart

Another aspect of the case mentioned previously is that these same companies were also keeping the wages of their engineers artificially low so they could save money for their businesses. Previously, these employees would simply go elsewhere, which is what happened in the past. That level of competition is what has pushed employee wages ever higher.

As part of the agreement, these four big companies knew that they wouldn’t be competing. That meant if one of these engineers wanted to leave, they would find it much harder because other companies involved in the agreement wouldn’t offer them a job.

It just goes to show that although employees get better working conditions their employers aren’t happy about it.

The Situation Has Changed Little

Just because some companies in Silicon Valley got stung it doesn’t mean that the situation has changed. The methods have changed, but companies are still competing against and working with each other. Don’t be surprised if yet another lawsuit relating to anti-trust laws and poaching appears in the next few years.

The 2011 lawsuit, however, did change one thing. Talent raiding became hotter than ever. It only exasperated the problem and it made starting a cheap business much more expensive. One could argue that it’s only cemented the positions of the big companies operating there.

Is this a good thing?

That depends on which side you support. But what is obvious is that the most competitive market in the world has a dark underbelly.



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