Should You Hire from a Competitor?
by Bill Radin

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In a perfect world, it would make sense to hire someone who's already doing a superlative job for a direct competitor. After all, why re-invent the wheel if you can hire someone who’s already familiar with your unique marketplace of products, services, applications and customers?

 

Well, sometimes everything falls into place and the person meets or exceeds expectations. But more often, reality gets in the way.

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First, let’s talk about some potential logistical roadblocks. The first is whether a person working for a competitor can join your team without legal complications. As you know, most companies have non-compete agreements. Whether or not they’re enforceable isn’t the issue. The issue is whether a candidate is willing to get caught up in a legal matter that may involve a reputation, a career and a potentially ruinous financial consequence. I recently lost a Director of Sales placement in which the hiring company’s legal counsel assured the candidate he was in the clear; and if necessary, they would fight any preventative action sought by the candidate’s current employer. Despite their assurances, the candidate felt it just wasn’t worth the risk to himself and his family.

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Another common roadblock is location. Your company may be lucky enough to have several competitors in the same metro area. Or not. I recently worked with a client company based in Kansas City, which is a huge metro area with a well-educated work force. For a manufacturer that competes with hundreds of other similar companies, you’d think they’d have a direct competitor in the area, but they don’t. So, it seemed certain that the only qualified candidate would need to relocate.

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Unfortunately, with factors such as an uncertain housing market, candidates with two-income households and all sorts of intangibles, including kids, schools, in-laws, health care and so forth, people are more resistant to change in location than I’ve seen in the last 30 years. So, in my Kansas City search, I was unable to find a local candidate from a direct competitor or any depth of talent outside the Kansas City metro area willing to relocate. While it’s true that in our hyper-connected world, some positions are location-neutral. But when you run a business, you may not want a virtual candidate managing a brick-and-mortar office. In a moment, I’ll tell you how we filled that position in Kansas City.

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But there are other factors aside from logistics that may curb your enthusiasm for hiring people from your competitors. Let’s say a competitor sells similar products as yours to the same customers at an equivalent price point. Fine. But if they sell through stocking distributors – and you’ve historically sold directly to your customers – then that competitor’s sales manager may not speak the same sales language as your constituents. And that illiteracy – or change in the way you do business - could negatively affect your sales force and your customers.

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Finally, I’m sure you’ve heard the old saying that familiarity breeds contempt. While it’s great to hire someone from within a community where everyone knows each other, too much in-breeding can seriously dilute your organization’s gene pool, especially if your company needs a transfusion of new blood. When everyone knows each other, it tends to breed complacency. So, be careful not to become a zombie company, stuffed to the gills with industry retreads.

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And the Kansas City company? Since we couldn’t change the location of company, we adjusted the position requirements and hired a local candidate with enough of the essential qualities to do an outstanding job and bring a fresh perspective to the team.