LinkedIn boss is wrong about poaching rivals' employees

In the 1970s you could buy a hippy-ish poster of a bird flying towards a lurid sunset, with the maxim: "If you love something, set it free: if it comes back to you, it's yours; if it doesn't, it was never meant to be." I assumed the slogan had expired along with a taste for joss sticks and tie-dye T-shirts. I am amazed to find it has instead become a formal human resources policy.

I blame Reid Hoffman, co-founder of LinkedIn, the business network. He has fleshed out his self-serving manifesto for "managing talent in a networked age" into a slim book, The Alliance . It is full of examples of how companies now arrange loose, short-term "tours of duty" with staff, actively encouraging them to saunter off to other employers, on the basis that everyone will eventually benefit.

When I criticised Mr Hoffman for promoting potentially unhealthy career promiscuity last year, two groups of critics took issue with me. One group said LinkedIn's chairman was merely acknowledging reality. After all, a survey of emerging leaders by London Business School recently revealed that nearly 40 per cent of this younger generation start new jobs already planning their next role. A tiny minority expects life-long careers at the same employer.

A second, more cynical bunch of critics pointed out that as companies had not exactly shown much fidelity to their employees, they could hardly blame staff for selfishly pursuing their own interests.

But while consultancies and other professional services groups may have an interest in seeing their alumni move on to become potential clients, elsewhere competitive juices stimulated in the normal course of business can quickly turn to bile.

Most leaders will authorise all available methods, from money to menaces, to catch and cling on to their best staff - even in California, where the "set them free" slogan probably originated.

"Non-compete" clauses are virtually unenforceable in Silicon Valley. They stifle mobility and creativity, according to the Kauffman Foundation, an entrepreneurship think-tank. But the market for software engineers is febrile, so employers turn to other ploys to curb job-hopping. Some 64,000 engineers have sued Google, Apple, Intel and Adobe Systems for forming a different type of alliance - to stop the companies poaching each other's staff. The companies themselves (plus Intuit and Pixar) settled a Department of Justice lawsuit in 2010, ruling out further such agreements. A judge is deciding whether to approve the $324m settlement in a civil suit between the ex-employees and the companies. (Intuit and Pixar settled earlier.)

Along the way, some interesting email exchanges have come to light. In 2007 the late Steve Jobs emailed a smiley-face emoticon to one of his HR executives after learning from Eric Schmidt, then Google's chief executive, that the search engine company had terminated a recruiter for trying to headhunt an Apple engineer. Another 2007 exchange shows Google once had a policy of making counter-offers within an hour to staff approached by Facebook (which was not part of any pact).

Employment lawyers outside California say employers are generally more relaxed about defections than they were 10 years ago. But in high-stakes cases they have "a lot more desire to be difficult", says John Evason at Baker & McKenzie in London. "It can be quite personal sometimes," he adds.

A US arbitration panel has just ruled that BGC Partnersshould compensate competitor Tullett Prebon in a dispute over a 2009 "raid" (Tullett's word) that led to 80 interdealer brokers switching employer. BGC claims its rival has spent more fighting the case than it has won back.

Under threat, companies are armouring contracts with tougher non-solicitation clauses and upping the caratage of golden handcuffs for senior staff. After Angela Ahrendts quit Burberry for a job at Apple, with a stock grant of up to $68m, the fashion company's board approved a £20m deal for Christopher Bailey, her successor, to stop him potentially jumping to a rival. Burberry shareholders rejected the package .

Leaders are increasingly expected to grit their teeth and smile when executives quit for rivals. Some even claim it is a compliment that their highly trained stars are in demand elsewhere. But most managers are still likely to treat poaching as an almighty pain in the neck, not a feather in their cap. It should be no surprise if they act to prevent the practice, rather than letting it all hang out, 1970s-style.

[email protected]: @andrewtghill

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