During the good times, management energy is rarely expended on worrying about any violations of executive-level employment agreements when hiring new executives. But during downswings, companies are hawk-eyed. For these companies, market share plays a very important role that the management has to be extra vigilant about.

Poaching C-suite executives: the considerations

In retail, recruiting top talent from competitors has long been the standard procedure. However, in today’s protective environment, whoever is involved in the retail executive search must weigh the costs and benefits of poaching a C-suite executive, especially with regard to the defensive backlash.

Beyond experience, industry veterans have the advantage of bringing to the table valuable connections within their niche, including contacts that can greatly add value to a company. Additionally, they also bring on board longstanding relationships with bankers, vendors and other resources that are worth pursuing. However, companies headhunting for top executive hires should be careful not to simply employ candidates with impressive credentials but who have proven poor in management.

Legal considerations

Understanding the legal complexities of an executive hire is very important, especially in the retail industry, which needs to guard its proprietary information. With increasing competition from e-commerce and other brick and mortar players, alongside high executive staff turnover in recent years, retailers are becoming increasingly defensive over their sensitive proprietary information. As such, they are taking steps to identify every aspect of their businesses that contains confidential information and taking the necessary measures to safeguard them.

Since we are living in a very protective business operating environment, it is important for anyone who’s considering poaching a top-level executive to be informed early on of any protective contracts. If a hiring company knows the existence of a noncompeting agreement or any other restrictive covenant, it will be able to weigh the benefits and costs to make an intelligent decision.

Minimising conflicts

Of course, to limit incidents of bad blood developing between companies and with a soon-to-be-former employer, departing executives are encouraged to maintain a positive working relationship in the workplace and resist the temptation to paint their former employer in a bad light. 

For departing personnel, the best approach is to always articulate that the decision was actuated by the existence of a career opportunity in the rival company. It is recommended they verbally express appreciation for the value they’ve gained with the company and wish their colleagues well in their future endeavours.