Nearshore Americas

Nearshore’s Moral Dilemma: When is Poaching Acceptable?

Recruiting is a demanding industry. The financial perks of placing a candidate are high, but the pressure to do so is intense. And while demand is rising, recruiters are being pushed to bring in the best talent from a pool that does not seem to be growing. In this climate, poaching is rising and in-company anxieties are also climbing.

“Personnel from companies I work with are telling me that they’re worried about keeping hold of their talent,” Sebastian Hoyos, IT Recruitment Lead at CTI Consulting in Colombia told Nearshore Americas recently.” The same recruitment companies that are bringing talent into companies are also taking them out again.”

Recruitment Squeeze

The post-Covid-19 digital push is intensifying the need for well-experienced tech professionals across industries. Quality professionals who can speak English are being tapped by US organizations that need extra muscle to support their growing digital infrastructure as they shift from legacy to cloud systems. 

Companies searching for value-adding personnel will pay handsomely for the right fit. According to recruitment firm Top Echelon, recruiter fees can be as high as 22% of the employee’s annual salary. In general, the labor market is being squeezed hard, with the US Chamber of Commerce noting the “monumental challenge” employers are facing as they grapple with the most serious dearth of workers in a decade.

In tech, the shortage is even more severe. This is raising questions of ethics for recruiters. Is poaching ethical? When is it OK to offer new positions to candidates a recruiter has already placed? When should loyalty be placed above money?

Ethical Poaching?

Standard recruiting contracts between a company searching for a new employee and a recruiting company or freelancer stipulate a period, usually of six months, for which the candidate has to stay within the position. If the candidate leaves before those six months are up, the recruiter is obliged to find a replacement. However, the day after the six month period ends, the candidate is ‘fair game’.

Sebastian Hoyos of CTI Consulting

“Six months after the contract with one candidate, they can sign another with their employer’s competitor,” Hoyos explained. “Talent has the right and freedom to go where it wants, but I’m not in favor of recruiters taking talent out of companies soon after having placed them. Those candidates shouldn’t be touched. But that does happen, a lot.”

For  industry stakeholders, poaching is simply part of the game. The one way to make sure that the most valuable talent assets do not leave a company is to reward them well with perks and benefits. The most valuable perk at the moment is remote working, says Bloomberg. Second-tier cities like Miami are becoming tech hubs for that very reason.

But recruitment in Nearshore is made tougher by the additional demands it requires of employees. The cross-border nature of the industry means hiring companies want advanced English language abilities, as well as ‘nice to haves’ that include the understanding of client relations in the US. For leadership roles, these ‘nice to haves’ become musts. While a major Nearshore market like Mexico graduates 130,000 tech engineers in comparison to the US’ 100,000 annually, few meet all the requirements. This pattern is repeated in neighbouring countries.

“In Colombia there are tons of Senior Q&A engineers, but many can’t be considered for roles because they don’t speak English,” Hoyos said. 

The talent pool problem persists, and some recruiters recycle their candidates, pushing software developers from one gig to the next every six months. In 2018, far before the pandemic, LinkedIn reported that millennials in Silicon Valley switched jobs twice as much as the US national average. That frequency is likely to have become more pronounced. 

But Juana Cervio, a specialized tech recruiter and co-founder of HumanosReales in Buenos Aires, says that moving talent around too frequently is never a good idea. 

“They’ll stop being your client. Aside from the ethics, it simply isn’t clever to do from a business perspective,” she said. 

And companies are not afraid to act decidedly if they feel they are not being treated fairly. “Some well-known companies have blacklists of specific HR companies or freelancer recruiters they will not work with. Usually it’s because of previous bad experiences,” said Cervio.

Hoyos agrees, and points out that recruiters have a responsibility towards both companies and candidates: “Candidates know we make money out of them and if they feel they’re being moved around too much they will say that; they have their CVs to consider too. We are charging companies a lot of money to bring someone on board who will be a match, not only culturally but also salary-wise and in other aspects, and this requires time.”

Ways to Avoid Poaching

So how can recruiters get around avoid a potentially immoral urge to poach? For Hoyos, it’s about having a full pipeline of candidates, and being completely fair in dealing with those tech workers who do not quite make the grade.

“I’ll explain to those Senior Q&A engineers whose English meet requirements that they should go away and study, and I’ll be back in touch with them in a year.”

Juana Cervio of HumanosReales

Juana Cervio says that networking and utilizing strong industry links is vital to get that placement. Organizations do not give one recruitment agent or HR company exclusivity over vacancies, and so one recruiter will find themselves competing against other teams from companies like Hays and Michael Page. In a tight spot, former clients can be helpful. 

“Previous candidates can suggest colleagues or friends with the skillset needed,” she said. 

Mid-Term Increase

The pandemic has increased demand for all technology roles, but the recruiters that demand only growing. Complicating the English-speaking Nearshore world is the arrival of major Spanish-speaking corporations, also looking to grab talent. But that doesn’t change a recruiters moral obligations to client and candidate, says Hoyos.

“Last year was a tough, tough year. Companies like Mercado Libre entered the Colombian market aggressively, and they have very deep pockets. They want the best talent from the best companies because they have the resources to acquire them. But over-using the candidates as a headhunter is not the right way to go,” he said.

Peter Appleby

Peter is former Managing Editor of Nearshore Americas. Hailing from Liverpool, UK, he is now based in Mexico City. He has several years’ experience covering the business and energy markets in Mexico and the greater Latin American region. If you’d like to share any tips or story ideas, please reach out to him here.

1 comment

  • In the context of American companies, in your opinion, who would come out ahead in attracting or retaining talent? The organisations that rely on a nearshore strategy or the ones that implement non location based compensation and pay the same to engineers no matter what country they live in or were born in?