Employees Joining Client's Co. - Doc Download

Dear Seniors,

This is a case that is causing serious problems for one of my friends. He owns a software development company. Nowadays, it has become a regular occurrence for him to see his employees resigning from his company and joining his clients' organizations. What are the different ways to stop this?

Yes, it's true, and obviously, they can move for their career growth.

1. You should plan for employee engagements, motivate them, and give rewards and recognitions.

2. You can stop them by signing a bond at their joining time.

3. You should have an eye on employees who are more interacting with the clients.

Can we add any clause to the NDA which says he cannot join any of the clients he is working with?

I had heard this once (from my former employer) that you can sign a bond with your client regarding the same. Please find out from some expert....

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I had heard this once from my former employer that you can sign a bond with your client regarding the same. Please find out from some expert....

You should firstly make anti-poaching agreements with your clients so that they will not appoint your employees if approached. This reduces half the trouble. Next, you should establish an exit procedure and enforce it by making your appointment orders more stringent concerning the exit procedure. Finally, you should offer benefits/compensation packages to your employees to prevent them from seeking more lucrative jobs as soon as they join you. To achieve this, consider providing both a regular salary and a variable salary comprising incentives that reward good work and penalize poor performance. Once this is in place, both the employee and your company could thrive better.

Dear,

You should improve your policies. You can have an internal contract with your clients stating that they should not appoint your employees. If you have any agreement as suggested, that would be illegal. Any contract that restrains someone from engaging in any trade, business, or profession is illegal.

Regards,
J. S. Malik

Dear,

First of all, understand why they are leaving you and joining your client's company. Work out a strategy and make course corrections in your systems, facilities, and even compensation.

As a smart guy, you can contact one of the employees of your client and find out what the differences are and act accordingly.

As rightly mentioned by some of our friends, you can have an agreement with your client that they should not poach and induct your employees or even for a minimum of one year after leaving your company. This may resolve your issues.

Thanks and regards,
Kameswarao

Hi,

You can formulate an agreement with the client stating that they can't appoint any of your employees until six months after their resignation. Mention the same information in the offer letter to employees as well to avoid such situations.

Dear [Recipient],

You can prepare an NDA for your clients as well as for your employees. Please find the attachment for the NDA format.

Thanks,
Shivani

Hi,

Before initiating any action, it is advisable to conduct exit interviews to try to find out the reasons for the frequent turnover of employees. Based on the conclusions of the exit interviews, necessary remedial action should be initiated.

Thanks.

The best thing your friend must have done long back is to sign a 'non-poaching of employees' or 'a non-hiring of each other's employees' bond with all your clients.

Let me know if you need more help.

The agreement/contract between the client and the service provider is a mutual understanding and not shared with employees, even during rejection in interviews, if the case arises. I have noticed many MNC companies in India and the US taking up such measures.

Dear,

You can get a contract with the employee stating that they should not join the client's organization within six months of leaving our organization. Try to avoid direct contact with clients, and there should be a code for your client to avoid exposure. You need regular monitoring for this. Please alert your HR department.

Best Regards,

Sajid Ansari
Delhi

Hi all,

Thank you very much for your suggestions. He already has an anti-poaching agreement with the client, but he cannot proceed legally with the client because the client is too big and this guy will be nothing to him. It's a small company of 15 employees.

The reason for the employees leaving his company is that they are lured by the brand image, pay, and perks of the client company. Despite paying bonuses to the employees after every project, awarding the best employees, and organizing employee engagement activities like get-togethers and birthday parties, this is still happening.

I also advised him to engage employees in making decisions, generating new ideas, and awarding the best ideas, but it was of no use.

As others have suggested, here are some things your friend could do:

1) Sign a separate non-poaching agreement with his clients.
2) Include a non-poaching clause in every agreement.
3) Talk to the clients and request them to refrain from hiring your employees because it would impact the completion of the work you are doing for them. One of the large ITES companies (a banking BPO) in Vizag has agreed not to hire anyone from smaller local BPOs until and unless the candidate has received a relieving letter from them (local BPOs). They did not need to and could have just ignored the troubles of the small companies, but they were nice enough to understand.

In addition, another alternative your friend could try is to talk to the client(s) and reach an agreement with them. He/she trains his employees, and when they are found to be good enough to be hired by his/her client(s), they (client) pay him a recruitment fee.

Maybe your friend is good enough that this can become a second line of business – turning the competition for resources into an opportunity to make money.

Good luck to you and your friend.

Hello,

One of our employees has resigned and joined our competitor company. We have not signed any NDA or any type of agreement. Are there any laws based on which we can prevent him from joining? Can anybody guide me?