Training Your Competition

[KristineS]

Would you hire someone who told you in a job interview that they were saving money to start up a business that would be in competition with yours?

This question came up on another forum the other day. The people on that forum run screen printing and embroidery shops. One guy was asking what he should tell prospective employers since he already did that sort of work on the side and hoped to open his own shop someday.

I said, if it were me, I'd appreciate knowing. I'd also want to be sure he wouldn't steal my customers or my techniques, so I'd want an agreement in place so that couldn't happen without penalty.

How would the rest of you handle it? Would you hire the guy?

[vangogh]

I wouldn't be too worried and wouldn't have a problem hiring the person. It depends on the job of course, but most of the people you hire, particularly for lower level jobs in your organization, aren't going to stay forever. At least the person who's thinking of becoming your competitor is going to be interested in the job.

There's no knowing that person will start a competing business either.

However if I were a prospective employee I might not say I was hoping to become a competitor one day. I have a hunch most people would see it as a threat. I would want to get across my interest.

It's a tough call on both sides. I can see pros and cons for the person looking to get the job and the person looking for the new employee and I suspect different people will respond to the information in different ways.

[Evan]

I wouldn't hire them. You lose trust for them and will become suspicious of what they're doing. While you cannot expect your employees to stay with you forever, and perhaps moving on to a competitor (or starting their own business), one shouldn't note that. It, of course, depends on the size of the company.

If you were WalMart and somebody said they wanted to do such a thing, you could just laugh it off. If you're a small shop and things are tight, the last thing you need is more competition. So I guess it could depend on your financial situation. Furthermore, it depends on what you're giving them access to. If the employee was making t-shirts, that's fine. But I wouldn't let them near the customer list.

Non-compete agreements seem fine, but they're only as good as their enforcement.

[orion_joel]

I think that this sort of situation could be used to the advantage of the person already in business. Which from your original post i don't think they were the one asking.

However if i was the owner of a screen printing/embroidery store, i would see this as a good thing, because the first thing i would come back with if they mentioned wanting to start their own business is. "Maybe that is something that we can look at helping you do in the future."

Now some of you may see where i am going with that. Essentially i would put in the mind of the new employee that i want him to succeed which i would, it would also mean that when he does really get to the point of wanting to open his own business he is more likely to discuss it with me, and take advice i give. This would also give me an opportunity to help him set up his business in a location that will not directly compete with me, eg i operate on southside of city, i help him setup on northside of city. If i find that he is a good worker and i think that he could do well in his own business, i would maybe even consider offering to partner with him, to help him get a start and in addition this would mean i am expanding my interest.

This may not be the path that everyone would want to take and would not always be something that everyone could afford to do. However it does kind of help to turn the tables in your favor and give some chance that you are not going to have someone on payroll that you know is going to some day ditch your business and go and compete on the next corner.

[Steve B]

I make all employees sign a non-compete agreement. And, yes, I would definitely enforce the agreement if it were violated. In my business, a non-compete will be limited to my geographic area.

If they wanted to start a similar business outside of my area I would have an arrangement with them as a consultant. Then, I would show them everything they wanted to know and be available by phone for a period of time. In that case, I wouldn't be hiring them, they would be hiring me.

[Aaron Hats]

I wouldn't hire the person. Plain and simple. I worked too hard to get where I am and some of my contacts/vendors took me over a year to find.

[KristineS]

What concerned me is that, on the other forum, some people chimed in and said don't tell him that you're planning to start a competing business, and just steal all your employers knowledge and customers.

Personally, I think that's just wrong. I'd prefer someone who was up front to someone who was dishonest.

[vangogh]

It's definitely wrong to go in and steal knowledge and customers, which is likely why so many here wouldn't hire the person. I might not go into the interview saying how my plan is to open a competing business at some point, but I don't think I'd go out of my way to hide the fact either.

Like it or not a lot of people you might hire over the years will have ideas of going into a competing business. Let's say I decided to hire another web designer as my business grows. I wouldn't hold any allusions that that person will work for me forever and I would expect after leaving my employ the person would still be working in the web design field. That wouldn't stop me from hiring the person though.

[Steve B]

That's a good point. We may be hiring future competitors whether or not they admit it. They may not even know it at the time, but might fall in love with the business and want to do it on their own someday. That's why a lot of companies have them sign a non-compete as a matter of routine.

I know a guy that went and get a job with every one of his competitors - learned all their prodedures, then quit and formed his own company. He was quite universally hated in his area.

[vangogh]

Hmm? I wonder why no one liked the guy.

It probably depends on the type of business you run as to how much hiring your future competition will be a problem. Not that I'm looking to hire anyone at the moment, but I assume anyone I do hire is looking to compete with me at some point. I'd also think that they'll learn what they need to compete with or without me. However, if I served as a mentor they may not be so quick to compete directly with me.

Besides I'm competing with other web designers now anyway. What's one more. I think my success has more to do with what I do and don't do than it does with what my competitors do and don't do.

Andy like you mentioned if it is an issue you have them sign something preventing them from competing with you for a certain time after their employment ends.