What If I Train My Employees And They Leave For Competitor? Part 2

People meeting with thought bubbles over their heads

 

Yesterday I wrote about the reply the George Business Advisor GPT gave when asked the question: “I’m worried about training up my employees and then they leave for competitor. What should I do?”

The GPT gave a comprehensive answer which went along the lines of:

  • Creating a supportive and growth-oriented work environment to foster employee loyalty,
  • Offering competitive compensation and clear career paths,
  • Utilising legal protections like non-compete agreements and NDAs carefully, and
  • Fostering a positive company culture with continuous learning and feedback to attract and retain the productive employees you want.

And the best response came from Phil Bedford and a couple of others who asked:

“What happens if you don’t train them…. And they stay?”

And that’s the crux of the issue.

Many business owners paralyse themselves and get stuck in their businesses because they are terrified if they upskill their employees they will go off and become competitors.

I’m not saying it doesn’t happen but the benefits of upskilling your employees and being able to step back and focus on growing your own business far outweigh the one or two employees who might turn into competition.

Let me give you an example from my previous career as a sell-side institutional FX broker.

In our GCC FX markets we only had a very limited amount of potential clients for our business (think the treasury desks of major Tier 1 banks). So you had 8 – 9 brokers asking every client for the same trades at the same time.

As you can imagine the relationship with the banks your broker team had were critical.  If a team or key person walked off and joined a competitor you would lose a 6 to 7 figure business in a heartbeat.

So we had Non-Compete agreements in place.

But those were not enough.

We also had gardening leave which was a way to pay employees to stay out of the market for 90 days.

Non-competes were hard to enforce but gardening leave was pretty much ironclad because the brokers were not allowed to quit immediately but once they tendered resignation they were 90 day notice periods where they remained an employee. 

And as an employee they could be subject to non contact and non trading restrictions.

Anyways, that is the background.. and what did I see and experience?

During gardening leaves, the business often created new and/or maintained the relationships with the banks that would have been disrupted by the original member(s) leaving.

This included banks creating relationships with brokers they hated but which they did anwyays because the original person they spoke with was stuck on a beach for 90 days.

Now what’s the takeaway here?:

First, no business went down the drain even when a whole team left. Sure there was short term pain, but in general the business adapted and continued to grow.

Second, your business most likely has a much bigger market and pool of customers than we did in sell-side GCC FX. So even if your employee leaves (and it makes no sense to have a gardening leave policy in your case) the market is big enough to most likely absorb both of you.

Third, and this I have seen often.  When an employee leaves on good terms to join a competitor they can potentially become collaborators at the same time and begin sending business over that they cannot handle themselves for whatever reason.

I’ll cut this short as you have other things to do today but feel free to reach out to me if you have any questions regarding this topic.

And for those of you in Dubai, this topic and others like it are questions we tackle in our Business Masterminds and Hot Seats.  Our next session is this Friday, 16th of November at the Deck Restaurant in the Palm. Doors open at 4 for networking but the event starts at 6. 

Sign up here to join us and experience the power of tapping into the collective wisdom of your fellow business owners.