Moving between employers who don't recruit from each other?

Question

I'm working in the IT industry with a fairly niche technology (to the point that there are only three local major employers using this technology and "everyone knows everyone"). I'm content with my current workplace (one of the above mentioned employers), so I'm not actively looking for other opportunities. There's also a gentlemen's agreement between me and my employer that if I want to leave, I tell him, so he can make arrangements (a year ago I was unhappy, ready to leave, told him, then things improved). Anyway, from time to time I'm approached on LinkedIn, this time by one of the other above mentioned major employers.

I admit I wasn't clear enough with the recruiter that I'm not looking for a job change, so she organized an interview. I made it clear during my interview that I wasn't actively looking for a new job, I'm just exploring this opportunity, but anyway, at the end of the interview they asked me what my salary expectation is - I answered with a 10% higher value than my current salary (and expected that's way too much for them). However, they answered with a salary offer that's 10% more than even my expectation. Now this offer is quite tempting (the family budget is quite tight while my wife is between jobs) - but the hiring manager said there's a gentlemen's agreement between my current employer and him that they don't "poach" each other's employees, don't try to recruit directly. He's willing to take me nevertheless, but I had to pretend I'm switching jobs on my own.

At this point I'm not quite sure what to do. I presume the recruiter did not know about that gentlemen's agreement, so she acted in good faith, but it will look like one of the gentlemen's agreement can't hold if I'm leaving. I'm leaning towards declining this offer even though the money would be really good. I'd like to avoid any bad blood between everyone involved - as there are only these few employers in this niche, it could hinder my future employment. I know this is up to me to decide, but I'd like to ask: have you ever been in similar situation? How did you decide? Is there an angle that I haven't considered yet?

Answer 1

You should feel free to take the job. Your biggest responsibility is to your family and it sounds like the increased salary would help.

Maintaining a good relationship with your current employer sounds wise. (It's a decent thing to aim for by default. In a small local market, you may benefit in future by maintaining a good reputation.) Offering a longer than normal notice period to help give time to recruit a replacement for you might help you with this.

You should also be honest that you were approached by a recruiter. Then leave him to decide whether this has broken or merely bent his gentlemen's agreement. Either way, you have done nothing wrong - you were not party to this agreement.

Answer 2

You don't say where you are so it's hard to take local norms into account, but this "gentleman's agreement" to not poach employees is anti-competitive. It is a way of suppressing wages across the industry - your case being a prime example (you are considering not taking a 20% wage increase). Such agreements are illegal in my country (the UK) and other countries.

I don't see any ethical dilemma. If the new job is attractive, then take the job.

Answer 3

There's also a gentlemen's agreement between me and my employer that if I want to leave, I tell him, so he can make arrangements

That one too is not a gentlemen's agreement.

It's a rhetorical promise asked under pressure. It's a nice offer, and I don't blame your boss for making it, but it's also a manipulation technique to a degree. Did you really have the option to say 'no' to that? No, of course not.

No one in their right mind would respond: "Thank you, but if my pay is not what the market offers, I'm not making you any promises. It would just be safer to give me a raise commensurate with my value to your company every single year from the very beginning, instead of waiting until I'm dissatisfied and already looking to go elsewhere." The power dynamics simply do not allow for that kind of answer.

but the hiring manager said there's a gentlemen's agreement between my current employer and him that they don't "poach" each other's employees, don't try to recruit directly.

Regarding this second (most likely illegal) agreement between the other company and your employer, make sure this internal recruiter has the firm backing of their own CEO or their VP. You may even want to insist on a binding legal contract before you're willing to give your notice.

You don't want your offer to be reneged on once you've already given your notice period or once you're unemployed. This can happen and it sucks.

UPDATE:

As far as I know, a couple of years ago (before I joined the current company) 25% of the software developers moved between these companies in the same direction as I might move and that kind of ruined the mood between the management for a while. The "no-poaching" agreement was a result of this issue.

In a small niche field where there are only three local competitors, it's normal that the domain-specific employees go back and forth between those three companies during the full course of their careers.

And yes, if your company is not offering a competitive salary along with a form of golden handcuffs such as generous deferred compensation or generous deferred stock options (depending on if your company is private or public), your company is probably going to lose many more of its domain-specific employees to its competitors than it is able to hire back from them.

With that said, be extremely careful and be paranoid.

Given the previous history between these two companies and given what the recruiter has told you about their "friendly" backroom agreement, you should insist on an ironclad contract that offers you compensation should they back out on their agreement to hire you.

In other words, do everything you can to not become a casualty of their backroom deals. You may even want to hire a lawyer to review the contract before you accept it.

I answered with a 10% higher value than my current salary (and expected that's way too much for them). However, they answered with a salary offer that's 10% more than even my expectation.

You shouldn't have answered that question. You should have made them give you their number first.

If you're still on the fence, don't just refuse the offer, ask for more money (or for more autonomy, or for more benefits), and see how far you can take it.

Answer 4

Well, your current employer has been good to you, and has offered an open door to discuss these things. So, before you jump ship, go discuss with them. You don't have to name names after all. You can just say that you were approached, and that you were offered a 20% salary increase, and that at this point in your life, that's meaningful. You can then make your next steps based on how they react to that.

Your current employer has treated you well, and perhaps deserves some loyalty. You really don't owe anything to the person who decided to try to poach you, unless you decide you want to go work for them instead. You certianly don't owe it to them to lie to your current employer.

Answer 5

I have worked in a situation where companies had a "business partnership", and the expectation was that they didn't "poach" from each other. Obviously, during the work, people would come into contact with specialists with very attractive skill-sets.

However, the essence of the no-poaching rule was that you wouldn't approach someone with whom you'd come into contact this way. Where an employee is actively seeking a new opportunity (no matter how accidentally!) then if a recruiter introduced them to a business partner, this was seen as fair game.

I experienced this, and was told by my new employer that if I'd have approached them directly there'd have been enough doubt that they'd have avoided the problem by not hiring me. As it had come through a recruiter, this was seen as clear enough that it wasn't poaching.