Employees Poaching Clients

[SquarePeg]

Say, my g/f's parents have had a cleaning service for the past decade or so. Things are so good that they have to turn away clients constantly!

The problem is finding the help. They don't have enough people to work 'cause they hire only illegal immigrants (yeah yeah, I know) so as to help prevent client-poaching by employees.

But it's inevitable. Sooner or later, an employee will offer, communicating in limited English, to work for much less, thereby stealing the client away.

Any way to combat this?

Have clients sign forms that spell out financial penalties (assuming such are legal)? Not much can be done against the employees, obviously.

Or just chalk it up as part of the cost of doing business??

Seems like that to me. But what are your thoughts, smart people?

[VinceG]

It's inevitable if you have a commodity type business, where you could swap one company out for another with no real downside.

You might try treating your employees better, that way they'd be less likely to want to jump ship and work for themselves. If you think about it, you're working for your employees too. If you're a bad boss, they might 'fire' you and do that job themselves.

You could also try picking your clients better. Good clients won't destroy the relationship you have with them for a little extra cash. If you've got an abundance of clients, you could turn some of your existing clients that are pains in the butt away, without hurting revenue. Then you could focus on the needs of the ones left and really do a bang up job for them.

Or you could ignore it completely, and just hire a bunch of people knowing that some of them are going to leave with some of your clients. But it won't matter because you're focused on keeping as many potential new clients in the works that attrition isn't that harmful to the bottom line.

Chances are, many of the clients that try a cheaper, hungrier alternative, will find the grass really wasn't all that greener.

[Le Roi]

SquarePeg,

Giving that the business is operating illegally (by hiring illegal immigrants), I would not advise that you use the legal system to threaten clients or sign up "non-poaching" contracts. A client who would get sued by the company for poaching an employee can hurt your business by exposing how you hire only illegal immigrants. So, you couldn't really enforce such a contract without exposing the entire company.

If you were hiring legal employees, then you could offer a "non-poaching" contract to clients, or you could bind employees to not steal your clients. However, given that they are illegal employees, you can't really do much legally.

Thus you can only fight this by making it more worthwhile for the employee and client to stick with the company than for the client and employee to ditch the company.

If I was related to the business, I'd find out by looking into how long the employees last with the company before working directly with the client. Is it new employees, or long term employees? I'd analyze that and see if I can find a pattern. Maybe I'd interview some of those who've quit the company to take on clients directly and ask them what it would have taken them to stay with the company, or to come back.

I'd also interview those who've stayed with the company and not jumpship and ask them why they decided to stick with the company when they could have done what the others have done. I'd want to find out if there is a need or trait particular to those who've decided to stay with the company that is different from those who've stolen the clients?

Finally, I'd want to talk to other cleaning business owners who also hire illegal immigrants and ask them how they deal with the situation. Have one of them successfully found a way to deal with this? If so, can you copy their methods?

[SatvikBeri]

If there's a consistent pattern to when they quit (for example, around 6 months) then offer a raise around that time and make it known that if they work for at least that long they'll get a raise. That would probably eliminate about half of the quitters.