The Shitty Retention Strategy No One Talks About — Backchanneling Has To Stop
In many ways recruiting is the wild west. It seems everywhere you look, companies are poaching talent from one another, hiring tons of people, laying people off, or some other big move. However, there is also an underbelly when it comes to recruiting, and it rolls all the way up to CEOs and founders.
This underbelly manifests itself in conversations between leaders who knew each other before joining, founding or building their company — and the result is a commitment to not recruit or poach from each other’s companies. Wild. I know! While this sounds ok on the surface, it’s actually a huge loss for individual employees, the companies themselves, and the future of work as a whole.
As a recruiter, I’ve seen this “backchanneling” happen far more than many people think, and it needs to stop. I’m not advocating that we move to poaching everyone from each other — there’s room for space in the middle where talent is respected and the ecosystem is still able to grow.
What is backchanneling?
At its core, backchannel recruiting conversations (or “backchanneling” for short) is when CEOs or founders promise to not recruit or poach from each others’ companies.
While this can, and does, happen in all industries, it’s particularly common in tech because of the collegial nature of the startup ecosystem. In many cases, founders and CEOs of growing tech startups either went to college together, worked at another startup together, or became friends through the various meetups, conferences, and events (pre-COVID) that the tech ecosystem is known for.
Knowing the difficulty of building a great company, each leader gives the other a friendly gesture that they won’t poach their talent.
Why backchanneling hurts employees
When CEOs and founders backchannel, employees stand to lose the most.
Lost career growth opportunities: With a backchannel promise to not hire someone from each others’ companies, an employee loses the opportunity to move to a different company and to a different role they are perfect for — all for something they had no control over or knowledge of.
Mental health ramifications: Getting rejected from a job sucks. But getting rejected from a job you know you’re perfect for with zero logical explanation can take a serious toll on someone’s mental health. Since these backchannel promises are rarely, if ever made public, employees are left with a lingering lack of closure when the rejection comes in.
Potential reprisal: If an employee applies to another company where the founders have a backchannel arrangement, there’s a risk of the employee being “found out” and facing issues at their current job.
Why backchanneling hurts the companies involved
Leaders who backchannel are often doing it under the guise of protecting their company from talent poaching. However, in the end, it hurts more than it helps.
Lack of engagement: If someone wants to leave a company, forcing them to stay by limiting their career opportunities is a fast way to create disengaged employees. When this happens, leaders create an environment where employees will leave for any opportunity, potentially resulting in higher turnover.
Passion deprivation: Backchannelling works both ways. Your competitors won’t hire your talent, but you can’t hire theirs. That means you miss the opportunity to bring in new employees that truly care about your mission and product.
Harder to make partnerships work: When you have a no-poaching, no-recruiting rule with a company, it’s harder to make partnerships work. Eventually, employees will talk to one another. If anyone applied but got rejected, the truth could come out, irreparably harming your reputation and ability to recruit great talent in the future.
Why backchanneling hurts startup ecosystems
When talent is held back, the whole ecosystem suffers.
Ecosystem attrition: If someone wants a new career opportunity and a bunch of tech companies reject them for no reason, there’s a risk they will just take their talents to another industry altogether.
Limited cumulative knowledge gain: Each job teaches new skills or provides a new experience. When you limit people’s ability to have those new experiences, the whole ecosystem becomes more siloed and less resilient.
Stale talent: There’s a common refrain in the startup ecosystem that the talent needed to achieve one milestone may not be the talent needed to achieve the next. When backchannel agreements are in place, the whole ecosystem misses out on the opportunity to get exposure to new challenges that eventually create strong contributors and leaders who can build from milestone to milestone.
Power comes from amplifying, not hoarding
When CEOs and founders backchannel, they are prioritizing very near-term wins while risking everyone’s long-term sustainability —including their own and their company’s viability.
The world of work is increasingly a winner-take-all game, with individual companies becoming monopolies in their space and second-placers falling by the wayside. With this hyper-competitive nature, companies need resilient talent with a variety of experiences that can help them through any challenge. Further, individual companies are propped up by the strength of the overall ecosystem, which helps with things like talent connections, overall ecosystem brand, and partnerships. If we want all of that to happen in the work ecosystem, the backchannel needs to be cancelled for good. What do you think?
One more thing — At Bloom, we support companies who aren’t ready for a full-time Head of Talent but need the leadership on an interim basis. We do the nitty-gritty foundational work like implementing the best tech, tools and processes that are infused with your org’s values. Just looking to hire for some key roles? We can assess, attract and hire top talent for your key roles giving you a competitive edge in this tight talent market — If you’re looking to up your talent game but aren’t ready for a full-time hire, connect with our Founder, Avery!