Recruiting’s Zero-Sum Nature

Recruiting, for all its promise and potential, carries a truth that I find quietly sad: it is, at its core, zero sum. Every new hire comes from somewhere else. Every time one leader gains, another loses.

Leaders get upset about this, and understandably so. I have even received threats for talking to employees. It is reasonable, even necessary, to want to defend what you have built. When you have poured into people, watched them grow, and relied on them to carry major responsibilities, the thought of losing them feels like a blow to the chest. I lose people, too.

That is why the word “poach” has stuck around. But truthfully, it is a misnomer. It implies something illegal or unethical. Hiring someone away is neither. In fact, it is explicitly protected in our laws. Still, the word carries weight. It embitters some.

And yet, the reality is this: employers, myself included, are not entitled to the loyalty of our employees. Loyalty, when it comes, is a blessing. But many good things end at some point, sometimes painfully. Alignment shifts. Opportunities open. People make decisions for their lives that ripple beyond any one leader’s plans.

The truth is, unless a leader wants to train employees entirely from scratch, which is risky, expensive, and slow, they have to recruit people with experience. And people with experience are not sitting around unemployed, waiting. Recruiting is not just an option; it is a necessity.

Ambassador Group recruits for itself, and would you believe it, recruiting firm owners get upset when their people are approached.

Some laws protect against employers fixing the employment market against employees, limiting movement or opportunity. Read more about it here.

1. Federal Law

• Sherman Antitrust Act (1890): Section 1 prohibits agreements that unreasonably restrain trade. The DOJ and FTC treat “naked” no-poach agreements (agreements not tied to a legitimate collaboration like a joint venture) as per se illegal, similar to price-fixing or wage-fixing.
• DOJ Antitrust Division Guidance (2016): Warned employers that naked no-poach and wage-fixing agreements could be prosecuted criminally.
• Recent DOJ Enforcement: Since 2020, the DOJ has brought several criminal cases against companies that allegedly agreed not to hire or recruit one another’s employees.

2. State Law

• State Antitrust/Competition Laws: Many states have “mini-Sherman Acts” or unfair competition statutes that mirror federal law.
• State Attorneys General Actions: Several states (e.g., Washington, California, New York, Illinois) have aggressively pursued companies for using no-poach clauses in franchise agreements and inter-company arrangements.
• California: Has particularly strong public policy against any restraint on employee mobility (Cal. Bus. & Prof. Code §16600).

3. Distinction Between “Naked” and “Ancillary” Agreements

• Naked No-Poach Agreements: Agreements between competitors with no legitimate business justification (e.g., “you don’t hire my employees, I won’t hire yours”). These are almost always illegal.
• Ancillary Agreements: Restrictions that are part of a broader legitimate collaboration (e.g., M&A deal, joint development project) may be allowed if they are narrowly tailored and necessary to the collaboration.

4. Civil Liability

• Employees affected by no-poach agreements can bring class-action lawsuits under antitrust law for damages (including treble damages).
• Companies found liable may face both criminal penalties and civil damages.

I believe deeply in the market forces at work here. There is nothing immoral about it. In fact, the freedom of movement is one of the ways both companies and people optimize. Leaders gain a fresh perspective. Candidates discover new levels of contribution. Economies adjust and evolve.

Still, I cannot help but feel the sadness in the volatility. Every departure costs. Leaders endure the disruption of projects and the breaking of trust. Teams feel the gap. Candidates step into the stress of transition.

What I wish, what I long for, is that we would all think of employment in much longer arcs of time. Imagine if job changes were not such a common occurrence. Imagine if both leaders and employees invested in each other with the same mindset as compound interest: steady, consistent, and committed over decades.

The returns would be remarkable. Loyalty would produce deeper trust. Integrity would become the bedrock of teams. And the real dividend, the one worth more than quarterly performance or a higher salary, would be the compounding value of long-term relationships.

Recruiting may always carry its zero-sum nature. But to the companies I have recruited from: I am sorry for your loss and the struggle. And at the same time, I am proud of the great people I have helped land with kind, organized leaders where they can do better work for their fellow man. That is life-improving work, even if it comes at a cost to others. Such is the nature of business opportunity: both profit and risk.

The challenge before us is not to deny recruiting’s zero-sum reality, but to rise above it. Leaders who build cultures of loyalty, integrity, and long-term investment will not only weather the losses, they will reduce them. The more we commit to each other for the long haul, the more compounding value we all create. That is where the future of work should point us.