Last summer, I posted an online survey question asking readers this question: “Should Harley-Davidson dealers have an agreement that they will not ‘poach‘ employees from one another?”
The response was quite clear: No.
Most survey respondents were not in favor of a no-poaching agreement. They felt employees have the right to choose where they work and it was up to each dealership to create an environment that retains top talent.
I agree. There is no way there should be a formalized agreement preventing dealers from hiring someone from another dealership. To do so would not only be unethical, it may very well be illegal.
But do you know that such agreements do appear in other industries, primarily in the restaurant business? These “no poach” clauses usually are between the chain and the franchisee — and most employees don’t even know they exist. Yet they prevent someone working at one McDonald’s to work at another McDonald’s.
Two Princeton professors published a study in 2017 that identified 70,000 fast food restaurants in the United States that had no-poaching policies. After examining 40 different franchise agreements at America’s largest chains, they determined that these clauses exist primarily to limit competition, reduce turnover and keep wages low.
Washington State Attorney General Bob Ferguson’s office investigated this situation, and at least seven chains including Arby’s, Carl’s Jr., McDonald’s, and Jimmy John’s subsequently all agreed to drop the practice and remove it from current and future agreements.
OK — I know: The motorcycle business is not the fast food industry.
Nevertheless, this is important info to know. I believe in the free market system. Top talent gets the top spots. I’ve been saying for years that dealers need to not only develop customer loyalty but also employee loyalty. We need to create conditions such that employees would never even consider working for someone else.
Note that this is not just about money. Is equitable compensation important? Sure. But many other aspects are critical, as well. Here are four factors that are key to creating a positive working environment:
- You provide real training.
- Professional performance feedback is the norm.
- Career growth opportunities truly exist.
- A consistent and positive atmosphere is in place.
This is a relationship business. What is your relationship with your people?
Do I think a dealer principal or general manager should call the high-performing finance manager of a neighboring dealership and try to lure that person away? No. (Nor do I think you should ask your employees to do so, which occurs more frequently than you might think.)
But here’s what I do think. Ask yourself this question: “If another dealer did reach out to one of my top people, would that person leave?” If the answer is yes, you have some serious work to do.