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Tough Call: Dealing with poachers

A large competitor known for poaching talent from existing yards is coming to your market and wooing your key people. What would you do?

It’s amazing how radically the LBM world has changed in just 15 years. Though you had solid experience and a proven track record as an LBM pro back in 2009, most LBM dealers and distributors were cutting back—if they weren’t closing their doors—due to the Great Recession. That’s why you decided to pool your meager savings, the credit limit available on your credit cards, and the positive reputation you’d established with area suppliers to launch your own company, the aptly named Shoestring Lumber.

Somehow, you managed to recruit two others, and the three of you proceeded to do what it took to make sales and earn customers. Today, the company is still small, but with the number of employees in the double digits (!), it’s bigger than it’s ever been, and has built a reputation as the go-to LBM dealer for serious builders, remodelers, and DIYers.

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Despite grumbling among customers and staff about an impending recession, and how the government is trying to put everyone out of business, and how young people just don’t want to work, and the world’s going to hell in a handbasket, etc., the future looks positive for Shoestring Lumber. Or at least it did, until Beast Lumber announced plans to open a location right down the street from you.

It’s not that you’re afraid of competition. You and your small-but-mighty team have done just fine by remaining laser-focused on serving your customers. The crucial element in that sentence, ‘your small-but-mighty team,’ is a key to your success, and also the very thing that your new competitor is targeting.

Beast Lumber has earned a reputation for entering small- to-medium sized markets, then crippling existing yards by poaching their key staff members. As much as you disagree with the ethics of their approach, you understand why they do what they do. After all, what better way to take out a competitor than by hiring away its best people?

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You happen to know they’re using this strategy in your market, because two of your top people have shared with you that they’ve received very generous employment offers from Beast Lumber. Both offers were compelling—more money than you’re offering complete with a solid benefits package. The two team members who talked with you are the two other original members of Shoestring Lumber, so you’re confident that others are being approached as well.

If you’re going to act to keep your team together, now is the time. But you’re torn on how to proceed. What would you do?

Do nothing. You know your team is paid above market, and they know how flexible you are to work with. If they really think the grass is greener, that’s a lesson they need to learn.

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Match/beat offers. On a case-by-case basis only, match or beat the offers made to members of your team who you absolutely don’t want to compete against.

Fight fire with facts. Research the facts on how Beast Lumber treats their employees once they’re onboard. Share those insights with your team members who may be tempted.

Strategize. Talk with dealers who’ve been through this to learn how it played out. Once you understand how serious the threat is, then decide on how best to respond.

What would you do?

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