Paul Martin's Business Update - June 26th, 2014

In a labor market as tight as the one Saskatchewan is experiencing, a blog written by University of San Diego professor Orly Lobel offers something of a contrarian viewpoint on losing talent.

Now, it is important to recognize that he is writing from an American viewpoint, a country where law suits are as common as breakfast cereal when he notes that the US has seen a 60-percent increase in the number of employers going to court to enforce non-compete agreements when a worker leaves. But he says the employer may actually be better off by losing a solid performer.

He calls it social capital. An employee leaving to join a competitor or a client retains ties to the old firm – with other employees and so on making them a source of information on the customer’s needs or a competitor’s latest idea.

And he says former employees – alumni – can often be a talent pool that is easy to exploit when looking for an employee. After all, both sides know each other well and the risk of a bad hire goes down significantly.