You probably have heard that the Federal Trade Commission (FTC) recently banned non-competes. This changes the recruiting world drastically, and you may be finding yourself lost and confused on what to do. Don’t worry! This article will dive into what a non-compete is and what you, as a hiring manager, should change about your hiring process in response.
What is a non-compete?
A non-compete is an agreement or contract between an employer and employee that forbids the employee from engaging in business activities that compete with the employer’s business for a specified period of time after the employment relationship ends. This is done to protect the employer’s business interests, such as trade secrets, by limiting the ability of former employees to work for competitors or start competing businesses.
Why were they banned?
According to FTC Chair Lina M. Khan, “Noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism, including from the more than 8,500 new startups that would be created a year once noncompetes are banned.” The FTC believes that banning non-competes will encourage competition, innovation, and increase wages. It’s important to note, however, that this ban does not apply for non-profits.
So now you know what non-competes are and why the FTC banned them. What should you, as a hiring manager, do in response?
- Rethink your job advertising strategies
Recruiting is now more competitive than ever. It’s time to review how you advertise your open positions. Do you post job openings online? You can add a “Careers” section on your company’s website for this, and you can post job openings on job searching sites such as Nexxt as well. Make sure your job descriptions are up-to-date and include details such as location, any skills the job requires, and whether the job is remote or in-person. As the FTC mentioned, salaries are going to increase. Consider raising the salary offerings on open positions as well. This will increase the competitiveness of your job opening.
- You should focus on retention strategies
As employees gain more freedom to move between jobs, retention should become a critical focus. The last thing you want is for the talented employee you once had to start working for a rival company. Focus on creating a positive work environment that encourages creative freedom and collaboration. Foster a strong company culture and consider offering career development opportunities. Offering salary bonuses will improve employee tenure as well.
- Find a different way to protect business interests
It’s now more essential than ever to find alternative methods to protect your business interests effectively. Strengthening confidentiality agreements can ensure that sensitive information remains protected. This may include things such as Non-Solicitation Agreements or Non-Disclosure Agreements. Invest in cybersecurity so as to protect important information. Implementing strong onboarding processes ensures new employees understand the importance of confidentiality and company specific protocols for handling sensitive information. Similarly, strong offboarding processes ensure that employees who are leaving return all company property, and remove their access to company systems.
The new ban on non-compete agreements will mark a significant shift in the job market, there is no doubt about that. However, if you use these tips, you will find that the transition will be smooth sailing and may even be beneficial for your company. Embrace these changes to stay competitive and protect your business interests in a more dynamic and open job market.
* Disclaimer this article is not offering legal advice, it is simply considering an interesting topic.
Nexxt is a recruitment media company that uses today’s most effective marketing tactics to reach the full spectrum of talent – from active to passive, and everything in between. Learn more about hiring with Nexxt.
This article was written by Hailey Jiang.
Hailey Jiang is a copywriter and poet living in Boston. She enjoys rowing, figure skating, and playing with her cats. You can find her on Instagram at @hailey.photo.writing