Such fear of employees becoming competitors keeps several entrepreneurs from sharing trade secrets and contacts with their staff. However, employees cannot work to the best of their abilities in such a case.
SupportBiz lists some tips for entrepreneurs to handle the fear of their employees going on to become competition.
1. Consider a no-competition agreement.
While hiring an employee, consider if you can get him/her to sign a no-competition agreement, which prevents them from starting a similar business as yours. The help of a lawyer might be required for this purpose.
Such no-competition agreements will put your fears to rest, enabling you to focus on the growth of your business.
2. Have thorough discussions.
Have a thorough discussion with prospective employees about their goals in life, during the job interview. Question them about what they see themselves doing in the next ten years or so.
If an employee tells you that he/she wishes to start his/her own firm in the same industry vertical, it should give you pause for thought. You should hire employees who are ready to work under you because they have a passion for the industry, not someone who wants to join you so that they can learn the ins and outs of the industry and later, start a similar firm of their own.
3. Do not let fear take over your logic.
Do not get too paranoid about employees starting their own firms in your industry, and becoming your competitors. This might cause you to withhold important information from your employees, which is not the right way to work. Doing so, in fact, stops employees from working to the best of their abilities.
Moreover, it is not necessary that every employee who wishes to start a similar firm will actually go on to do so. There are many factors that will influence the happening or not happening of this event – availability of finance, entrepreneurial abilities, market conditions, and so on. Do keep this in mind at all times.
It is also not a prudent practice to hire employees with no ambition at all, for fear of their becoming your competitors. Their lack of ambition will reflect in every aspect of their work, and overall productivity of your business will be affected, which is certainly not what you want.
4. Remember that competition might also be good for you.
An employee becoming your competitor might pose some hurdles for your business, but remember that this is not always a bad thing.
Competition will push you to put in your best into your business, and force you to grow. Competition will make you aware of your strengths and your weaknesses vis-a-vis those of your employees-turned-competitors.
What you should do, in this case, is capitalise on your strengths and focus on diminishing the impact of your weaknesses. You should also figure out how to differentiate yourself from your employees-turned-competitors, find your own niche in the market place so that you build a set of loyal customers who will not leave you at any cost.