The third-richest man in the world, Gautam Adani, and Mukesh Ambani, the head of Reliance Industries, have agreed to refrain from hiring employees from one another as part of a no-poaching pact. The agreement will be applicable to all of their operations as of May of this year. Business Insider’s inquiries to both organisations went unanswered.
This agreement is intriguing since it was reached between two of the biggest conglomerates in India, both of which have recently entered markets where the other has a significant presence. Reliance has a major foothold in the petrochemical industry, and Adani Group announced its debut there through Adani Petrochemicals Limited last year.The high-speed data services, for which Adani has submitted a 5G spectrum proposal, are the other area where their paths converge.
No poaching agreements have existed in India for a long time and are growing more common as the competition for talent grows and labor expenses rise. Companies are at risk from rising labor expenses, particularly in talent-scarce areas, and a potential bidding war can make this risk worse.
Neither of these companies currently holds a dominant market share in any industry. In the past, a number of businesses have incorporated similar provisions that forbid employees from joining the competition into their employment contracts. In certain circumstances, even after the contract had expired, employees were prohibited from joining competitors. In certain circumstances, employees are not permitted to join rival companies during a cooling-off period.
