Here’s what CHROs actually think about the potential ban on noncompetes

The Federal Trade Commission’s proposed ban on noncompete agreements sparked fervent debate about the positive and negative implications for employers. But what do CHROs think about the news? Gartner’s latest monthly insight report suggests that most HR heads are fairly optimistic about what the potential ban could mean for sourcing talent. 

The proposed rule aims to better protect workers and foster a healthier environment for people seeking to change jobs. “Noncompetes block workers from freely switching jobs, depriving them of higher wages and better working conditions, and depriving businesses of a talent pool that they need to build and expand,” said FTC Chair Lina Khan in a prior statement. Many people leaders recognize the potential upsides as well. 

In fact, a majority of the over 280 HR heads surveyed by Gartner last month said that the ban would provide access to a larger pool of skilled workers—72% to be exact. In addition, 48% said they believe it will actually improve competition for talent, and 46% believe it will promote better workplace diversity. 

“A lot of people suggested it would hurt companies [and] make a bad situation worse,” says Dion Love, vice president of advisory in the Gartner HR practice. “But in my work, I’m finding the smart companies actually see things differently, and they’re turning it to their advantage. It is a little counterintuitive.” 

HR executives are preemptively planning to respond to the potential ban by actually increasing investment in their people. To offset no longer having noncompetes as a way to retain employees, 47% of survey respondents said that their organizations will offer more learning or growth opportunities, and 41% said they will compete with higher salaries. A significant number (38%) also reported that they plan to increase internal focus on promoting work-life balance to prevent losing valuable talent to competitors. 

“When we boil it all down, what we’re talking about here are strategies to keep people in a tight labor market, and we’re weighing their relative merits,” Love tells Coins2Day. “And when one strategy goes away, they pivot to another, and that’s exactly what they’re doing.”

Amber Burton
[email protected]
@amberbburton

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