What would you do? Unethical company raids us for talent

Periodically, we ask three HR managers how they’d handle a difficult situation at work. Today’s problem: Another company is unfairly raiding us for talent.
The scene

Sales manager Don Buddin slumped into the chair and said, “Get ready to do another exit interview. Jeanne Yawkey is quitting.”
HR manager Sandy Gomez nodded and spoke: “Let me guess. She’s going to our competitor, ABC Industries.”
“You hit the nail on the head,” Don said. ” She’s the fourth salesperson in the last three months to quit us and go with ABC.”
“And pull some of our clients along with them,” Sandy added. “But if it’s any consolation, the sales department isn’t the only one here that’s been raided by ABC.”
The ultimate plan
“So I heard,” Don said. “It looks like ABC is going for a big expansion, and they’ve targeted us for their talent needs.”
“Yes, but there’s another part to this that bothers me, too,” Sandy said. “I was talking to an HR manager I know who used to work for ABC. He says their expansion tactic is to hire more than they need and then just get rid of people, keeping what they think is the cream of the crop.”
“You mean they just fire a lot of people after they settle on their needs?” Don asked.
“Pretty much,” Sandy said. “Nasty, eh?”
“So apparently ABC is offering high salaries for our people to switch, with the thought that they’re going to end up firing a lot of them anyway,” Don concluded.
“Right,” Sandy affirmed. “That’s apparently how they do business.”
“Is there anything we can do about it?” Don asked.
If you were Sandy, what would you suggest to address the problem?
Julie Hudson, HR coordinator, Red Bud, IL
What Julie would do: It’s time to open the lines of communication and let employees know exactly what’s going on – that a competitor is trying to hire people away with shady promises. Then I’d ask people to talk to me if they’re considering an offer from the competitor. Maybe we could do something to keep them.
Reason: Being open about the situation is almost always a good idea. It’s a way of being proactive, instead of waiting until some employees are actually contacted.
Elaine Clark, program manager, Kingston, Ontario, Canada
What Elaine would do: Usually, people don’t just walk out; they tell you they’re leaving and why. That’s the time I’d sit down with them, explain the situation and ask if there’s anything we can do to get them to stay (if, presumably, we wanted to keep them). We might be able to come up with a little more money for some people, but if money is the only reason they give for leaving, we may just have to let them go, with the knowledge that they’re fully aware of what they’re getting into.
Reason: All you can do is point out the positives of staying and the negatives of leaving, and try to work something out.
Diane Moser, HR manager, Jacksonville, FL
What Diane would do: I’d probably try to combat this during recruiting, explaining to people that we’re a stable, good company to work for, while highlighting the benefits we offer. Of course, I’d also try to make sure our compensation is in line with the industry, to be certain we’re not at too much of a disadvantage.
Reason: Handling this the right way on the recruiting end can get you some good replacements and fight off the challenge of another employer that hires on pay alone.