How to Rehire Former Employees?

As the economy rebounds, it's time to think about hiring. Here's how to get back valuable staffers who fell casualty to layoffs.

It's no secret that the past few years have been rampant with cutbacks and layoffs. As businesses are slowly beginning to rebound, however, it might be time to consider re-staffing. There's no recruitment method more cost- or time-efficient than rehiring reliable former employees.

Some businesses call them alumni. Some call them boomerangs, but almost all businesses will admit that rehiring top performers can drastically increase their return on investment.

According to a 2009 Career Builder survey of 2,924 hiring managers, 26 percent of employers who had laid people off in recent years were planning on bringing some of those layoff casualties back. The majority reported that 2010 would be the year they'd extend those return offers.

"We've seen a huge uptick in companies bringing people back," says Anne Berkowitch, CEO of SelectMinds. Her company's mission is to teach businesses how to cut back on recruiting costs by helping employers network with former employees and referral candidates. "Companies are more open to that than they were five years ago, let alone 10 years ago or more."

Rehiring Former Employees: The Case for Rehiring

Berkowitch says there are several crucial reasons why businesses should consider rehiring. The first is that the cost-per-hire is typically decreased. You already know the candidate, so you don't have to worry about hiring a third party recruiter.

"It's a much more informed decision on both parts," she says. "The alum knows the company. The company knows the alum, so the hiring decision is made with a lot more information than what is captured on a resume."

Because the returning recruit already knows what she or he is signing up for, Berkowitch says the retention rate is also significantly higher. Former employees who have left the company and want to come back have likely seen that the grass isn't always greener on the other side. Even if their departure from the company wasn't voluntary, they're already familiar with both the corporate culture and the job description. In fact they are less likely to leave once they've been brought back.

Another key factor in considering bringing back a former employee is that the on-boarding process is much quicker. In fact, Berkowitch says her clients have reported that "time to contribution" for rehires is half that of external recruits.

"They hit productivity a lot faster," she says, meaning the company itself will save time and money that would have gone into training.

On average, Berkowitch reports that companies can save around $15,000 to $20,000 per rehire. "What that captures is lower cost-per-hire, faster productivity and retention rate," she says.

Not only can it save money, but it may also help you with business development, as former employees who have spent time away from your company have typically acquired new skill sets and contacts over that time. Dr. John Sullivan, a professor of management at San Francisco State University, says: "Having worked for a competitor can be worth a lot."

Rehiring Former Employees: Be Selective

Just because rehiring sounds attractive, that doesn't mean you can bring anyone back successfully. Rehires should be given as much thought and consideration as external hires. The most important thing to remember, according to Sullivan, is: "You don't ask everyone back. You ask the top performers."

The consulting firm Booz Allen Hamilton, which is headquartered in McLean, Virginia, is well known for its successful rehiring program. Booz Allen associate Justine Yingling says alumni can log onto the company's website and apply to be what they call a "Comeback Kid." Or they can apply for a targeted position through one of their recruiters. Either way, they will go through the Comeback Kids' rigorous evaluation process, in which the human resources, legal, and compliance teams determine whether or not a candidate will be effective when he or she returns.

"We review their personnel file and make sure there's no history where we'd be concerned about bringing them back to the firm," Yingling says. Such history could include whether or not someone left in good standing and if someone was terminated for a cause.

Once it has been determined that a Comeback Kid is eligible for rehire, the program revisits the employee's past performance, character, and fit in the corporate culture. The company is especially interested in any new experience the candidates have gained that might be an asset to the firm.

"You generally want a boomerang that's been working someplace, because their skills are updated," Sullivan says.

In addition to the top performers to target initially, you might also want to think about bringing back retirees who are fed up with retirement, former interns who never returned, and long-term consultants or freelancers.

Sullivan suggests periodically sifting through your list of former employees and picking out the potential rehires.

Rehiring Former Employees: Forming Alumni Networks

Even if you don't have the budget or the personnel that Booz Allen Hamilton has, you can still found some type of alumni network that will help you bring back former employees.

In Berkowitch's experience, companies that have some type of online network for past employees can easily fill 15 to 20 percent of their open positions with rehires.

"You look at how many hires that is, multiply that by the average savings of $20,000 per hire, and you can get some kind of estimate of savings," she says.

Luckily, starting your own alumni network is easier than ever before. You can connect on LinkedIn or start a Facebook group for alumni, keeping them updated on company news and job openings.

Not only will this help you organize and identify the desirable candidates, but it will also help you keep track of what Sullivan calls "right days." Perhaps someone has recently gotten divorced and is looking to move, or maybe the start-up a person left to work for has been acquired. That person may be more willing to return to your company if you catch them at these opportune moments.

"There are lots of right day factors, and if you track them, it's pretty easy to bring people back," Sullivan says.

If you do have the capacity to build even a basic website for former employees to access, Berkowitch suggests creating a searchable database where you can log each individual's experiences and skill sets. "So many companies are launching alumni outreach because they've come to realize that the value of bringing back your top players is incredibly high," she says.

Though you don't need an army of people working on alumni networking, Berkowitch does recommend appointing someone to be accountable for outreach. "If a company has a part-time person that's 100 percent focused on outreach, it's more valuable than 50 percent from a full-time person," she says.

With a point-person in place, it's also easier to organize and advertise alumni events and parties to help you get some face time with targeted individuals.

Rehiring Former Employees: Countering Potential Problems

At some point in the rehiring process, you will inevitably encounter problems. There might be hard feelings on the part of the alumni if they were laid off. If so, Sullivan says it's best to be perfectly honest.

"Tell them, 'times are tough. They're getting better. Would you consider coming back?' It's not an offer, it just plants the idea in their minds," he says. You might also consider bringing people on for a trial period or as consultants.

"Sometimes you have to entice them," Sullivan says. "Refresh the relationship."

If someone has left voluntarily, you should definitely ask him or her why. Doing so could open a can of worms, but it's better to know about these problems ahead of time. One of the most common reasons people leave a company is because of a manager they disliked. If that's the case, consider placing the alumni in a different department. If that's not possible, Sullivan says, you may have to decide who is more valuable, the rehire or the manager.

"It's okay to change the job for a superstar," Sullivan says. "If it were Tiger Woods or LeBron James, would you change the coach? The answer is: You sure would."

Sometimes, discussing managerial issues with former employees can actually alert you to weak links on your current staff. To ensure a rehire is worth making changes for, though, Berkowitch suggests asking for references from people within the company who worked closely with that candidate before.

Some alumni may also feel entitled to negotiate the terms of their return with salary increases. In that case, you have to determine whether or not a person's new skill sets warrant that increase. Sullivan says offering performance-based bonuses is an effective way to compromise.

Yingling of the Comeback Kids program, however, says to be careful of offering too many incentives. "We do make sure that people aren't utilizing the Comeback Kids program as a means to try and gain anything additionally," she says. "We're bringing them back to the firm because we want to invest in them, and we want them to invest in us as well."

Rehiring Former Employees: Remember Your Current Employees

You can start the alumni recruiting process before your employees have even left the company by making it known that you're willing to welcome great boomerangs back.

When the rehiring process is complete, make sure you celebrate the employee's return in whatever way you can, whether you spotlight him or her on your alumni website or send a mass e-mail to the company explaining where this person has been and what he or she will be doing now.

"That's the kind of messaging that needs to come from the top," Berkowitch says. "If you do promote success stories with people who come back, it can build greater loyalty from employees, because they want to work for a company that really values its people."


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