Bringing back former employees can be a cost-efficient and effective way to fortify your workforce, but it does not come without risk. Such workers know the people, culture and the job, but HR leaders should make sure hiring managers don't just settle for a known entity -- when a better fit might be available. There are also potential bias and employee-classification issues.
On the surface, rehiring former workers seems to be a no-brainer for organizations that are now starting to shift back into hiring mode.
After all, former employees offer a plug-and-play advantage. They know the culture, the job and many of their co-workers. They require little or no training and may even bring some fresh skills or insights they picked up during their time away from the organization. Rehiring can also streamline the search and interview process, and reduce onboarding time and effort.
Not so fast says Wayne Pinkstone, a partner with Fisher & Phillips, a national labor and employment law firm that represents management.
While boomerang hiring certainly has advantages, there are downsides as well. HR leaders need to be aware of legal and policy issues, as well as corporate culture and performance-related issues prior to hanging the welcome-back banner on the cubicle wall.
"Former employees can be of real value to an organization, but bringing them back can pose some risks,'" says Pinkstone. "An HR executive needs to take the lead in how the company is going to handle and assess the rehiring process."
"Justified and Researched"
A recent survey by consulting firm OI Partners found about 40 percent of employers hope to rehire former workers this year. A Department of Labor survey found similar results. The trend is occurring within a still-struggling job market in which jobless claims have fallen a combined 41,000 in the past three weeks, but still remain 5.8 percent higher than at the end of 2009.
For many firms, rehiring may be viewed as a tentative and safe first step to increasing payrolls. Pinkstone says HR leaders considering rehiring should visit the legal department to determine what policies, laws or restrictions might prohibit pursuing a former worker.
Obviously, if a union exists in the organization, there are typically contractual parameters that govern which employees are eligible to be hired back.
In nonunion organizations, HR professionals need to make sure rebound rehiring decisions "are justified and researched," Pinkstone says. Specifically, HR leaders want to avoid exposing the organization to a potential discrimination suit, based on who is being asked to return, and when.
"Let's say you had a group of five employees, and the two asked back were white males under 40 and the others were woman over 50," Pinkstone says. "As an HR executive, you have to seriously consider how that decision was justified if someone claims the rehiring was based on gender and age, and not on merit."
Organizations also need to be aware of labeling a returning employee an independent contractor if the actual duties he or she performs carries all the responsibilities -- and hours -- of a full-time position.
"Legally where it can get [an organization] into trouble is if the contractual arrangement turns sour and the employee claims he wasn't really an independent contractor but was acting in the capacity of an employee," Pinkstone says.
Legal trouble isn't the only potential pitfall.
Monique A. Honaman, CEO of ISHR Group, an HR consulting firm in Suwanee, Ga., says hiring managers need to guard against "settling" for a former employee simply because it is the easiest path to getting the job filled.
"It becomes a problem when the boomerang employee, although a good fit, isn't the absolute best fit for the role," Honaman says. "It's often too easy to settle and take the easy road. Hiring managers need to make sure they are exhausting their resources to find the best talent available."
Honaman says HR should also be wary of potential loyalty issues. Rehired workers, having been let go once, may worry it will happen again.
"That can manifest itself in the employees being more open to explore new opportunities [after being rehired] that perhaps they wouldn't have been considering in the past," Honaman says.
Done properly, bringing former employees back as independent contractors can be a cost-efficient and effective option, says Melvin Scales, senior vice president, Global Solutions at Right Management, an international talent and career management consulting firm.
In a contractor arrangement, there is typically an agreement that can be terminated at any time. The contractors often can be targeted to specific tasks or projects and might bring a fresh attitude and insight to the work.
"There is an unwritten nuance that contractors feel more in control of their destiny and more willing to take risk and pursue more innovative thinking," Scales says. "It's a very subtle mind shift, but it plays out in many positive ways."
Scales emphasizes the importance of clarifying the job description and the specifics of the employer-contractor relationship up-front so there are no misunderstandings once the work begins.
HR's Strategic Role
Ultimately, HR leaders need to take the lead in figuring out how rehiring fits into a comprehensive workforce-management strategy.
"I would really encourage HR leadership to stay focused on a strategic plain," says Scales. "Emphasize the need to have the right talent, in the right place, at the right time. That means being connected with people who can contribute immediately to what the organization needs."
Pinkstone agrees: "I think it really falls on the HR executive to dig in and analyze the approach to rehiring to make sure the company is doing it right."
And done right, the rehires can make a solid impact in a short period of time.
"They know the company, the culture, people, policies and politics," says Honaman. "They also have a network that expands outside the company and, from my experience, has only expanded more through their work at other firms with new customers, clients and capabilities. This can be an asset if the organization starts growing again, expanding services or moving into new markets."