Topic:

Should You Rehire an Employee Who Left the Company?

December 4, 2023
Should You Rehire a Former Employee?

Sometimes employees who leave a company later want to come back to work for their former employer. In fact, the rehire trend is common enough to have inspired the label "boomerang employees" for those who return having left voluntarily.

This can be great news when an employee had contributed in valuable or positive ways to the company. For example, a boomerang employee who quit for legitimate personal or professional reasons later returns with as much or more to contribute. Or a competent and reliable seasonal worker laid off months prior reapplies once demand picks back up. The ability to quickly and painlessly rehire a known, trusted entity can make life easier for HR and employment specialists.

But when positions open up to job seekers, anyone can apply — even people who left a company on bad or questionable terms. Should someone you terminated in the past even be considered to work for you again? That depends.

The decision can get complicated given any number of potential upsides, risks and legal implications. If you're thinking about rehiring a former employee, it's wise to adopt a thoughtful and realistic approach. Moreover, it helps if you can rely on an official rehire policy to guide you with standards and objectivity.

Here's what to know and ponder about the pros, cons and other determining factors involved. Bonus: We'll also explain how and why to develop an official rehire policy based on these considerations.

Pros and cons to rehiring a former employee

At hiring time, you may be flooded with new applicants — some, highly qualified; others, not so much. Everything you learn about those you don't know will come from what they and others tell or show you, not from personal-professional history and experience.

On the flip side, you already have a window into what to expect from those who've worked for you before. If they left on good terms and fit the company culture, you might want to consider hiring them again. That said, there exist good reasons not to rehire former workers.

Here's a deeper look.

Benefits of rehiring

Boomerang employees can be excellent rehires, and the pros seem to outweigh the cons. If the potential rehire was a good match for their previous job, you’ll cut the costs for recruiting and initiating someone new.

In fact, reintroducing formerly terminated workers can provide an array of significant benefits as the rehired employees:

  • Have a basic understanding of your systems, processes, customers, company culture and work environment.
  • Have already gone through the screening and hiring process.
  • Can save the company resources by requiring less on-the-job training and onboarding than a new hire would.
  • May have acquired valuable new skills and experiences that will benefit their role and your organization.
  • Are a known quantity and may present less of a risk than other job seekers.
  • May immediately enhance the workplace and company culture due to trust, relationships and loyalty already established.

Keep in mind that a former employee reentering your organization may need additional training if they've been gone awhile. Still, it's to all of your advantage that they generally know how you work.

Potential risks

Your previously separated employee left for a reason. If you have reservations about bringing them back, consider the legitimacy of your feelings. There are no guarantees for how someone will turn out, for better or for worse, when hired a second time. So it's a good idea to consider potential scenarios and whether or not you're willing to chance them. For example:

  • If what caused a former employee to leave voluntarily hasn’t changed, they may end up leaving again.
  • Staff members who previously lacked loyalty could quit again abruptly, either on a whim or for opportunistic motives. How disruptive could that be to day-to-day business operations?
  • Former employees who left involuntarily, especially for disciplinary reasons, could raise hackles upon return. They might also turn out to be repeat offenders.
  • If the issue involved performance, you may need to provide extra time, coaching or other attention to level them up.
  • Some former employees who left on their own accord may never have wanted to be there in the first place. You run the risk of them not respecting or appreciating your company as much as a fresh, energized newcomer might.

Also understand that rehires transitioning back into a higher position should still be vetted as a new candidate would have been. They may have gained the necessary skills for the new job, but they’ll still need to prove their commitment. So asking for references should be part of the deal.

Ultimately, there's a strong argument for choosing candidates who are willing to go all in for your company. So don't feel obligated to rehire someone based on past familiarity or inappropriate expectations of your loyalty. It's incumbent upon you to use your best judgment, and it's OK to turn down those who seek to return accordingly. Ideally, that frees you both up to find the best employment fit.

What to consider when a past employee seeks to be rehired

Organizations must decide whether to rehire former employees based on what they already know, what may have changed and more. Consider the potential pros and cons as well as the likely effects on multiple areas of the organization.

Sometimes the choice is obvious: Yes! This person has a great history, great potential, and we consider them "eligible" for rehire. Or: No, we consider this person more a known risk than an asset, therefore "ineligible."

But when which way to go is not so clear, the answers to two questions can help you cut through the weeds:

  • Why did they leave? Depending upon the answer, you could end up with the same problems you had in the past, or you might reacquire a valuable and reliable employee.
  • Why do they want to return? Do their motives align with your needs and goals?

Reasons for leaving

People may leave your company for any number of reasons. If you’re not sure why they left, it can be tough to decide whether or not you should give former employees another chance.

The first thing to determine is whether the separation was voluntary or involuntary.

Voluntary separation includes quitting, resigning or leaving for a variety of reasons, such as:

  • The need or desire to exit the workforce either permanently or temporarily. For example, to retire, to avoid burnout, for health-related reasons or to raise a family.
  • To freelance or start one's own business.
  • To further education or pursue a particular passion or interest.
  • Job dissatisfaction or general discontent with working conditions, management, job duties, workload, workplace support, work-life balance, etc.
  • For a new career opportunity, advancement or better compensation elsewhere.
  • Relocation.

It's better to know than to assume, so be prepared to ask a rehire candidate why they left. That opens the door to conversation about what has or has not changed in the effort to avoid unwanted future separations.

Involuntary separation refers primarily to firing and layoffs.

Sometimes the separation is the fault of the employee, whose behavior has resulted in rightful termination. Firing is the company’s dismissal of an employee for prolonged undesirable behavior or significant infractions. Common reasons for firing employees include:

  • Ongoing poor performance.
  • Breach of contract or company policy.
  • Harassment, discrimination or other types of misconduct.
  • Stealing or other illegal behavior.
  • Ghosting their position.

A layoff has nothing to do with unsatisfactory performance or behavior. Instead, it's about conditions that affect the organization, such as seasonal, economic or demand fluctuations. Employees who expect their job to be available when business recovers may wait for the position to reopen to them.

Other times, termination is mutual, anticipated and completely no-fault. For example, the original employment relationship may have predetermined the separation terms upfront. Perhaps it was a paid internship or a type of transitional employment situation rather than permanent job placement.

Why a former employee wants to return

Common reasons why former workers seek to return include:

  • They may be counting on being rehired if layoffs prompted the original separation and conditions have improved.
  • They haven't found the promotional opportunities or job satisfaction they'd thought existed elsewhere.
  • They recognize mutual benefit in returning to you with the experience and marketable skills they gained while away.
  • Enough time has passed since taking a much-needed break.
  • Changes in your company have resulted in workplace improvements that align with the employee's values and style.
  • The employee simply regrets having left a good situation they'd taken for granted. They now appreciate what they once had from a new perspective and with a new sense of commitment to giving their all.

Whatever the reasons, having a clear understanding of what's changed since they left can help you both understand where they might now fit better within your organization.

Establishing an effective rehire policy

Based on the aforementioned considerations, employers should determine and draft an official company policy for rehiring employees after termination. This document will provide guidance to the Human Resources department and hiring managers who make the final decisions. A formal rehire policy helps ensure consistency and that no important considerations are overlooked. It assists employment specialists in basing their decisions on clear and objective criteria.

One of the most important considerations should be why a former employee was terminated. Causes of employee turnover vary, and that turnover can be costly to the company. For rehiring decisions, it matters if the employee left voluntarily, was laid off, or was fired for misconduct or poor performance.

A rehire policy should address who is eligible for rehire and how to handle employee seniority, salary and benefits.

Who will be eligible and ineligible for rehire?

A former employee has the legal right to apply to be rehired for a new or previous job with a past employer. So your policy should provide a uniform process for determining when an employee is eligible to be rehired at your company. There may be legal considerations when rehiring. Having a policy in place can help protect you from potential claims of discrimination if you decide not to rehire an employee.

For starters, outline which applicants you will consider. For example, specify that to be eligible for rehire, a former employee:

  • Was laid off, not fired. Or, if they left voluntarily, they gave timely notice and were not intentionally disruptive in the process.
  • Had satisfactory performance reviews.
  • Demonstrated appropriate behavior in the workplace.
  • Can pass a drug screening and background check according to the company’s current procedures.

The company should also create a “no rehire list” of criteria that make an employee ineligible to be rehired. Employees terminated for cause might still request rehire, but the policy should make the reasons they won’t be considered clear. For example, an employee could be strictly ineligible for rehire if they were terminated because they:

  • Committed a crime against the employer or another employee.
  • Violated important company policies.
  • Demonstrated ongoing performance issues, such as poor performance or failing to perform their job adequately.

When outlining ineligibility details, remain professional and non-accusatory in attitude and tone. Simply state the facts.

Employee status and benefits

Rehired employees may have certain legal rights to receive paid or unpaid benefits, such as accrued sick leave. These vary by jurisdiction, so you’ll need to take federal, state, and city laws into consideration.

Do you have to restore salaries?

Returnees who were laid off may expect to be back on the job at the same rate of pay and with the same employment conditions. Others, regardless of the separation terms, may be seeking more regarding competitive wages and overall employee compensation.

If you had an employment contract or collective bargaining agreement with the employee, it may contain salary requirements you must follow. Otherwise, there may be no legal obligation to match or exceed an employee’s former salary.

Still, people need to earn competitive wages. Many employers voluntarily give rehired employees credit for prior service for seniority-based pay and benefits. Even when they’re not legally required to do so.

If your company decision makers plan to do this, determine clear and consistent rules for when rehired employees are eligible for prior service credit and/or restored salaries. Include these rules in your rehire policy document.

For example, the policy might specify that employees who are rehired more than a year after termination are treated as new hires.

Or that employees who are rehired within a year from termination are eligible for:

  • The same salary they received before, if they are rehired for their old job.
  • The salary that other employees in their job category are making, if they are rehired for a different job that pays less or more than their previous position.

What happens to benefits when you bring employees back?

Some rehired employees will have legal rights to certain benefits. This will depend on the jurisdiction and the reason for termination.

For example:

  • Some local jurisdictions may require that employees who are rehired within a certain time period have their accrued sick leave time restored.
  • Hours worked before termination may be applied toward the hours needed to be eligible for leave under the federal Family and Medical Leave Act.
  • Furloughed employees may retain benefits.
  • With some exceptions, laid-off employees who are rehired may be treated as new hires.

Employers may choose to provide more benefits than are legally required. If you do this, be sure to document it as part of your rehire policy to ensure fairness and consistency. Employers may choose to offer different levels of seniority and benefits depending on how long it’s been since the rehired employee left the company.

Plan for a mutually successful transition

Any new entry to the workplace changes dynamics. Even when the change is mostly positive, it's not without some type or extent of adjustment among coworkers and teams. Anticipate that this concept will apply even when a former employee reenters familiar territory and on good terms. Certain things have changed for the newly rehired worker, other staff members, and the environment and/or operations. If the employee left on rocky terms with anyone, those relationships may require some attention to clear the path going forward.

In any case, people may need to adapt to changes in individuals, relationships, processes, expectations, organizational structure and more. It's easy to overlook that fact, but it's easier in the end if you embrace it instead.

To facilitate a most smooth and successful transition for everyone involved, heed these tips:

  • As applicable, inform coworkers, managers, clients, business partners and others about what new knowledge and experience the former employee brings to the table upon return.
  • Provide on-the-job training to fill any knowledge, process or skills gaps that exist due to the employee's time away. Those who receive hands-on training as needed will be better equipped and more productive diving back in to the job. Moreover, hands-on training matching participants' interests in professional growth and advancement can help you retain the talent in whom you're reinvesting.
  • Offer ongoing support for all. This helps build individual and collective employee engagement, confidence and satisfaction and contributes to a positive culture and productive workplace.

At TriNet, we help employers and employment specialists manage smooth and successful workplace transitions every day. For insights about how outsourcing all or some of your HR responsibilities can free up your team, speak with a knowledgeable representative today.

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