The Importance of Former Employee Relations

In terms of recruiting, is old better than new?

Today’s workers will hold more careers in their lifetime than ever, and it’s not just the Gen Y’ers that are accepting continual reinvention; in fact, the average worker is estimated to hold 20+ jobs in their lifetime!  That’s a lot of people doing a lot of moving!  The unfortunate news for companies is even if they implement every possible means to retain their employees at a higher rate, the fact of the matter remains that the modern employee is likely to move around a lot more.

Reckoning a future where the median time frame for average job tenure will most likely drop, and the average rates of both voluntary and involuntary turnover are likely to rise, companies can start exploring new avenues for attracting talent to help maximize the productivity of their employees.

This leads us to look closely at the stigma of re-recruiting former employees. In the past recruiting former employees held many stigmas. Some felt that they were rewarding disloyal behavior by rehiring. Others felt it was a legal risk. According to a survey of companies by Monster.com, 71% of companies said they are willing to hire former employees, but with caution. 21% of responding companies said they are always willing due to the reduced costs, and another 21% said they would never rehire, because it rewards disloyalty. However, there is significant evidential support to show the pros of rehiring, (especially higher-level workers) may outweigh the cons.

William Bliss wrote in The Business Costs and Impact of Turnover, that even people whose intention is to establish a stable relationship with a new employer are not as likely to tolerate any unfavorable conditions (even perceived) in the workplace.  Consequently they will move on sooner than most, despite their initial predisposition toward longer terms of employment.

SelectMinds, a consulting company based out of New York determined that Fortune 500 companies could save more than $12 million per year simply by increasing the percentage of rehires to 10%-12% of their total hires.

Why is it that rehiring can be so beneficial to the bottom line and the well-being of a company?  To start, Rehiring costs half as much as a new hire.  New hires are 40% less productive than rehires in their first quarter, and rehires get up to speed and re-assimilated into the culture much quicker than a new hire. In terms of retention & tenure; when returning to a former employer, the average tenure of a rehire on their second stint with the company is twice as long as a new hires would be.  Additionally, rehires also send a positive message to current employees when they rejoin the staff; reinforcing that the company is a great place to work, and even those who have left wish to return.

Rehiring higher-level knowledge workers has added benefits as well.  In many industries, almost everyone is connected to everyone else through some way, shape or form.  Maintaining positive relations with former employees, (even if they are never rehired), can help strengthen the company’s image and employment brand.  And in today’s lay-off culture, the companies that maintain amicable relations will be recognized and valued.  Cem Sertoglu, Co-founder of SelectMinds says, “Companies are searching for ways to lay workers off in a smart, humane way – and to avoid simply walking away from, and alienating, the human capital that the company has nurtured, invested in and bonded with.”

Take into consideration the fact that 20% of the information on the internet about your company was not written by your company.  These are customers, vendors, current & former employees sharing their opinions and experiences.  In today’s age of constant communication and social media, maintaining former employee relations can help ensure that the information shared is positive. Even relationships that ended less than amicably can be made less damaging through proper former employee relations.

Rehires, particularly Gen Y’ers have often been able to gain valuable experience and knowledge during their time away from your company, amassing education and valuable experience.  Many times they are able to apply valuable insights from the practices of other industries and even competitors. (Just be sure they are aware if any information is proprietary & cannot be shared with you!)  Additionally, these employees now know exactly what they signing up for when being rehired, so the likelihood of misunderstandings or rough on-boarding periods are minimized.

What are some ways you can start engaging your former employees?

1)      It begins with the exit interview. To start, ensure that the process is done administered in such as way that the information gathered is valuable.  Departing employees often have a desire to help remedy the situations they found unfavorable that are causing them to leave, or are willing to explain in detail why their new position is much more attractive to them.  If using a long-hand form, switch to something more quantifiable.  Utilize rating scales, check boxes & short answer formats, so trends & data can be better identified & measured.

2)      Don’t be afraid to ask probing questions, such as what factors exactly caused them to leave the company, or if they would recommend the company to a friend, or what they would say if they were asked about employment with the company. Ensure them that their exit interview will remain confidential with HR, and it is safe for them to name names or cite specific situations if they feel the need.

3)      Consider creating an online “alumni” network, such as on Linked In or Facebook. Create a positive space where former employees can engage with one another, share news & expertise and interact with the company.  This will help create a positive lasting impression of your company with former employees, even if they are never rehired. It also keeps the door open for your company to tap into their expertise of those with specialized skills or knowledge.

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