40 Percent of Employers Plan to Rehire Some Workers They Laid Off, Survey Finds

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<p><strong>Nashville, Tenn. &mdash; Sept. 30</strong><br /><br />As the economy slowly improves, 40 percent of employers are planning to rehire some former workers they laid off as either full-time employees or as consultants and freelancers to add needed skills, according to a survey by OI Partners, a global career transition and coaching firm with more than 200 locally owned offices in 27 countries. <br /><br />Thirty-seven percent of employers do not plan on rehiring any laid-off workers, and 23 percent are not sure of their plans, according to the survey of 318 organizations throughout North America.<br /><br />Fifty-two percent of employers have at least occasionally rehired laid-off workers as either full-time employees, consultants, or for project work. Sixteen percent of companies have frequently rehired some laid-off employees, and 36 percent have occasionally done so, while 29 percent rarely do, and 19 percent never do.<br /><br />The top reason companies are rehiring, or planning to rehire, laid-off employees is that their skills are known to the employers. Other main reasons for rehiring former employees are: they fit into the company&#39;s culture and environment; there is a shortage of experts in specialty areas such as information technology, marketing and finance; and it is less risky than hiring new employees.<br /><br />As business picks up, employers may first hire employees for temporary and project work before hiring full-time employees, and they are more willing to bring back laid-off workers as contractors or staff. "This attitude represents a major shift in employers&rsquo; rehiring philosophy. In the past, companies would not rehire laid-off employees, but now they are more willing, and more employees may consider returning," said Tim Schoonover, chairman of OI Partners.<br /><br />"Rehiring laid-off employees is a way to keep hiring costs down, since there will not be any fees to be paid. Employers already know the workers&#39; talents and skills, they can get back to performing their old jobs quickly, and [they] have already demonstrated they fit well into the organization," Schoonover added. <br /><br />Financial services companies are most likely to rehire some laid-off employees, while manufacturing companies are the second most likely. Government agencies and nonprofit institutions are least likely to rehire laid-off workers, followed by health care employers.<br /><br />Forty-nine percent of financial services companies in the survey plan to rehire at least some workers who were laid off for reasons unrelated to their performance. Forty-seven percent of manufacturing companies and 42 percent of services companies plan to rehire some laid-off workers. Only 21 percent of government agencies and nonprofits, and 24 percent of health care employers, are planning to rehire some laid-off workers. <br /><br />"Financial services and manufacturing were among the industries affected most by the recession and made the deepest workforce cutbacks. That is why they may be more ready than other sectors to rehire some employees they had to let go," said Schoonover.<br /><br />Employers have come to realize the advantages of rehiring employees they are familiar with over making potential bad hires. "The cost of a bad hire can reach as high as three times an employee&#39;s salary when including severance, unemployment compensation, recruiting expenses, lost business income and productivity, and potential wrongful termination lawsuits," said Schoonover.<br /><br />"It pays for people who were laid off from their employers while in good standing to keep in touch with them, especially if the company&#39;s financial results improve and it begins hiring again," said Schoonover. <br /><br />According to the results of the survey: <br /><br /><strong>Plans to rehire laid-off employees: </strong><br />Yes: 40% plan to rehire some laid-off workers as full-time employees, consultants or freelancers.<br />No: 37% do not plan to hire back any laid-off workers.<br />Not sure: 23% are not sure of their plans.<br /><br /><strong>How often companies have rehired laid-off employees:</strong> <br />Frequently: 16% of employers frequently rehire some laid-off workers.<br />Occasionally: 36% of companies occasionally hire back former employees.<br />Rarely: 29% rarely rehire laid-off employees.<br />Never: Only 19% said they never rehire laid-off workers.<br /><br /><strong>Of those employers that rehire laid-off workers, their reasons for doing so are: </strong><br />72% hire back some laid-off workers because of familiarity with their skills.<br />52% rehire former employees because they fit into the company&#39;s culture and environment.<br />33% rehire laid-off employees because there is a shortage of good specialty experts.<br />31% hire back ex-employees because it is less risky than hiring new workers.<br />Only 14% said they rehire laid-off workers due to a shortage of good management employees.<br /><br /><strong>Plans by industry for rehiring laid-off employees: </strong><br />Financial Services: Yes (49%), No (28%), Not Sure (23%)<br /><br />Manufacturing: Yes (47%), No (22%), Not Sure (31%)<br /><br />Services Businesses: Yes (42%), No (38%), Not Sure (20%)<br /><br />Health Care: Yes (24%), No (41%), Not Sure (35%)<br /><br />Government/Nonprofit: Yes (21%), No (55%), Not Sure (24%) </p>

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