Employee turnover is one of the biggest and most costly issues facing employers. According to business consultant William G. Bliss, who also authored the article "Cost of Employee Turnover," the cost of turnover is on average 1.5 times the employee's annual salary and can be as high as 2.5 times the employee's salary for management and salespeople.
There are a few reasons why employee turnover is so expensive for all parties involved. One is the cost of training. Another is the time commitment it takes both trainee and trainer to bring the new employee up to speed. While these parties are focused on training, they are both less productive – another expense for the company to mitigate.
One solution to employee turnover is rehiring employees who have left a company previously, known as "boomerang employees." Eilene Zimmerman, author of the article "The Boom in Boomerangs," reports that a boomerang employee can be rehired at "a third to two-thirds of the cost of bringing in a new recruit." One of the most difficult parts of a business owner's or manager's job is hiring quality employees. Even more difficult can be knowing when to rehire a former employee.
Reevaluate the circumstances surrounding the employee's departure and review any documentation available. Was the departure voluntary? If the employee's services were terminated by management, determine if the reason(s) were due to a temporary issue, like low seasonal work flow or problems stemming from a fluke family issue like death or divorce. However, if the causes were more deep-rooted, like consistent tardiness, insubordination or even theft or drug use, you could face similar problems down the road.
Evaluate the risks and rewards of rehiring an employee. Does the position require significant educational requirements and extensive on-the-job-training? If so, it may be worthwhile to overlook a few minor past transgressions to forgo the cost of finding and training a new employee.
It is legal, and in some cases required, for employers to run background checks on employees as a precursor to hire. Some businesses mandate that employees receive random, periodic drug testing as a condition of employment. This is a basic screening procedure used to eliminate the most undesirable job candidates. If you're considering rehiring an employee with documented drug problems, this is an absolute must.
Get personal and professional references. If the employee has worked for anyone in the interim, be sure to talk to the employer. Take caution if your potential rehire wishes to withhold references.
Keep in mind that some employers opt to say very little about their former employees, and that there are a variety of reasons for making this choice. Some do it to avoid tension with the former employees. Others do it to disguise any negative references the former employees might have about them. Often, companies have policies in place to only confirm the dates of employment as a means to reduce risk of any litigation from employees believing that things were said that prevented them from securing new employment.
Ask the potential rehires why they wish to return. According to Workforce Management, "rehires [are] 40 percent more productive at work and tend to stay on the job longer" than their new-hire counterparts. The reasoning is that rehired employees have now explored the marketplace and are more ready to settle down. They may have all the answers to all your questions. Let them tell their side of the story and explain why they will be an asset to your company again.