As you navigate the challenges of hiring after layoffs, it is important to adopt a transparent and empathetic approach toward both existing employees and potential new hires. Hiring after a layoff requires careful navigation and strategic actions to rebuild trust and attractiveness for job seekers, as well as to avoid accusations of illegal practices or harm to your business’s reputation.
Be sure to reassess your hiring needs and goals after a layoff. Instead of rushing to fill vacant positions, take the time to evaluate if any structural changes are needed or if certain roles could be consolidated or refined.
How Layoffs Affect Future Hiring
There are many legitimate reasons to lay off employees—economic downturn, mergers or acquisitions, relocation, technological advances, global growth, or even a change in business focus. However, when a company goes through a period of layoffs, it can suffer reputational damage that may deter potential candidates from applying in the future.
- Layoffs disrupt team dynamics and company culture.
- Potential hires may question the company’s values and commitment to its employees.
- Laid-off employees may share negative experiences on social media and networking channels.
- Current employees may have lower motivation levels, leading to lower productivity.
- Decreased productivity can result in decreased profit, which can affect a company’s ability to hire in the future.
Recruitment Strategies for Rebuilding Your Team After a Layoff
After a layoff, your business will likely rebound and there will be a need to hire new employees. To attract top talent, you must navigate a delicate balance between financial stability and maintaining a positive employer brand.
Recognize When You Are Ready
Being ready to hire again after a layoff means more than just having an overload of work. You need to ask the following questions:
- Is my product or service in high demand?
- Are the financials of the company on the rise?
- Are my employees feeling burnout due to being overworked?
- Are skills lacking that need to be filled?
- Do I have the budget for one or more salaries, plus benefits?
Reevaluate Job Roles and Responsibilities
Evaluating and restructuring the job roles and responsibilities in your company provides an opportunity to analyze your current needs and how they may have shifted. This ensures that each position aligns with your company’s strategic goals and objectives for the future.
This is also the ideal time to consider if there are any redundancies or gaps in your existing job descriptions. Carefully review each job description, making sure they are clear and concise and fully paint a picture of the responsibilities of each role. If you need help creating job descriptions, visit our guide and download our free template.
Reach Out to Laid-off Employees From Other Companies
If you are in an industry that is notorious for laying off employees, such as the IT field, consider reaching out to employees who have recently been laid off from other companies. These employees are usually eager to get back into the workforce and will bring industry knowledge and skills to your company.
However, understand that these employees may be wary of joining your team if your company also has a history of layoffs. They may be fearful the same thing will happen to them again. To circumvent this, show these individuals proof that your company has rebounded and is now in a period of stability. Additionally, offer them opportunities for growth within your company and learning and development opportunities to enhance their careers.
Use Temporary Employees to Fill the Gap
Instead of hiring new full-time, permanent employees after a layoff, consider hiring temporary employees. These employees, generally freelancers, independent contract workers, or part-time employees, will work on a limited contract and generally have the skills needed to complete the job. Additionally, temporary employees are paid differently—they are paid an hourly rate or per project rate, and you are not required to withhold and file taxes on their behalf.
Although temporary employees work their own schedule—legally you cannot dictate the number of hours worked or the schedule of a temporary employee—they can fill in gaps. Plus, if they fit in well with your company culture and are good at their job, you can consider hiring them permanently as a full-time employee with a salary and benefits package.
Consider Rehiring Employees Formerly Laid Off
If a former employee was laid off due to unforeseen circumstances, and not their job performance, you may want to reach out and offer their job back to them. These former employees already understand the workings of your company, have lived your company culture, and already understand the job requirements.
However, be prepared to be met with a bit of resistance. The former employee may be wary that their job is not secure. Additionally, they may ask for more money than they were currently making or increased benefits, as they probably feel they are now doing you a favor by returning.
Best Practices When Hiring After a Layoff
Hiring people after a layoff is not too different from hiring new employees in terms of how you advertise and interview. However, there are some best practices to keep in mind that can help you stay on the right side of the law, as well as protect your reputation with employees and customers.
- Be transparent: Explain to current employees what is different about the open positions, and how they will help your company move forward. Also, it is advised that you indicate what has changed that now allows for hiring (e.g., increased profit).
- Wait to hire: While there’s no law about how long after a layoff you should wait to hire someone, it’s best to wait about six months. This avoids the impression that you used a layoff as an excuse to get rid of a specific class of employees or replace them.
- Use caution when rehiring former workers: If you had to let go of a great employee, consider reaching out to them to reapply. Understand, however, that you may be met with resistance from the former employee.
- Be prepared for questions: Job seekers who know about your recent layoffs may have questions about their job security. Be prepared to show them that your company is stable and there is potential for growth.
Legal Considerations When Hiring After Layoffs
There are some legal considerations when hiring after layoffs, however, with strong policies in place you can avoid some of them.
Wrongful Termination
A wrongful termination could result if accusations are brought against your company that layoffs were a way to illegally get rid of employees. This is most likely to be brought up if hiring for the same or similar positions within a short time after the layoff. Be sure to keep accurate records of all disciplinary actions against employees and document performance improvement plans to ensure that you have some defense against this case.
Discrimination
Current or former employees may claim that layoffs were a way to remove employees based on a protected class—age, gender, disabilities, or other discriminatory factors. As such, it’s important to make sure you are practicing non-biased hiring practices and training employees and managers on bias in the workplace.
Unfair Wage Policies
If current employees took a pay cut during the layoffs (or if new employees are being hired at higher wages for similar work), then you could be sued. A good way to eliminate this issue is to have transparent pay policies and talk with your employees about any apparent discrepancies in pay. For example, you may need to pay a higher wage to a new employee who brings in an advanced skill set.
FMLA Laws and Benefits Management
If you decide to rehire a formerly laid-off employee, ensure you are meeting ACA and FMLA requirements for rehires. Depending on how long they were laid off, their hours from their previous employment with you may carry to their new employment. Additionally, retirement accounts and other benefits may have rules about rehires; for instance, previous time of service may have to be considered when reinstating these benefits.
Hiring After Layoffs Frequently Asked Questions (FAQs)
Yes, but hiring after layoffs should be done with discretion and concern for current and former employees. It’s best handled when you are open about the reasons for layoffs and hirings, and have let a suitable time pass—or are hiring for different positions that reflect changes in the company’s direction.
Yes, if they are not for the same position. For example, say your company changes the software it develops. It may lay off programmers and sales engineers for the old software while hiring more marketing and sales personnel to promote the new program.
No, but if you hire too soon after laying off someone for the same (or similar) position, it can open you to a lawsuit.
Bottom Line
It’s not uncommon to hire new employees after a layoff. However, it should be done with care to make sure you do not get accused of discrimination or wage discrepancies. While it’s best to wait about six months before hiring after a layoff, you can hire for different positions to help your company grow or pivot. Maintain transparency, consider current workers’ feelings (and wages), and understand the laws and regulations involved in hiring or rehiring an employee.
