Rehiring former employees who already know the company culture and how things operate can save time and money. Additionally, rehired employees often bring skills and experience gained from working elsewhere, making them even more valuable assets to the company upon their return.
Now, let’s take a look at the steps involved in rehiring former employees who quit, as well as the advantages and disadvantages you should consider before making that decision. Plus you can download our customizable rehire policy and procedures template.
1. Review Their Exit Interview
When you offboard employees, it’s vital that you conduct exit interviews. These discussions can shed unfiltered light on the employee’s reason for leaving and any internal issues you may need to resolve. If you’re considering rehiring a former employee, review their exit interview and look for information about why they left your company.
Consider their boomerang status—they left once and could leave again. While that’s true of any employee, the reasons for their departure will give you clues about whether they might jump ship again. If the employee left because of a conflict with their manager, will they report to the same person in this new role? If the employee left because they weren’t promoted fast enough, do you have a clear growth plan for them now? This information can be gathered from the employee’s previous exit interview, giving you the necessary tools to ensure the rehired employee is set up for success.
2. Conduct a New Hire Interview
Do not skip the new hire interview. Although you’re dealing with someone who has already worked for the company, you may not be hiring them back for the exact same position—even if they left recently. You need to understand their skills and potential contributions, just as you would with any other applicant.
Conducting an interview will give you the chance to dive deeper into questions you may have based on their exit interview notes and whether their reasons for leaving your company still exist. However, you should also ask the former employee the same questions you would ask of anyone who applied to your open position.
Consider including colleagues in the interview process, especially those the former employee would work closely with or even supervise. Having a panel interview gives you more insight into how other employees feel about rehiring someone. They may also spot red flags you don’t see. Conversely, they could be more enthusiastic about rehiring the former employee.
3. Check References
Just because you know what the employee was like when they worked for you before, that doesn’t mean you know what they’re like today. Whether the former employee left years ago or just a few months ago, people change. Speaking with recent references will help you understand what type of employee the person is today.
Talking to their most recent supervisor can be challenging, especially if the company doesn’t know the employee is looking. The best way to manage this situation is to make an offer conditional upon the successful completion of reference and background checks. This way, if their current manager does not give them a good reference, you can re-evaluate your decision and rescind the job offer.
4. Onboard Your Rehire
You might think that you can eliminate this step or reduce the onboarding process burden for a rehire. That’s not a good idea. Onboarding new hires sets the tone for their employment with your company and ensures you train them on the systems and processes you use. Rehiring a former employee is no different.
Especially if a former employee has been gone for several years, your small business has likely changed a great deal. Colleagues may have left, the software may be different, and you may even offer new or different products. Rehired employees should receive the same onboarding and orientation experience as any other new employee, so they have the tools and knowledge necessary to do the job you’ve hired them to do.
5. Report the Rehire to Your State
Most states require businesses to report new hires. This is done in part to ensure wage withholding orders, such as those for child support or tax garnishments, are enforced.
While every state is a little different, each state requires employers to report new hire information to them within a few weeks after their first day of employment. For most states, this includes rehired employees. However, employees out on leave, such as maternity leave or FMLA leave, would not fall under this requirement.
You can find your state’s reporting location on the US Department of Health & Human Services website.
6. Collect New Hire Paperwork
Even though your rehire worked for your company before and you likely have paperwork on file, it is important to have the former employee resign all documentation. This will include
- Application (if required)
- Employee Handbook with Rehire Policy Information (see policy template)
- W-4 Form
- Payroll Information
- Direct Deposit Paperwork
- Benefits Enrollment Paperwork
- I9 Form
- Emergency Contact Information
- Employment Agreements
Don’t assume and skip this step. Your rehire may have moved, gotten a new bank account, married, etc. It is essential to have updated information on file for every employee.
Should You Rehire a Former Employee?
The decision to rehire a former employee ultimately rests with you and depends on many factors specific to your small business.
Generally speaking, a good candidate for rehire left your company on good terms, had positive performance reviews, and showed respect for their colleagues and supervisors. A poor candidate for rehire, on the other hand, might have been terminated or left on bad terms, had poor performance or tense relationships with their colleagues, or required constant oversight from their supervisor.
Let’s explore a little further by looking at some common advantages and disadvantages of rehiring a former employee.
| Advantages | Disadvantages |
|---|---|
| Previously proven their value | Values and work ethic may have changed |
| Reduces company cost to hire | May expect special treatment |
| May increase existing employee satisfaction | Could create a drop in employee morale |
| Could bring fresh ideas and motivation | May be complacent and less motivated because you chose to rehire them |
When your small business has a new opening to fill, instead of finding a new employee, you may want to look at a former employee as the ideal candidate. Not only do they have the knowledge and skills from their prior experience at your company, but hopefully they’ve gained some new knowledge in the interim that will result in fresh ideas and added value.
Here are some other advantages of rehiring a former employee.
You Know Them
You already know the employee’s work ethic, personality, and skills. They’ve shown you their value and the quality of work they can produce. You also know their red flags and what challenges you may face managing them as well.
They Know You
A former employee knows your company and culture and what you expect of your employees. Even if they would fill a position different from their previous one, they still know what’s expected of them. They also know your company processes and procedures, reducing the time and even some associated costs you’d spend getting them up and running (though, as we mentioned earlier, you should still onboard and train them).
Increased Employee Satisfaction
Many employees leave a company because they think the grass will be greener elsewhere. If a former employee returns, what brings them back says a great deal about your company. Returning could be humbling for the employee but employee satisfaction could increase as existing workers learn that the grass isn’t always greener on the other side.
Although rehiring a former employee can have significant benefits, there are disadvantages you must also consider. For one thing, people change, and the employee may violate your expectations by having a different work ethic and values.
Other disadvantages of rehiring a former employee include:
Could Reduce Employee Morale
If the former employee was overly negative, left on bad terms, or had a poor relationship with their colleagues, rehiring them could cause a drop in employee morale. This is an important consideration because, even if the former employee could bring much-needed skills to your company, their behavior could alienate your existing team. You may even want to discuss this topic with trusted team members and get their take before hiring the former employee.
Prior Employment May Have Ended for a Good Reason
Employment relationships often end for a good reason—poor performance, interpersonal conflicts, or lack of cultural fit. It may have been a long time since the former employee departed and you’ve forgotten the reason they left. This is a good reason to keep detailed personnel files.
They May Feel Entitled
Even though the person has worked for your company before, they’re still technically a new hire if you hire them back. But they may not see it that way—they may feel like they can simply jump back in and pick up where they left off, entitled to special privileges. They may also become combative with other new employees and try to intimidate them into doing things “the old way” even if that’s not how your company operates today.
Questions to Ask Before Rehiring a Former Employee
If you are still undecided about rehiring a former employee, there are a few questions you should ask yourself that could help make that decision.
- Does the former employee hold a grudge? Even though they have expressed an interest in returning to your company, it doesn’t mean they have your company’s best interests in mind. Talk with the former employee’s manager and trusted co-workers to see if there are any red flags with the individual before deciding to rehire.
- Is the former employee wanting back in as a stepping stone to something better? The former employee left your company for a reason. Usually, that is for a better opportunity. Since it didn’t work out and they are wanting to come back you may want to put a longevity clause in your employment contract with the former employee (e.g., six months or more) to ensure they don’t bounce back out the door shortly after being hired.
- Is the former employee truly the best fit for your open opportunity? Even though the former employee knows the company and the workings of the business, they may not always be the best fit for the open position. Make sure to review all applicants equally to ensure you put the best hire in the position.
- Will rehiring a former employee be the best for your overall company culture? The former employee must think that your company is a great place to work or they wouldn’t want to come back. However, it is your job to determine if the employee will fall back into the fold with your other employees and company culture. Rehiring can go one of two ways, it can increase company morale and show you as a fair company, or it could sour current employees who may have gotten passed up for the role.
Tips for Rehiring Former Employees
When rehiring a former employee, there are several things to keep in mind—like having clear guidelines in place, recognizing prior service, and keeping a file of former employees you might like to lure back.
It is best to never hire an individual, whether a new hire or a rehire, without having clear policies and procedures in place. This would include a policy in your employee handbook about rehiring former employees, as well as procedural documents for HR or direct supervisors to follow when rehiring. In your policy, you should make it clear the type of person eligible for rehire, as well as their service recognition status.
Download our sample rehire policy template.
Your former employee may have had tenure with your company before leaving and returning. When you rehire a former employee you may want to consider their previous length of employment when making decisions about whether or not the employee is eligible for certain benefits.
For instance, if you rehire a manager who was receiving incentive bonuses that are generally reserved for employees with one or more years of service, you may want to reinstate their eligibility to participate immediately. Or you may want to override the 90-day wait period for benefits like medical insurance, 401(k), and dental/vision insurance.
There may come a time when you want to reach out to a former employee to see if they are available to come back to work. To know who you might want to reach out to, it is a good idea to keep a file of former employees who have the skills and experience necessary to fill other positions.
This could be a separate folder in your personnel files or a spreadsheet kept by management. Then, when you have a position to fill, you can contact those from your talent pool first. However, be prepared for several no’s before you find a former employee that might be interested in coming back.
Bottom Line
When hiring a former employee, make sure you go through your regular new hire process. It’s a good idea to include colleagues in the process and have a blunt conversation with the former employee to set clear expectations. Some former employees can be a great fit for a role you need to fill—others may not. Ultimately, it depends on many factors unique to your small business. Remember to be honest with yourself and make sure the decision you make reflects your company culture and employees.
