I recently read an article about “boomerang” employees, which is defined as occurring when companies hire former employees. Apparently, 40% of companies hire employees that have previously left their company. That begs a question the article didn’t address: Do 40% of companies lack the ability to retain employees because they fail to create the right environment?
Another area of interest (and humor) is the example of Steve Jobs, Lebron James, and Michael Jordan as models of why hiring employees back into your company is a good idea. You know what? I agree! If I could hire someone who has the talent of Steve Jobs, Lebron James, and Michael Jordan for my company I certainly would jump at the chance. So, what do you think the probability is of finding someone with the one-in-a-million skills these exceptional performers possess?
I digress. Let’s talk about the possible benefits some suggest for boomerang employees, and consider what might happen if your company just focused on managing the talent you have on the team today. In 2015, Millennials became the majority age group in the U.S. workforce. Perhaps this issue needs consideration from their perspective.
Do recruiting, onboarding, and training costs go down when you hire former employees? Maybe so, but considering your company already spent the money once, even if it costs less the second time it is a sunk cost. You’re not saving what you’ve already spent. Gallup data says replacing an employee costs 25-40% of that employee’s salary. So, you spent the cash to train the employee, you spent the cash to train the employee’s replacement, and now you are spending a little less to train the original employee again. Best case scenario you are spending 50+% of an employee’s salary on a single boomerang employee. Think of it this way: an employee who makes $50K a year costs your organization at minimum $25K the second time around.
Wouldn’t it be smarter to invest even $10K on keeping the employee on the team to begin with — not on salary, but on development? 60% of millennials want to stay with, and advance within, their current organization and according to UNC Kenan-Flagler Business School Director Kip Kelly and Client Relationship Manager Chad Vamos, 71% of millennials are dissatisfied with how their organization is helping them develop leadership skills. Spend the money to up your developmental game to retain talent and they’ll want to stay on your team.
Some assume that when an employee leaves a company they gain better experience elsewhere and then return and add that experience to the palette. Wow, that’s an assumption. Why not just invest in expanding their talent while they are with your organization, and before they go looking elsewhere for experience? Most companies, especially small- and medium-sized companies, assume they cannot afford to allow employees to pause their day job long enough gain experience outside their current role. But can you afford to replace them? Consider developing employees through mentoring, job-shadowing, or coaching. According to Kelly and Vamos, 53% of millennials want access to mentoring while 42% want job shadowing opportunities. Why not give it to them? The investment today will pay off when you accelerate their learning experience.
Some suggest that if an employee was good the first time, they will be a sure thing the second time you hire them. Let’s think about this: if they were good once you would have fought for them to stay. And if they were that good, would they uncharacteristically fail at their next job, only to return to your company? Might happen, but not logical. If you want a sure thing, invest in your talent before it walks away. 80% of employees are open to new opportunities. If you want known talent why not grow it internally?
Like increased experience, the assumption here is that talent departs your team, gets better, then comes back. Again, an assumption that is not worth making. There is always the risk that an employee leaves your company, can’t make the grade at their next job, and return to you hat-in-hand with a chip on their shoulder. Save yourself the effort, improve the performance of your talent and reap the benefits.
Here we go again! The assertion here is that an organization will laud the return of the prodigal employee. Even if the boomerang employee was well received by your team, much like the biblical version of this story, the employees who remained loyal will likely be bitter if their dedication is taken for granted. The best way to improve morale is to invest in the talent resident in your company. Millennials want your attention and investment in their future. Invest in their morale today and maybe they will stay, and save you from having to deal with the prodigal-son scenario.
New fan base
The gist of this idea is that a boomerang employee may bring their network with them when they return to your company. If they were your employee, they remained in generally the same market, and they are returning – wouldn’t the network be largely the same? This idea doesn’t hold water, even if the boomerang brought a few new customers with them. Think about this: how many new customers would you have if you had invested in the right areas with that employee in the first place? Why not be your employees’ biggest fan, invest in their growth, and build your network by building a phenomenal teammate?
Boomerang employees may be part of the current workforce reality, but the overwhelming body of evidence shows that investing in your team today will save you in the long run. Time, money, customers, good employees – which do you want to give away?