Financial Services & Manufacturing Companies Are Most Likely To Rehire Workers

Portland, OR - Sept. 22, 2009 - As the economy slowly improves, 40% 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-Pathways (Portland), a global career transition and coaching firm.

37% of employers do not plan on rehiring any laid-off workers, and 23% are not sure of their plans, according to the survey of 318 organizations.

52% of employers have at least occasionally rehired laid-off workers as either full-time employees, consultants, or for project work. 16% of companies have frequently rehired some laid-off employees, and 36% have occasionally done so, while 29% rarely do, and 19% never do.

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'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.

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’ 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 Jean Erickson Walker, Managing Partner of OI Partners-Pathways (Portland). http://www.oipartners.net/

"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' talents and skills, they can get back to performing their old jobs quickly, and have already demonstrated they fit well into the organization," Walker added.

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.

49% of financial services companies in the survey plan to rehire at least some workers who were laid off for reasons unrelated to their performance. 47% of manufacturing companies and 42% of services companies plan to rehire some laid-off workers. Only 21% of government agencies and nonprofits, and 24% of health care employers, are planning to rehire some laid-off workers.

"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 re-hire some employees they had to let go," added Walker.

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's salary when including severance, unemployment compensation, recruiting expenses, lost business income and productivity, and potential wrongful termination lawsuits," said Walker.

"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's financial results improve and it begins hiring again," said Walker.

According to the results of the survey:

Plans to rehire laid off employees:
Yes: 40% plan to rehire some laid-off workers as full-time employees, consultants, or freelancers
No: 37% do not plan to hire back any laid-off workers Not Sure: 23% are not sure of their plans

How often companies have rehired laid-off employees:
Frequently: 16% of employers frequently rehire some laid-off workers
Occasionally: 36% of companies occasionally hire back former employees
Rarely: 29% rarely rehire laid-off employees
Never: Only 19% said they never rehire laid-off workers

Of those employers that re-hire laid-off workers, their reasons for doing so are:
72% hire back some laid-off workers because of familiarity with their skills 52% rehire former employees because they fit into the company's culture and environment 33% rehire laid-off employees because there is a shortage of good specialty experts 31% hire back ex-employees because it is less risky than hiring new workers Only 14% said they rehire laid-off workers due to a shortage of good management employees

Plans by industry for rehiring laid-off employees:
Financial Services: Yes (49%), No (28%), Not Sure (23%)

Manufacturing: Yes (47%), No (22%), Not Sure (31%)

Services Businesses: Yes (42%), No (38%), Not Sure (20%)

Health Care: Yes (24%), No (41%), Not Sure (35%)

Government/Nonprofit: Yes (21%), No (55%), Not Sure (24%)

OI Partners Newsletter: Performance Managment & Measurement

Performance Management and Measurement

September 2009

In this issue:

• Onboarding for Performance Success
• Motivating Your Workforce during Times of Adversity
• How to Make Your Performance Measurement Plan Realistic
• Performance Alignment and Accountability Process
• A Forecast on the Future of Rewards and Recognition

Given the pressures of the current economy, some may believe a door is opened for companies to reduce retention efforts without any threat to losing employees, even top-producing employees. Some employers may feel that employees should just be happy they have a job.

However, in times like these, just the opposite is true. Organizations are called to recalibrate their thinking around performance management and employee engagement.

The September newsletter is focused on providing a series of thoughts and practical suggestions for creating dynamic and powerful work cultures that engage employees and drive performance results. As fall arrives, it's an excellent time to recalibrate ones' thinking around the issues of performance management.

Happy Fall!

Ronald F. Ennis, Ph.D., CMF
Jean Erickson Walker, Ed.D., CMF

OI Partners Newsletter: Performance Management & Measurement Summary

Onboarding for Performance Success
By investing in onboarding, leaders demonstrate a deep commitment to new employees which ultimately results in a fully-integrated and engaged talent base. Here are four types of onboarding practices.

Motivating Your Workforce during Times of Adversity
Great leaders, striving to boost morale, know that a motivated workforce translates into better corporate performance. In these trying days of uncertainty, we see leaders typically using four methods to motivate employees.

How to Make Your Performance Measurement Plan Realistic
Measurement is a process that takes time and effort to do properly. You're better off not doing it at all if you don't do it properly. Here are five tips for making your performance measurement plan realistic.

Performance Alignment and Accountability Process
Too many performance appraisal processes today are fraught with difficulties which can negatively impact an employee's performance. What is needed is a process that results in concrete performance discussions between managers and employees. These nine critical elements help achieve that kind of process.

A Forecast on the Future of Rewards and Recognition
Decreasing revenues, shrinking profits, pressure from shareholders and competition are testing the mettle of companies. In order to retain the best employees, companies must narrow the focus of their rewards programs while expanding them beyond typical merit-pay and spot bonus programs.


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