Companies must decide whether to hire ex-employees or look for new talent post-pandemic

The COVID-19 pandemic has devastated U.S. labor markets, with 9.4 million jobs lost in 2020. As the economy recovers, many organizations seeking to rebuild their workforce will face a common question: Do we hire back our ex-employees, or look for new talent?

The case for hiring back employees who had been laid off or quit seems compelling and obvious. Hiring them will decrease recruiting and onboarding costs. Recruiting an old employee also will feel like a safe move—you know them, they know you, and they will be easy to reintegrate into the organization. They even may have gained new skills or perspectives in the interim. And besides, it seems only fair.

But research suggests that the situation isn’t quite that simple, The Wall Street Journal reports

Studies from the University of Missouri and Carnegie Mellon University business schools show that most, but not all, former employees perform no better than new hires—and are typically more expensive. What’s more, although many rehired workers feel more engaged and loyal to the organization, that may not be true in a post-coronavirus era, when fired workers are likely going to feel betrayed and less committed to their former and current employer. 

However, research from a team led by JR Keller, a professor at Cornell University, studying a large health care organization in the U.S. from 2009 to 2016 did find that rehired employees outperformed new hires, as measured by manager-rated performance. The performance gains were noticed only when the rehires returned to the same manager, and when they worked in one of two kinds of jobs: those that required building and maintaining interpersonal relationships with others in the organization, such as human-resources specialists, customer-service representatives and lawyers, and those that required higher administrative coordination, such as purchasing managers, IT project managers and civil and environmental engineers. Read the full story.