As your business recovers from a crisis and you start hiring again after layoffs, consider these issues to reduce risks and improve success.

Whether
it’s a pandemic
such as COVID-19, an economic downturn or a major market or
industry shift that has challenged your business, letting
valued team members go is always a tough decision to make.

If
you’ve had to lay off a significant portion of your workforce recently, you’re
all too familiar with this unfortunate situation.

However,
the conditions that force your business to reduce its headcount can evolve and
improve over time.

As
your business recovers from a crisis and you consider hiring again after
layoffs, there are critical issues you need to think about and plan for to
mitigate the risks to your company and increase your odds of long-term success.

Recognizing when it’s a good time to hire again after layoffs

Ask
yourself a few questions:

  • Is your product
    or service in peak demand?
  • Are you currently
    unable to meet this demand?
  • Do you expect
    favorable market conditions to continue? (In other words, demand for your
    product or service isn’t a short-term, crisis-related phenomenon.)
  • Are your employees overworked?
  • Have you been
    unable to replace vital skills within your team since your last round of
    layoffs?

If
you can initially answer yes to most of these questions, it may be time to ramp up
your staffing levels.

But
let’s dive in deeper.

Alongside
your business leaders and other key stakeholders, conduct a thorough review of
your:

Then,
leveraging anticipated business scenarios, develop an operational roadmap to
guide your business forward while enabling you to continue delivering on your
customer promise. This plan should extend 12 to 18 months into the future.
Rather than allowing the passage of time to dictate tactical decisions such as
hiring more people, instead rely on reaching certain metrics or milestones.

This
will help to prevent your business from needing to continually catch up or get
too far ahead of market conditions. Hiring will feel more proactive, planned and
purposeful versus reactive, unexpected and rushed.

Selecting the type of employees
you’ll hire

If,
ultimately, the spike in demand for your product or service is crisis related
or you’re unsure about the permanence of growth trends, you may want to stick
with hiring temporary workers, contractors or part-time
employees for the time being.

This
arrangement offers you certain benefits:

  • You’re able to
    quickly adapt to changing workflows.
  • It’s
    an opportunity for you to assess whether a position is important or necessary enough
    to sustain for the long term.
  • It reduces your
    expenses and commitments during a period of uncertainty. After all, no employer
    wants to lay off full-time workers repeatedly.
  • You get to
    “audition” these workers before hiring them permanently or expanding their
    hours and role.

However,
keep in mind that non-full-time employees may not feel the same level of
assimilation within and loyalty to your company.

Targeting the right number of new
employees

The right number of employees to hire at any single time is dependent on:

  • Demand
  • Workload
  • Affordability

Determine, as accurately as you can, the demand for your product or
service. Examine your current production volume and leverage trend data to predict
future production volume. You’ll need to understand the variables that
influence normal trends in business cycles and adjust accordingly.

Calculate the amount of work that the average employee performs in a
certain period of time (yearly, monthly or weekly). This could be as simple as
adding up the scheduled work hours for each employee. Factor in non-productive
time, such as:

  • Sick
    leave
  • Holidays
  • Vacations
  • Scheduled
    breaks

How many more people do you need to accommodate the anticipated demand?

Can you cluster tasks that need to get done and identify clear
responsibilities within specific job titles? Do you understand how new roles fit within your
organization chart and reporting structure?

Solicit input from your frontline managers and other team members about
how many additional people they think the company needs. They’ll bring a
different perspective and possibly uncover insights you may not have thought of
that could benefit decision-making around productivity, volume and
efficiencies.

In deciding whether you can afford more employees, think about all the associated
costs:

  • Recruiting
    and interviewing
  • Relocation
  • Training
  • Salary
  • Benefits

Also consider the revenue each new employee may bring in – as well as the
employee’s potential to save your company money.

Deciding how often to hire

Hiring shouldn’t be based on periods of time you selected arbitrarily.
Rather, it’s about business need.

If you’ve planned
business scenarios and have an operational roadmap in place, reaching
certain metrics or milestones should trigger the need for a specific new hire.  

Getting the timing right is important so that:

  • You
    don’t get caught in a bind, desperately needing an employee who isn’t there
    yet.
  • Your
    new employees are used to their full effectiveness. You don’t want to hire them
    too soon, and then they don’t have enough to do.
  • You
    can pause and properly assess whether your resources are aligned with demand.
  • Your
    HR team is able to absorb the volume of new hires and ensure that they’re
    setting up these individuals for success during the crucial onboarding period.

Remember:

  • On
    average, it takes 24 days to hire a new employee.
  • Then
    it takes 60 to 90 days, on average, to fully onboard each new hire, integrate
    them into their roles and the company culture, and have them ready to work.

Rehiring former employees

The pool of job candidates is vast. Finding the right employees among
them can be a time-consuming, costly process. That’s why, when it’s time to
hire again, employers often first turn to an obvious group: The people they had
to lay off despite valuing and trusting them and wanting to retain them.

But should you rehire
former employees as your business recovers from a crisis?

It depends.

Pros of rehiring former employees:

  • You know their personalities, capabilities and work ethic well. There aren’t any surprises.
  • They already understand your company – the mission, values, culture and structure – and are familiar with their colleagues. You already know whether they’re a good fit for the team.
  • Unless positions and responsibilities have changed, they require minimal training. They’ve already held the job and have acquired a track record of good performance.
  • If they’ve been laid off and express interest in returning to your company, you know their level of commitment is high.
  • You can demonstrate to the rest of your staff that you’re loyal to current and past team members alike and will do what you can to help them in tough situations, which can boost trust and morale across the board.
  • You have an opportunity to save time and money on recruiting and training, and get high-performing employees to work faster with minimal integration issues.
  • Per the Hiring Incentives to Restore Employment (HIRE) Act, you can claim certain tax exemptions for hiring someone on unemployment – and it gets these employees off your unemployment insurance.

Cons of rehiring former employees:

  • A
    past employee may harbor resentment at being let go. Because negativity can be
    contagious, bringing a disgruntled person back could affect morale throughout
    your team. Be sure to screen for this during interviews.
  • A
    past employee could be actively looking for another job, but accept a job with
    your company as a stopgap. In this case, you’ll have to replace them in short
    order. (Of course, this could be true of any new hire.)
  • You
    could overlook new talent and potentially better performers in the marketplace.
    This is especially true in labor markets that heavily favor employers – where
    available job candidates outnumber open positions, and you can have your pick
    of qualified applicants.
  • If
    your company has undergone changes in business model and structure, as well as
    job titles and responsibilities, former employees may be fixated on the previous
    ways of doing things and have a hard time adjusting. Bringing in new talent may
    prove more beneficial in the long term.

You should already have guidelines in place covering the rehiring of
former employees. These guidelines should address issues such as:

  • How
    you will handle benefits in light of the disruption in employment
  • Whether
    rehired employees will complete the same onboarding procedures, such as drug
    tests and background checks, as brand-new hires
  • What
    additional paperwork they need to fill out to meet compliance requirements

Avoiding wrongful termination
claims

As you ramp up hiring efforts, there’s a big issue you need to watch out
for: Wrongful termination claims from employees you laid off.

If you start hiring again within six months after layoffs, you could
expose your company to complaints that the layoffs were merely an excuse for
getting rid of employees for illegal reasons. These complaints could have merit
if:

  • Specific
    positions that were previously eliminated are now being filled again
  • The
    replacements for these positions are younger, less experienced or of a
    different race, gender or disability status, for example

However, unless your company policy states otherwise or you have
collective bargaining agreements in place, you’re not obligated to rehire
former employees. There could be perfectly valid reasons why you don’t seek out
a former employee to return to your company.

How you can protect your company:

  • Don’t make any promises to laid-off employees about what you can do to help them or discuss their future possibilities with the company when economic or market conditions change.
  • Document the reasons why you eliminated certain roles, and why it’s now necessary for your company to hire again after layoffs.
  • Treat former employees and other job applicants equally.

Keeping morale up

Another big risk you could face is the turnover associated with current
employees leaving.

From the moment their colleagues are let go, a crisis is a period of
great uncertainty and stress for your remaining staff. They could be worried
about their own jobs and personal finances. If a laid-off colleague was a good
friend or frequent collaborator on work projects, they could be missing that individual
and their camaraderie in the workplace.

However, even as your business recovers and starts adding back employees,
their stress can continue. Your employees may have to take on an increased
workload – including responsibilities outside their normal routine – for
awhile. They have to adjust to potentially new business models or processes, or  restructured teams – changes that may not be
welcome to them. They also have to adapt to new hires and, in some cases, help to
train them.

As a business leader, you’ll have to maintain
morale despite downsizing and upsizing.

Regularly communicate your commitment to both your employees and the
health of the organization. Explain your reasons for taking certain actions and
how they’re helping the company to weather the crisis. Your transparency can:

  • Reduce
    their anxiety about the unknown.
  • Enable
    them to make informed personal decisions.
  • Help
    them connect their daily efforts to company objectives, and understand how they
    make a difference and how their performance is being measured.

Throughout this process, you can prevent dips in morale by:

  • Holding
    quarterly meetings during which you provide data about the fiscal health of the
    company and give updates on what measures can be expected. The truth may make
    some leave, but it can restore some trust, lessen rumors and keep employees
    engaged.
  • Establishing
    open-door policies between leadership and employees. This gives employees a
    means of sharing their concerns and asking questions.
  • Offering
    opportunities for small group meetings or one-on-one meetings guided by leaders.
  • Conducting
    engagement surveys or focus groups, which can clue you in on what’s troubling
    employees and how you can fix these issues, as well as assist in building the
    culture of trust and accountability in the organization.

Summing it all up

Is your business on the rebound from a crisis? Are you ready to begin hiring again after layoffs? Don’t run out and recruit a bunch of employees just yet. First figure out whether your company:

  • Has sufficient
    demand in the marketplace and workload to support new hires
  • Has a compelling
    business case for filling specific positions
  • Can afford the
    known and hidden costs of adding more employees
  • Can coordinate
    hiring for a position with achieving certain metrics or milestones
  • Really needs
    full-time employees, or could benefit from temporary workers, contractors or
    part-time workers
  • Wants to pursue
    former employees and, if so, has the policies in place to govern the rehire
    process
  • Has taken other measures
    to reduce risk exposure

Doing
these things will better ensure your company’s growth and ability to retain
employees are more permanent.

For
more information on expediting your company’s recovery from a crisis, download our
free magazine: The
Insperity guide to crisis management.

Additional contributors: Lisa Rosh, PhD and Rodney Satterwhite, MBA

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