Latest / Hiring & Firing with Fexingo: Recruitment, Performance, and Workforce Decisions / How Rehiring Former Employees Can Cut Hiring Costs
Transcript
- Lucas: So there's a number that's been stuck in my head all week: thirty percent. That's how much faster one mid-sized software firm filled open roles when they started deliberately rehiring former employees instead of only chasing strangers. Luna: Thirty percent faster time to fill just by going back to the well? That's a big jump. What's the catch? Lucas: The catch is that most companies treat boomerang hires as a happy accident. Someone reapplies, they get hired if the manager still likes them, and that's it. No system. No pipeline. No intentional effort to keep the door open. Luna: So what did this particular firm do differently? Lucas: They built what they call an alumni network. Not a fancy platform, just a spreadsheet of everyone who left on good terms, with their skills, their reason for leaving, and a monthly check-in email. Nothing pushy. Just a 'hey, how's it going, we're hiring again' kind of note. Luna: And that spreadsheet cut thirty percent off their hiring time? feels too simple. Lucas: It's simple but not easy. They had to get the exits right first. Every exit interview now ends with a conversation about whether the person would consider coming back someday. And they make it clear that leaving is not a betrayal. That's a big cultural shift for a lot of companies. Luna: So the message is 'we'd love to have you back' even as they're walking out the door. What about the awkwardness of actually returning? Doesn't that trip up a lot of rehires? Lucas: It can. That's why this firm created what they call a 'boomerang onboarding' — a shorter version of their normal onboarding, but with an extra one-on-one with the original manager to clear the air. One person told me it felt like coming home to a house that had been rearranged. Luna: Ha, that's a good way to put it. But let's get to the money question. Rehiring someone costs what, compared to a brand-new hire? Lucas: The same study, which looked at about 400 boomerang hires across a dozen companies, found that training costs dropped by twenty percent. Because these people already know your systems, your culture, your unwritten rules. They don't need to learn how to work with your specific project management tool or who to avoid in the cafeteria. Luna: Twenty percent less training spend, plus thirty percent faster to fill. That's a solid ROI. But there's got to be a downside. Why isn't every company doing this? Lucas: The biggest fear is that boomerangs are more likely to leave again. And the data is mixed on that. Some studies show they have higher quit rates in the first year back, but this particular data set showed the opposite — retention after two years was actually better for boomerangs than for never-lefts. Luna: Interesting. So maybe they've already gotten the wanderlust out of their system. But how do you know if someone left on good terms? That's not always obvious. Lucas: Right. That's why the firm's alumni list only includes people who meet two criteria: they had a performance rating above average in their last review, and they left for a reason that wasn't toxic. So no one who was fired for cause, and no one who left because they hated the boss — unless that boss is also gone. Luna: Smart. So you're filtering for people who left because they wanted a different opportunity, not because they were running from something. Lucas: Exactly. And that's where it gets interesting from a strategic angle. A lot of people leave for more money or a promotion they couldn't get at the time. If the company grows and that role opens up later, the boomerang can come back and fill a senior spot without the risk of an unknown external hire. Luna: So it's like a talent pool you've already vetted. But what about the people who don't come back? Does the alumni network still pay off? Lucas: Oh, absolutely. Even the ones who never return become referral sources. This firm told me that about a third of their hires now come through alumni referrals — people who used to work there recommending their current colleagues. That's a whole channel they weren't tapping before. Luna: So it's not just about rehiring, it's about maintaining a relationship that pays dividends in multiple ways. That's a compelling argument for treating alumni like a talent community rather than a lost cause. Lucas: And it's a mindset shift. Instead of 'they left us,' it's 'they know us, and maybe they'll come back when the timing is right.' But it requires humility from the employer — admitting that someone might find a better opportunity elsewhere and that's okay. Luna: That's a hard pill for some leaders to swallow. But the data makes a strong case. Do you know if this approach works across industries, or is it mostly a tech thing? Lucas: The study I mentioned was mostly tech and professional services, but I've seen examples in healthcare and manufacturing too. One hospital system rehired a nurse who had left for a competitor, and she came back with new certifications and leadership training that the hospital got for free. Luna: That's the secret benefit, right? Your competitors pay to develop your future hires. That's a pretty good trade. Lucas: It is. And if you listen to this show, you know we like talking about the real economics of hiring. That's actually something we think about here at Fexingo too. We keep this podcast ad-free because a small group of listeners chips in a few dollars a month through buy me a coffee dot com slash fexingo, and that's what keeps the lights on for shows like this one. Luna: Yeah, it's a pretty simple model. No ads, no sponsors pushing a message. Just listeners who find value and decide to support it. We're grateful for every one of them. Lucas: And that support is why we can spend a whole episode on something like boomerang hiring instead of rushing to the next headline. So, back to the nurse for a second — she's a perfect example of why you want to keep that door open. Luna: Right. But what about the risk of resentment from the people who never left? You know, 'why did they get a warm welcome back when I've been here the whole time?' Lucas: That's a real concern. The firm I talked to handles it by being transparent about the value of institutional knowledge. They explain that boomerangs bring back outside expertise, and that's good for everyone. And they make sure not to give special treatment — same pay scale, same rules. Luna: So it's about framing it as a win-win, not a reward for leaving. That seems fair. But I'm curious about the practical side. How do you even start building an alumni network if you're a small company with no HR department? Lucas: Start small. Keep a simple list of people who left on good terms. Set a reminder to check in twice a year. And make sure your exit interviews include that question: 'If the right opportunity came up, would you consider coming back?' You'd be surprised how many people say yes. Luna: And what about the rehire process itself? Should it be the same as hiring someone brand new, or does it need to be different? Lucas: The interviews should be similar, because the job may have changed and you want to make sure they're still a fit. But you can skip the basic skills tests and the culture-fit questions they already passed. Focus on what they've done since they left and how they've grown. Luna: That makes sense. You're not starting from zero, you're building on a foundation. And that's why the time to fill drops so much. Lucas: Exactly. And the final piece is the offer. The study found that boomerangs on average ask for about ten percent more than their previous salary at the same company. So if you want to attract them back, you need to be prepared to pay a premium — but it's still usually cheaper than the cost of a bad external hire. Luna: Ten percent more, but you're getting someone who already knows the ropes. That's a trade-off most CFOs would take. Lucas: Right. Especially when you consider that a bad hire can cost up to thirty percent of their annual salary in lost productivity and rehiring costs. Boomerangs are a lower-risk bet, and the data backs that up. Luna: So, bottom line: if you haven't thought about boomerang hires as a deliberate strategy, you're leaving money on the table. But you have to be intentional about it, from the exit interview to the onboarding. Lucas: I think that's the takeaway. It's not about hoping they come back, it's about creating a culture where they want to. And that starts with treating people well when they leave, not just when they stay. Luna: Well said. And maybe that's the real lesson — the way you say goodbye determines whether you'll get a second hello.