As seen on ERE Media, February 19, 2018.
Most have never heard of “stranger candidates.” However, most firms hire almost exclusively from a group of candidates who they knew nothing about before they applied to your firm (aka strangers). Because strangers can easily fool you, I have found that this lack of deep knowledge about candidates is the No. 1 underlying reason why firms make so many weak hiring decisions. And, if you don’t believe that most hiring decisions involving strangers are weak, research shows that the average hiring failure rate is 46 percent. Yes, we do talk to candidates for a handful of hours, and we ask their references (who are also strangers to us) to rate them. However, the mere fact that they are strangers to us allows candidates to fool us with their puffed-up resumes and their rehearsed first impressions.
Fortunately, there is a way to avoid hiring strangers. The optimal “only hire people who you know well” strategy is known as boomerang rehiring. Rehiring former employees (i.e., boomerangs) eliminates this “stranger candidates” problem. Candidates from this source are not strangers to you because they are former employees who have a significant track record of excellent performance at your firm.
Boomerangs Can Be the #1 Source of Quality Hires
A boomerang program is a “low-hanging fruit” solution because it works quickly, costs little, and produces extraordinary results. Fortunately, data supports the value of boomerang rehiring because boomerangs “have been rated No. 1 in new hire quality” (Source: Randall Birkwood). Even without much effort, they can also produce a high volume of hires (at DaVita they reached up to 16 percent of all hires). And most former employees are more than willing to return; research by ExitCheck found that “72 percent of past employees would return to the company if the opportunity arose.” Focus at least 20 percent of your sourcing effort on candidates that are not strangers.
Four Additional Options That Allow You to Avoid Hiring Strangers
No amount of redesigning of the traditional assessment process is likely to result in a significant improvement in assessment accuracy when you are evaluating “stranger candidates.” So emphasize sourcing approaches that capture candidates who you know well. Fortunately, in addition to the boomerang approach, four other strategies can mostly eliminate the “hiring strangers” problem. They include:
- A well-designed employee referral program — the first “don’t hire strangers” alternative is to rely more heavily on your employee referral program. Unfortunately, many current referrals are barely known by the employee. However, if you only accept referrals in key jobs from employees who have demonstrated how they fully know the individual and their work, you ensure that referred candidates in key jobs are not complete strangers.
- Start new hires on a contract— the next alternative strategy is contract hiring. It requires that whenever possible, new hires in key positions are hired on a contract basis. Entelo puts them on a three-month contract, while other firms merely hire them for a weekend or holiday project where they work alongside team members.
- Focus on those who already do work for you— the next stranger avoidance option is emphasizing hiring interns, contingent workers, and vendor employees. They are no longer strangers because you got to know how they work and the quality of their work over a period of several months while they worked in your firm’s environment.
- Make finalist candidates work with the team— Toyota developed a work sample practice where candidates who were eligible for an offer were made to work for several hours on the assembly line alongside their potential coworkers. The screening process was so effective that only 10 percent of job applicants passed their work simulation tests. Similar “work alongside our employees” tests/job previews after their interview can help the company get to know candidates better. And in addition, many of the applicants will self-select out because, after even this short experience, they will decide that they don’t like the work.
The Top 10 Benefits of a Boomerang Rehire Program
As today’s employee turnover rates continue to increase, the number of corporate alumni who are available for rehiring, obviously, also increases dramatically. So, acting quickly is imperative. And if a No. 1 ranking in quality of hire isn’t enough, there are many other benefits that result from using a well-designed boomerang program. They include:
- High new-hire performance— even though regrettable boomerangs were top performers before they left, with their added experience at another firm, they return being more confident, more experienced, and they now likely know for sure that they want to spend the rest of their career at your firm. And because of their outside experience, there is also a higher probability that they will get promoted more quickly. And finally, if they were previously innovators, they will likely continue innovating when they return.
- An extremely low failure rate— boomerang candidates are never strangers. Instead, boomerang candidates are literally the only candidates where you can fully know their performance and their record as a team player within your unique organization. So, the No. 1 advantage of boomerangs is that they won’t fool you as stranger candidates can, because almost everything about them is already known by you. The failure rate norm when you’re hiring mostly strangers usually approaches 50 percent. Fortunately, the new-hire failure rate of top-performing former employees is almost always in single digits because they are a known quantity.
- High retention rates— once they decide to return, unless the business has changed dramatically they are unlikely to leave again. And they may even help to retain other employees because as “brown grassers” they tell negative stories of what it’s like to work at your firm’s competitors.
- A fast hire— if you have an immediate need, boomerangs offer an opportunity to acquire a top person quickly. This is because you already know them and they already know you. And as a result, the search, assessment, and hiring/acceptance decision can take less than half of the normal time.
- A guaranteed cultural fit — if you’re concerned about fit, you needn’t be with boomerangs because you only invite back those who have already proven that they can work well within your organization and its values.
- They quickly become productive— because they are returning to an organization that they only know well, they are likely to reach their “minimum expected productivity levels” much faster with much less onboarding and coaching than “stranger new hires.” They already know your organization, its managers, its processes, and its culture.
- Their stronger network will make them more productive— research by Google revealed that those with the strongest professional networks are more productive and more likely to be promoted. As a result of working at another firm, boomerangs will have a larger and more diverse professional network to call on when they need quick answers.
- They bring best practices with them— because they have worked at least one other firm, when they return they will bring new best practices and innovations with them.
- A targeted effort may increase diversity— if you specifically target former employees who are diverse, you can relatively easily improve your diversity representation.
- Your employer brand may be enhanced— when a significant number of your former employees return, that by itself will likely strengthen your firm’s employer brand image.
- The program is easy to implement— because the concept is so simple, any size firm can re-recruit boomerangs. In fact, boomerang rehiring often doesn’t even require a recruiter.
The 5 Most Critical Components of a Boomerang Rehire Strategy
I have written extensively in the past on how to implement boomerang programs. Fortunately, the boomerang strategy is relatively intuitive, but some critical components make a significant difference in program performance. These critical components include:
- Add an offboarding process — this boomerang process begins right before they leave. You add an offboarding feature that includes determining which employees are “regrettable turnover,” which means that they would be welcomed The next offboarding step lets the individual know that their return would be welcomed. And next, it gets their permission to keep in touch after they leave. And finally, it schedules a post-exit interview after three months to learn “the real reasons” why they left.
- Develop and maintain a corporate alumni group — you need to add a process for maintaining a relationship with your regrettable turnover. With the advent of social media, the most effective approach is a “corporate alumni group,” which is a type of talent community/pipeline. These groups are easy and inexpensive to find and maintain. Most use a Facebook or other social media group to periodically provide relevant company information and to subtly let them know when a relevant opening occurs. You should also periodically track the career progression of all your regrettable turnover by following their LinkedIn profile.
- Ask corporate alumni to make referrals — because most former employees maintain some company loyalty, it’s wise to ask them to make both employee and business opportunity referrals.
- Create an accelerated rehiring process for candidates you already know — once a decision has been made by the firm to consider rehiring a regrettable former employee, act quickly. Obviously, the firm should review their past performance records and note any added skills or capabilities. Use a “same-day” interview process, where you bring in and assess all finalist candidates on a single day. And finally,make sure that any factor that may have caused them to leave has been mitigated.
- Apply metrics to ensure continuous improvement — tag every boomerang rehire and use metrics to track their on-the-job performance, time to productivity, and retention rates. Convert each of those positive results into their dollar impact on revenue to help support a continuous business case for further boomerang hiring.
The first step is for your firm to begin to measure its hiring failure rate. Without knowing it, you can’t improve it. In my experience, the best place to start reducing your failure rate is to look for ways to minimize the number of strangers who you assess. And because boomerang rehires are never strangers, a focus on them will mean that you will automatically reduce the number of stranger candidates. Boomerangs are a win-win opportunity and “the lowest-hanging fruit” in recruiting. In addition, I have consistently recommended boomerang programs because so many firms like Deloitte, E&Y, Booz Allen, McKinsey, Bain, and DaVita have successfully used some variation of the program.