Boomerang Workers Earn 25% More Money When They Return, Study Finds
www.forbes.com
Aug 21, 2022,07:43am EDT
Employees who resigned from, then returned to, [+][-]their previous employer were rehired after an average of 13 months.getty
New research found that over four million American workers have quit their jobs each month so far this year, and this record-breaking trend isn’t going to wane anytime soon.
According to McKinsey and Company’s survey of 13,000 people across the globe, including 6,294 Americans, about 40% of workers are considering quitting their current jobs in the next three-to-six months. As resignation rates show no sign of slowing down, companies are struggling to fill roles even amid a looming recession.
“Economic concerns and predictions about a recession have flipped the script on what employees are most interested in right now,” James Neave, head of data science at Adzuna, told me. “During the Great Resignation, people were changing jobs for flexibility in where and when work happens, a better work-life balance and a company mission that aligns with their own personal values.
Benefits, perks and culture were valued more highly than pay. Now, with inflation and fears of a recession, ‘cash is king’ again, and workers are changing jobs for significant wage gains. And they are well placed to do so with vacancies not likely to slow down any time soon.”
At Adzuna, advertised job vacancies in the U.S. tracked 8.1 million in July—the ninth consecutive month above eight million, according to Neave. “Job opening levels remain elevated, and the number of people in work is growing. At a sector level, healthcare & nursing and retail are seeing vacancy levels rise,” he said.
“Companies can’t find the staff to meet demand, and hiring remains red hot amid the worker shortage and rising inflation.”
New data from the Pew Research Center revealed that the majority of job switchers are seeing it pay off in higher earnings. The report says that from April 2021 to March 2022—a period in which quit rates reached post-pandemic highs—60% of employees switching jobs received an increase in their real earnings over the same month the previous year. Some job switchers find the grass is greener on the other side. But others discover they are worse off, reconsider their decisions and return to their previous employers.
Andrea Derler, Head of Research at Visier, told me. "The resignation wave caused talent shortages and internal upheaval in organizations for the past two years. In response, many organizations had to replace lost talent by hiring external talent fast and at volume to enable post-pandemic recovery and growth.”
Derler pointed out that job switchers either look for new jobs shortly after joining an organization or are rehired by their previous employer and become a boomerang employee—a worker who resigned from, then returned to, their previous employer.
Gone are the days when boomerang employees carried the stigma of disloyalty. In these times of talent shortages, rehires are considered an untapped source of talent for organizations. Some sources say re-hiring boomerang employees reduces costs because of faster on-boarding, plus former employees have knowledge of the organization and how it functions.
A new report from Visier says rehiring boomerangs is the next trend in solving the hiring crisis, citing that one-third of external hires over the past three years were boomerang employees, and 28% of new hires from the first months of 2022 were boomerang workers. Their data suggest that boomerang employees typically return to their previous employers after around one year away, re-energized and armed with new skills, and ready to renegotiate their terms. Other key findings from Visier’s database of 15 million anonymized employee records include:
www.forbes.com
Aug 21, 2022,07:43am EDT
Employees who resigned from, then returned to, [+][-]their previous employer were rehired after an average of 13 months.getty
New research found that over four million American workers have quit their jobs each month so far this year, and this record-breaking trend isn’t going to wane anytime soon.
According to McKinsey and Company’s survey of 13,000 people across the globe, including 6,294 Americans, about 40% of workers are considering quitting their current jobs in the next three-to-six months. As resignation rates show no sign of slowing down, companies are struggling to fill roles even amid a looming recession.
“Economic concerns and predictions about a recession have flipped the script on what employees are most interested in right now,” James Neave, head of data science at Adzuna, told me. “During the Great Resignation, people were changing jobs for flexibility in where and when work happens, a better work-life balance and a company mission that aligns with their own personal values.
Benefits, perks and culture were valued more highly than pay. Now, with inflation and fears of a recession, ‘cash is king’ again, and workers are changing jobs for significant wage gains. And they are well placed to do so with vacancies not likely to slow down any time soon.”
At Adzuna, advertised job vacancies in the U.S. tracked 8.1 million in July—the ninth consecutive month above eight million, according to Neave. “Job opening levels remain elevated, and the number of people in work is growing. At a sector level, healthcare & nursing and retail are seeing vacancy levels rise,” he said.
“Companies can’t find the staff to meet demand, and hiring remains red hot amid the worker shortage and rising inflation.”
New data from the Pew Research Center revealed that the majority of job switchers are seeing it pay off in higher earnings. The report says that from April 2021 to March 2022—a period in which quit rates reached post-pandemic highs—60% of employees switching jobs received an increase in their real earnings over the same month the previous year. Some job switchers find the grass is greener on the other side. But others discover they are worse off, reconsider their decisions and return to their previous employers.
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Andrea Derler, Head of Research at Visier, told me. "The resignation wave caused talent shortages and internal upheaval in organizations for the past two years. In response, many organizations had to replace lost talent by hiring external talent fast and at volume to enable post-pandemic recovery and growth.”
Derler pointed out that job switchers either look for new jobs shortly after joining an organization or are rehired by their previous employer and become a boomerang employee—a worker who resigned from, then returned to, their previous employer.
Gone are the days when boomerang employees carried the stigma of disloyalty. In these times of talent shortages, rehires are considered an untapped source of talent for organizations. Some sources say re-hiring boomerang employees reduces costs because of faster on-boarding, plus former employees have knowledge of the organization and how it functions.
A new report from Visier says rehiring boomerangs is the next trend in solving the hiring crisis, citing that one-third of external hires over the past three years were boomerang employees, and 28% of new hires from the first months of 2022 were boomerang workers. Their data suggest that boomerang employees typically return to their previous employers after around one year away, re-energized and armed with new skills, and ready to renegotiate their terms. Other key findings from Visier’s database of 15 million anonymized employee records include:
- Employees who resigned from, then returned to, their previous employer were rehired after an average of 13 months.
- More than a quarter of boomerang employees were high performers before they left.
- Boomerang workers earn on average 25% more when they return.
- Managers are more likely to be rehired than their non-manager colleagues.
- Resignation rates: “Voluntary attrition has received a lot of attention in recent years, and continues to be a metric to watch. The ability to drill down into the details of resignation rates to learn about where, who and why is leaving—and perhaps returning—has become table stakes for data-minded companies. Combined with resignation rates, a thorough understanding of the drivers of resignations—compa-ratios, promotion rates or engagement data— is helpful to monitor both turnover and rehire rates when it comes to understanding what really drives people out and perhaps what brings them back.”
- Employee listening: “During the pandemic, organizations focused on continuous listening to take the pulse of employee experience including the level of perceived engagement, inclusion and opportunities. Hybrid and remote work models made it challenging for managers to stay in touch with team members. Engagement, experience, pulse and ‘listening’ data integrated with other talent and business metrics are a key metric that are table stakes for organizations focusing on employee retention.”
- Compensation: “Recent talent shortages and hiring trends caused compensation budgets in some organizations to go out the window as job switchers earned higher median wage growth than those who stayed. Visier’s data shows that boomerang employees benefited from a pay bump by 20%-25% on average in recent years—a curious fact that may be telling about the company’s retention and compensation strategies. Of course, a blanket pay raise for all is neither reasonable and might not even be necessary. Knowing which area in the business is more sensitive to pay can be a better targeted compensation strategy."
