Boomerang employees: Why rehires are invaluable to your organisation and how to retain them

The path of a boomerang employee

With inflation on the rise and little guidance or growth in his current position, a highly-tenured supermarket employee announces his resignation in search of higher pay, more flexible hours, and better opportunity for growth. After two years away, he begins his search for growth again only to find himself drawn back to the company he left. He returns to the supermarket for familiarity, a friendly work environment, and hopefully, a pay increase.

A terminated and rehired employee is often referred to as a boomerang employee. And it’s not an uncommon story. With organisations demanding more and more from their talent, job openings breached 10 million in 2022. Boomerang employees are consistently producing lower turnover rates than industry averages, suggesting they should be treated as valuable for choosing to return.

Where employees are rehired, according to the data

Ceridian conducted a study using 850,000 employee records provided by our clients through an optional program across the hospitality, grocery, and civic and social industries and found that 24% of hires are boomerang employees.¹ This number peaked at 38% in 2020, with an increase in the quarters following the beginning of the COVID pandemic. This is to be expected, as some industries were shut down while others, such as supermarkets, were overwhelmed with demand.

Of the industries researched, civic and social organisations had the highest rehire rate at 33% of all hires. Hotels and motels had a 29% rehire rate, while supermarkets and grocery stores lagged with 19% rehire rates.

Among these industries, several job titles showed higher return rates. In our research, 41% of interns were shown to be rehired full-time by the company with which they interned. The other job titles with a high return rate were clerks, cashiers, and baristas, with an average rehire rate of 21%. Leaders, managers, and directors had a rehire rate of 10%. The average candidate for rehire had an initial employment term of one year or less. This data provides more information about where the rehire volume is located and where hiring managers should focus their attention.

Boomerangs are beating the averages

When boomerang employees return, it appears that they are likely to stay. According to our de-identified client data, supermarkets and grocery stores saw an annualised turnover rate for rehires of only 5.7% in 2021, while the U.S. Bureau of Labour Statistics (BLS) reported an annualised turnover rate of 65% for retail employees. The average turnover of these three industries for all employees in our data set from 2018 to 2022 was 35%, which is much lower than the turnover rate of 57% according to the BLS. This reveals that boomerang employees seem to produce turnover rates consistently lower than industry averages for all employees.

With these HR-friendly numbers, boomerangs have earned a chance in the spotlight. Organisations attempting to reduce attrition rates need look no further than the rehire population. With a clear affinity for the company they’ve returned to, this data shows that a boomerang employee on average tends to stick around longer.

Three ways to increase retention rate of rehires

1. Prioritise employee recognition

Recognition can go a long way, especially for a returning employee. According to a survey by HR Technologist, 63% of employees who are recognised are very unlikely to look for a new job. This recognition can be important to new hires and boomerangs alike, and attentiveness to growth progress in a rehire is also something to consider.

2. Give consistent employee feedback

According to our data, at the five-year mark, those who have previously interned within a company are 9% more likely to return. Our statistics show that intern rehire rates (41%) are double that of the next category of workers (clerks, cashiers, and baristas at 21%). Internship programs incentivise and reward progress with multiple check-ins, knowing that the intention of the program is to learn. A OnePoll survey conducted in 2021 found that employees rated “feedback on their role” as their primary reason for sticking around. The same method should be applied for new hires and rehires alike. Get acquainted, check in often, and focus on a career development plan.

3. Provide rehires with pay transparency

According to a recent article by the Wall Street Journal, job switchers are receiving greater pay increases than those who stay at their jobs. Reports like this contribute to the commonly-held belief that new employees are paid better on average, making current employees flight risks and possibly contributing to a higher employee turnover rate.

However, our research found just the opposite for boomerang employees. This begs the question: just how much are rehires being paid?

Our data revealed that employees who left within their first year and maintained an absence of three years returned with only a 4% pay increase from their original salary, which would leave the employee with less to spend after accounting for yearly inflation rates. Contrary to the Wall Street Journal findings, our data shows boomerang employees returning with much less than they would have received with a yearly merit raise instead of job switching. While this increase is less than it is for typical job switchers, companies should focus on pay transparency and clearly laying out career paths and associated salaries to incentivise employees.

Sharing frequent pay equity reports with employees helps them understand the effort their organisation is making to ensure fairness. This transparency incentivises new employees to focus on extending their growth with expected tangible salary improvements. According to a study by the Society for Human Resource Management, replacing an employee can on average cost six to nine months of the departing employee’s salary, much higher than equitable salary improvements.

The numbers don’t lie. Employees are looking for a familiar workplace, and when they return, they tend to stay.

[1] Methodology: At Ceridian, we’re assessing de-identified data from clients that have opted into a program where we can use their data for research purposes. This data has been further segmented using the North American Industry Classification System (NAICS) code to group clients into industries to look at industry-specific trends. The data used in this article represents over 850,000 employees across three industries (retail, hospitality, and supermarkets) in 2018 and 2022.