As companies rehire, some turn to workers they laid off

News & ObserverMay 24, 2010 

It was a strange homecoming.

After a yearlong absence from work, Craig LeHoullier reappeared at his old office in Research Triangle Park. The 54-year-old chemist wasn't out on medical leave or a sabbatical. He had been knocked out by the epidemic affliction of our time: layoffs.

But his former employer, pharmaceutical giant GlaxoSmithKline, needed his services again, and LeHoullier jumped at the opportunity to rejoin his business unit and pick up where he had left off.

"I've been back there for a year, and it still feels odd," LeHoullier said. "I've had numerous double-takes. I still get messages on my computer screen saying, 'What are you doing here?' "

American companies gutted by layoffs during the recession are cautiously beginning to hire again. And some are turning to a tried-and-true reservoir of talent: their former employees.

A number of them, jobless for months and eager for a paycheck, are setting aside their pride, stifling any resentment and reporting for work. Some come back to the same cubicle, same phone number, same e-mail address — and even the same boss who pink-slipped them.

Those who return typically come back as contractors, a category of job growth that's an early sign of economic recovery. Bringing experience, training and deep knowledge of the company's culture and operations, many hope to earn permanent employee status again.

"We're living in strange times right now," said UNC-Chapel Hill business professor Ben Rosen. "And the old adage that beggars can't be choosers seems to sum up the situation here."

No one tracks how many people are returning to their former employers, but the numbers could be significant. The Raleigh office of Manpower, the global staffing company, reports that about 25 percent of its clients in North Carolina are re-hiring former employees. Jeff Stocks, the CEO of Manpower's Raleigh office, says that translates to between 750 and 1,000 companies.

"We're seeing hundreds of companies doing this," Stocks said. "Most of the employees go back and report directly to the same manager. Everything is the same, except they're on our payroll."

In some ways, it's not the same at all. The benefits are almost always worse, and sometimes non-existent. Unless companies agree to pay extra to the staffing firm, the contractors don't get health care benefits, paid vacations or sick days off. When the economy firms up, some contractors may be converted to full-time employees with full benefits. Others, however, complete their projects, turn in their badges and get back in the job queue.

For the company, it's a hassle-free way to manage the work force . The employer pays the staffing company a fee for supplying the labor but avoids the administrative hassle of setting up payroll taxes, retirement accounts, unemployment insurance, health benefits and worker's compensation coverage. All that is handled by Manpower or another staffing firm.

"In most cases, it (the benefits) would be slightly less, but sometimes they pay them slightly more in lieu of benefits," Stocks said. "The benefits can be from very minimum to very comprehensive, almost comparable to what they had before."

Read more of this story at NewsObserver.com

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