Special Report Your Job

You're fired! You're hired!

As economic conditions improve, more companies are recalling previously laid off workers, with mixed success.

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By Jessica Dickler, CNNMoney.com staff writer

Koren Rife was ecstatic to get her old job back just a few months after being laid off.
Jerry Abiog's second chance did not go as planned.
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NEW YORK (CNNMoney.com) -- The recession has left more than 6 million people out of a job. But for some of them, the job they lost may end up being the job they find again.

About 38% of employers have indicated they anticipate some type of recall of cut workers, according to a recent report from the Labor Department.

Companies, including General Motors, Ford Motor, Dell, AK Steel and truck maker Oshkosh, have already reached out to previously laid-off employees to meet rising demand.

It's not uncommon for companies to recall workers as business conditions improve, and that will likely become more widespread as this recession wanes, experts say.

In a separate survey, 18% of laid-off workers who landed new positions were rehired by the employer that let them go, up from 13% in 2005, according to Right Management's outplacement services, a division of Manpower.

More than 17,000 outplacement candidates were surveyed by Right Management between June 2008 and June 2009.

Koren Rife, 25, is a good example. She was laid off last year from a small public relations and advertising firm in Philadelphia. Her client, a hot tub manufacturer, could no longer afford the firm's services, and that left Rife out in the cold.

"During the time that I was laid off, I looked for other positions and collected unemployment," Rife said. By June, she found a public relations assistant position at a nonprofit alcohol and drugs rehabilitation facility, but still kept in contact with her former colleagues.

In the fall, her old boss called and told her a coworker was leaving, and offered Rife the position, which she accepted. She now makes slightly more money than she did before, although her title remains the same.

"I was very excited to come back," she said. "One reason I decided to return was because I know that this agency is a great place to learn a lot about the industry. I knew that I would have great teachers and receive a lot of hands-on experience," Rife said.

Welcome back

There are many upsides to rehiring former employees, according to management professor Peter Cappelli of the University of Pennsylvania's Wharton School of Business. The positives include savings on recruiting and training costs, maintaining associations between customers and employees, and the fact that the rehired employee doesn't need an introduction to his or her colleagues.

But redundant firing and hiring can also be costly for the company, particularly in the form of severance payments, and can even be disruptive to workforce performance.

"It may be hard [for employees] to fit right back in," Cappelli said. "Sometimes the work has changed" or, depending on the manner in which an employee was let go, coming back could be "uncomfortable for everybody," he said.

That's why it is particularly important for companies to discharge employees "in a positive and humane way," said Paul Bernard, a veteran executive coach and career management adviser who runs his own firm. Companies should offer severance and outplacement services to ease the transition, he said.

Employees should also approach any rehire offer with caution, Bernard said. If the company has been experiencing financial strain, ask yourself "does the organization have legs?"

Before employees forgo another opportunity, they should consider the possibility of being discharged again if the company experiences more hardship down the road.

The right move?

Not all rehires have a happy ending. Jerry Abiog, 37, worked for an Atlanta-based consulting firm until he was laid off in January -- only to get called back six weeks later.

"Due to the economic situation, I wasn't surprised that I was let go," he said. He was surprised, however, when shortly after he left, the firm's new management team offered him his old position again.

"I was hired back at the same position and salary; however, things were not the same," Abiog said.

"I went through the motions but basically I was selling the same old services that weren't viable in today's economy."

By early May, Abiog was laid off once again.

"I was more mad than the first time," he said.

Although he was careful to leave on a good note, Abiog is skeptical he would go back a third time. He has been looking for other positions since the spring. To top of page

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