Boomerang placements: A lucrative homecoming or a calculative faux pas?

Contributed by: Khaitan & Co




The thought which may prompt at the outset regarding ‘boomerang placements’ is if the grass is actually always greener on the other side.


‘Boomerang placement’ is a term that has gained momentum globally and is picking up pace within several organizations across several sectors from human resource policy viewpoint. Literally, the term ‘Boomerang’ refers to a curved piece of wood that comes back to the person who throws it. Over the years, popular cultural references have transformed it to be commonly associated with other facets of life.


From an employment standpoint, ‘boomerang placement’ refers to hiring of an employee who left an organisation but thereafter, seeks to re-join his / her erstwhile employer after an interval of time. The exit and eventual return of such ‘boomerang employees’ could be attributed to several reasons including inter alia exploring new prospects in other areas of their expertise, trying out a different line of business, employer’s inability to continue with their employment on account of financial constraints, seeking better remunerative or promotional opportunities, potential development and advancement of one’s skills, gaining academic accolades, and family, child care, medical or other personal reasons.


Albeit until recently, returning to a former employer and being gainfully employed at an organization which one had quit was viewed as a taboo and carried connotations of disloyalty, now, employers are more amenable to hiring ex-employees. One of the foremost reasons for this radical shift in hiring policy of several organisations is that boomerang placements are cost effective as they entail lower cost of onboarding of former employees (due to availability of the required information of the individual) and their training (due to familiarity of the individual with the business requirements). Further, employers face lower risk in terms of alignment of the employee with performance parameters and expectations while re-hiring the employee as they are already privy to the concerned boomerang employees’ personal and professional records, are assured that the employees will adapt to the organisation’s work environment, have confidence in terms of their output, and can gauge better growth for both the firm and the individual.


From the employees’ perspective, they view boomerang placements as a second opportunity and a familiar assignment, resulting in higher organisational commitment. Employees are also able to project their newly gained industry knowledge, novel ideas, and expertise, and may return with prospective clients, which could potentially make a financial and monetary difference to the company’s business. Other factors that have contributed to the evolution of the boomerang culture include growth of social media that facilitates connection between the employers and the employees even post-cessation of their formal relationship, and the change in working patterns in the millennial generation, where a frequent change of jobs is not construed negatively on either parties’ side.


While boomerang hiring may reflect positively on the organizational culture, frequent exits and re-entry of employees may reflect a weak management that is willing to accept boomerang behaviour on an assured basis. Additionally, factors such as Indian employment laws requiring termination of an employee to be on the basis of a reasonable cause may impact the boomerang placement of such employees.


The impact of the COVID-19 pandemic

Even though the global pandemic induced a havoc-like situation across the world and caused several organizations to lay off or terminate the services of members of their workforce, it also saw many organisations re-hire employees who, for reasons of financial constraints, business or role redundancy, etc., had to part ways with their employer. The COVID-19 outbreak induced a never-seen-before scenario for organisations, providing impetus to boomerang placements. The idea of re-hiring former employees appeared to be beneficial and became the need of the hour because employers found it challenging to, for instance, train new employees in a virtual set up. As employers saw a decline in their available resources, they eventually found it easier to refer to their existing records of employees for filling up current or re-opened vacancies. This is not only proving to be more cost efficient but, is also saving time as regards search for the right candidate, training, apart from ensuring better retention of employees.


The legal framework vis-à-vis boomerang placements in India

The Industrial Disputes Act, 1947 (ID Act) provides for re-employment of the protected category of personnel, i.e., workmen, who were retrenched by their employer (i.e., whose services were terminated for any reason other than misconduct and who did not tender their resignation). By way of background, the term ‘workman’ under the ID Act typically includes all employees who are not engaged in an administrative or managerial capacity, and if employed in a supervisory category, earn a monthly wage of up to INR 10,000. If an employer seeks to hire workmen for a particular job, under the ID Act, an obligation is cast on the employer to consider and give preference to the workmen who were previously retrenched and who offer themselves for re-employment, over any other workmen that the employer proposes to hire. Other than the ID Act, as such, the extant labour laws in India do not contain any provisions which would govern boomerang placements of the Indian workforce.


However, with the ever-changing dynamics in the Indian employment landscape and the advent of the Code on Social Security, 2020 (Code), there could be a potential rise in boomerang employment, as such evolving landscape and the Code seek to cover the unorganised sectors (including the gig and platform workers) within their ambit. With such assurances and social networks, gig engagement may become an attractive proposition for the workforce, who may seek to experiment with or transition between their periods of exit and re-entry in organisations, thus, causing a higher inflow of boomerangs. Having said that, gig engagement is just one area where boomerang placements may witness a peak.


India Inc. paving way for boomerang placements?

Although boomerang employment has not been the norm within the hiring space, the growth that the concept has seen lately is likely to become a part of hiring practices across organisations in India. To ensure that organisations are better equipped to deal with this trend, it would be prudent for employers to channel and manage the entry and exit policies of employees judiciously. In the same vein, examining the reasons for the exit and determining the factors which could make the former employees suitable as potential boomerangs, the employers could consider formulating re-hire policies and revamping their existing internal policies. For instance, some leading organisations have internal systems in place to maintain their records and flag out employees who have been involved in malpractices or were underperformers to rule out their potential re-employment. Additionally, some organisations have come up with homecoming initiatives and programmes which involve coordination and collaboration with their ex-employees to apprise them of upcoming opportunities at the organisation.


One of the aspects which may also require attention is organisations being vigilant in framing robust confidentiality and non-disclosure clauses in employment contracts to prevent outflow of confidential and proprietary information through boomerang placements. To that end, stricter information technology and formal social media policies as well as sensitising employees regarding their obligations could further safeguard organisations from potential breaches by boomerangs in this regard.


Conclusion

Given the sensitivity involved around employee onboarding practices, it is likely that boomerang placements would function on a similar footing as the general hiring practices. However, this concept may involve additional considerations as it entails taking a risk of employment with the same employee, for a second time. Findings from numerous studies provide divergent views on the effectiveness of boomerangs indicating that organisations seeking to experiment with their hiring process will have to be cautious. The approach adopted eventually would have to be subjective and contingent on a case-to-case basis for its effective implementation.


Contributed by Khaitan & Co


The above article is authored by Anshul Prakash (Partner), Archika Dudhwewala (Senior Associate) and Divya Kumar (Associate) with the assistance of Deeksha Malik (Associate).