Scenario

When one of Santera Systems top engineers left the telecom upstart for another hot tech company, CEO David Heard tried to convince the employee he was making the wrong move. That engineer should have listened. Heards former star showed up at Santera only four months later looking for his old job back. Turned out his new employer wasnt so hot after all. He came back, hat in hand, and said I made a mistake, says Heard.

You could call them prodigal employeesworkers who leave in search of greener pastures, only to return to the fold when things dont work out as planned. The tech meltdown and the unstable economy have forced a growing group of newly displaced workers to knock on their former employers doors.

Good people, however, are hard to find, and prodigal employees should be welcomed backif there is a position to fill. But its not such a clear-cut decision for small businesses. Since employee relationships tend to be tighter-knit at smaller firms, a companys productivity can easily unravel when the boss shows signs of favoritism. In Santeras case, CEO Heard felt rehiring the engineer would harm his efforts to build a culture long on longevity and short on greed. Part of me thought, Bring him backhes a smart guy, Heard says, but you dont want to reward his behavior. It doesnt send the right message to the employees who stuck with you.

Small-company CEOs and managers must be extra sensitive to their employees morale if they do decide to bring back a wayward worker. Recruiting experts suggest lining up allies to be advocates for the returning employee beforeand afterhis or her first day back. That helps the rest of the team understand why the ex is back home and helps the old newcomer feel more comfortable. They also recommend giving the whole team a project to pursue together.

In many cases, bringing back a former employee can be an unexpected boon for a small company. Sterling Communications executive Chris Corcoran was happy to rehire a qualified account supervisor who had left months earlier for a dot-com that went bust. He was pleasantly surprised to discover she came back with a better understanding of business as a result of wearing many hats at the tech company. She had matured and become a much better counselor to our clients.

What would be the advantages and disadvantages of hiring a former employee in larger organizations? In small firms?

How valid were David Heards concerns about the effect of returning employees on the companys culture?

At which level of the organization should the rehire decision be madesupervisory, middle management, or upper management?