Stocking Up on… Laid-Off Employees

The hiring manager was excited to be interviewing a pair of candidates, both of them recently laid off by a blue-chip tech company, and both of them possessing the tech talent she’d long sought. But she hesitated. Did the candidates really want to work in her industry, in small departments, far from the dynamism of the tech world? And could they really jump into new roles so quickly?

Just two years ago, the business world was abuzz over the 5 million workers who had quit. Oh, how times have changed: the pool of laid-off candidates is now at least 5 million deep, with 1.8 million US layoffs in March alone. All of this creates a large pool of candidates that’s unprecedented in the careers of managers, particularly millennials. The moment offers both opportunity—and risk. “These people aren’t in the job market of their own volition,” says HR expert Ron Porter, senior client partner at Korn Ferry. This, he says, means that they might very well accept jobs in which they’re uninterested or undervalued.

The market is flush with high-level talent. When layoffs first began last year, organizations let go new hires and underperformers, says David Ellis, vice president for Global TA Transformation at Korn Ferry. But these second and third waves of layoffs are “cutting deeper into workforces, and companies have been forced to reduce good performers,” he says. Many of the laid-off workers have expertise in tech: the tech industry let go of 180,000 workers in March alone.

This creates an opportunity for employers looking for deals on talent costs. “Employers can dictate terms a little more,” says Deepali Vyas, global head of the FinTech, Payments, and Crypto practice at Korn Ferry. “They can offer packages that gainfully employed talent might not take.” Similarly, unemployed candidates can’t leverage their old packages when negotiating the details—stock options, equity and other long-term incentives—of their compensation.

But unlike employed talent, laid-off candidates have already advertised themselves on the job market, and have likely begun interviewing. They’ve begun a process which could eventually yield competitive, if not superior, offers. And it’s not uncommon for companies doing layoffs to later rehire top performers as soon they’re able, says Porter. “The company may even say that as they’re leaving.”

There are also psychological considerations. Few employees are laid off so many times in their careers that they become acclimated to it, says business psychologist James Bywater, senior client partner at Korn Ferry. As a result, newly unemployed people can find themselves oscillating between low moments of financial worry and high moments of perceived opportunity (“I can refocus my career”). “It really depends where they are in the cycle,” says Bywater.

It's important to be aware of these emotional dynamics, says Kendra Marion, vice president of global assessment services at Korn Ferry. “It’s the equivalent of dating someone who has just broken up from a long-term romantic relationship. What is their ability to commit?” She stresses that these are not necessarily reasons to not hire someone, but simply considerations to be aware of, and evaluated, alongside the work situation. If the employer’s need is immediate and urgent, and the candidate is plug-and-play, hiring might make sense

The key, says Porter, is to be diligent and thorough in assessing a candidate’s interest in a role. He suggests evaluating not just cultural fit, but also motivational drivers and how much the candidate will enjoy the work. To help the candidate begin developing a high number of social and emotional connections, he advises including as many future coworkers as possible in the hiring process. He also recommends assigning a new-hire mentor or buddy. “You want to stay very close to them,” he says.

For more information, read about Human Resources capabilities at Korn Ferry.

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