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Employers Begin Rehiring the Laid Off

With the economy showing modest signs of improvement, a number of companies that shed jobs during the recession are beginning to rehire the very same employees.

Twenty-six percent of employers who had layoffs in the past year reported that their company was planning to bring some of them back, according to a new CareerBuilder/USA Today survey of 2,924 hiring managers.

“It’s a good sign, but it doesn’t mean the labor market has turned around,” says Dan Seiver, professor in the finance depart of San Diego State University. “We are getting to the end of the recession.”

Of those rehiring, 23 percent said they have already started extending job offers to former employees in the third quarter of this year. Nineteen percent will begin to do so in the fourth quarter.

The majority, however, will wait until 2010 (21 percent in the first quarter, 15 percent in the second and 10 percent in the second half of 2010).

While the news is encouraging, experts say it will take a lot more to see a major improvement in the current 9.8 percent unemployment rate: “You still have a massive overhang of workers looking for work,” Seiver says.

Seeing an improvement, he adds, would require firms making new hires, too, “but we’re not seeing that yet.”

Instead, a number of positions are being refilled as business picks up.

Truck manufacturer Oshkosh has called back about 600 employees it laid off after being awarded a $2 billion contract in June by the U.S. military for their M-ATV vehicle, according to spokesperson Ann Stawski. Oshkosh reduced the workforce of its subsidiary JLG, which makes lift equipment, by 50 percent globally earlier this year.

Most of rehiring was based at the company's McConnellsburg, Pa. plant where the military vehicle is being produced.

Meanwhile, industrial manufacturer Eaton Corporationrehired a total of 54 laid-off workers in September and October at a truck transmission factory in Schenandoah, Iowa.

And automaker General Motors recently announced that it would recall workers thanks to increased demand. The automaker filed for Chapter 11 this summer and cut thousands of jobs.

Though the trend is most pronounced in the manufacturing sector, Bernard Layton, managing director of global executive search firm Stanton Chase, says he is seeing rehiring in other areas, such as the food industry and engineering firms.

Companies are turning first to their laid off employees, says Seiver, because they’re “much cheaper” and less riskier than recruiting and training new hires.

Employment experts agree though that while some laid off employees may harbor hurt feelings about being let go, with unemployment at a 26-year high, many are just happy to get to work again.

“When times get tough hiring managers want to go back to people that they know and that will fit back into the culture,” adds Layton.

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