Case Study: Should You Rehire Someone Who Left for a Competitor?

Ram Kapur and his brother Shayam were covered head to toe in brightly colored paints. They’d been out celebrating—it was Holi, the festival of colors in India—and now they were returning to the home they shared with their parents, in Gurgaon, for their family’s traditional meal together. Ram’s phone rang just as they walked through the door, and he held up the screen to show Shayam the caller name: Hari Shukla. “Why is he calling you on Holi?” his brother asked, surprised. Ram was the founder and CEO of Green Impact Consulting, a sustainable design firm, and Hari had been one of the young company’s most valued employees—until two years ago, when he’d decamped to a rival firm. SAM CHIVERS “A job, I think,” Ram replied. “We’ve been back in touch.” “No way! He left you! You swore you’d never speak to him again!” That was true. Hari had been Ram’s right-hand man at Green Impact. Ram had led the technical analysis and design teams for their residential and commercial real estate projects, and Hari had overseen the small team of civil engineers in the field. When Ram first started the company six years earlier, business was slow; it was difficult to convince real estate developers in Gurgaon of the importance of sustainable building practices. But in the second year, he brought on Hari, who had eight years of experience, and the business grew. Case Study Teaching Notes Jyotsna Bhatnagar and Nakul Gupta teach the case on which this one is based in their talent management and technology classes. What drew you to this story? The protagonist was in one of our executive courses, and he shared his dilemma with the class. It was the primary reason he was taking a talent management course. How do students respond to the case? Working executives tend to advocate for rehiring the employee. Younger students also think that’s a smart idea, pointing to the boomerang talent policies at big firms as evidence. But some people feel that trust has been broken and can’t be repaired. What do you hope they’ll take away? We want students to understand the difference between boomerang employees, whom you’d welcome back, and “frenemy talent”—people you’d rehire despite reservations in order to keep them from going to a competitor. We also hope they learn to appreciate the need for a strong talent pipeline to fill the gaps when people in critical roles leave. Friends and allies, they’d been the perfect team. Ram had believed they were capable of growing Green Impact into one of the top three sustainable building consultancies in India. But then Hari walked into his office and said he was leaving for “personal reasons,” only to turn up at a larger competitor: The Sustainable Impact Group. Of course, Ram knew this was a risk of being an entrepreneur in India. The talent market was so tight that strong employees were often poached from small companies by bigger-name, more successful ones. But he still couldn’t help feeling betrayed—even devastated. It was a tough year. Hari’s unexpected departure left Ram in charge of both the office and field teams. He was stretched too thin to tackle the growth plans he’d been dreaming of. He focused on serving existing clients and retaining his employees—he’d even had to raise salaries across the board to make sure others didn’t follow in Hari’s footsteps—but he had no time for marketing and barely kept the business going. He’d put on a brave face for his employees, the customers, and his parents. Only his brother knew how hard he’d struggled and how hurt he’d been. “I can’t believe you would speak to him.” Shayam shook his head incredulously. “I know. I know,” Ram said. “He really let me—and the company—down. But he was a great employee—and a friend. I have to at least consider it.” “He stabbed you in the back,” Shayam said. “He abandoned you for more money and travel, without thinking twice about Green Impact’s mission or your friendship. You can’t trust him. Besides, your business is doing great now. You don’t need him anymore.” Indeed, after an extremely difficult year, Ram had been able to get Green Impact back on track. Two of the civil engineers that Hari had been managing—Preeti Das and Tuli Khanna—had stepped up. They were much less experienced than Hari had been, but after intensive training, they’d been able to fill the void that he’d left. Recently, though, Ram had started to consider expansion, perhaps into the Middle East, where sustainable building wasn’t such a hard sell. But he wasn’t sure that his young team could keep the business thriving if he took his focus off day-to-day operations. With Hari back, maybe he could revive his dreams for the company. “Hari may be the only one who can help me take the business to the next level,” he told Shayam. His brother scoffed. “This city is full of talented, competent people. There is no way that that deserter is your only option.” What’s Best for the Business Three days later, Ram was back in the office. He’d returned Hari’s call, and the two finally discussed what was on Hari’s mind: He missed the tight-knit culture at Green Impact, and he was exhausted from the travel and long hours at his new job. He had been wooed by the 75% salary increase and the opportunity to travel, he told Ram, but he wanted to feel like he was helping to build something again, not just keep someone else’s business running. Ram had started to get excited about the possibility of working with his old employee. But now back at the office, surrounded by the team that had so capably risen to the challenge, he was less sure. He wondered about the disruption it would cause. When Ram opened his e-mail, he saw a message from Preeti saying that she and Tuli were hoping to talk to him before they headed out to a project site for the day. “Sure,” he replied, and moments later they were in his office. He could tell immediately by the uncomfortable looks on their faces that something was up. Tuli, not one to mince words, blurted out: “We know about Hari.” Ram tried not to react, but he could feel his eye twitching. It was amazing how quickly gossip traveled in their business. It probably didn’t help that Shayam had been dating one of Ram’s employees. “I don’t want to know how you know that. And I don’t have any information to share at the moment,” Ram said. Tuli didn’t pick up on his desire to end the conversation—or didn’t care: “We just wanted to let you know that the staff is keen on the idea.” “Which idea?” he asked. “The idea that Hari might come back to work here,” she said, and then quickly added: “It would make the Middle East a possibility.” Ram had talked with both women about his hopes to expand to a friendlier market like Dubai, and they’d been excited about the strategy and the opportunity. But he hadn’t expected a welcome attitude toward Hari’s potential return, especially not from Preeti, who was now in the role Hari had vacated. “You’re saying the staff has talked about this?” Ram asked. “Most of us,” Tuli said. “And you’re all in favor of rehiring Hari? Even though that would mean that we’d need to restructure your team, and you’d likely have to give up some of your projects?” “We know that things might be uncomfortable in the short term, but we think it would be best for the business. He was excellent at his job, and we don’t want him working for another direct competitor, like Greenscapes or BRG. Yes, he left us, but think of the market intelligence he’d bring us if he returns.” Ram nodded. The team was thinking strategically, which he appreciated. But then he realized something: Tuli had been doing all the talking. “Are you on board with this, Preeti?” he asked. “I want what’s best for the business.” She paused, glanced nervously at Tuli, and then continued. “Of course, I have some reservations. Yes, he left a big gap initially. But we’ve filled it, and we’ve been fine without him. In the past few months, we’ve been more than fine.” “Don’t you think he could help us do even better?” Ram asked. “I worry how coworkers will treat him. They mostly say they’re fine with Hari’s being part of the team again, but when he left, a lot of us said harsh things about him. Some people were—and may still be—very mad.” Preeti raised a good point. Could the team—could he—really welcome Hari back with no resentment? What message would Ram send to employees if he took Hari back? And could he really put his faith in someone who had left him in the lurch? Would he always be wondering when Hari was going to jump ship for a better opportunity? That’s What We Do Here “Of course you’ll take him back. That’s what we do here in India: We forgive. We give people second chances! I would take you back in a heartbeat.” Ram was having lunch with his mentor and friend, Mohan Chaudhary, who had employed Ram right out of university. Mohan had taken him under his wing, eventually encouraging him to leave and start his own company. Ram always sought his advice when he had work dilemmas. “This is what the big companies do, too,” Mohan continued. “Boomerang talent. Microsoft, McKinsey, they welcome people back after they’ve gone off and worked elsewhere, knowing that they bring with them new knowledge, expertise, even intelligence about competitors.” “So I should just give him his job again, no questions asked?” Ram asked. “Well, not so fast. Why did he leave in the first place? He initially said personal reasons, right?” “Yes, but he’s being more honest with me now. He admitted they gave him a significant raise and promised the opportunity to travel.” “Right, and he probably experienced a significant increase in his workload, too. You know as well as I do that the same thing is happening all over India now. These big firms have deep pockets, but they also expect people to work 70 hours a week.” “He mentioned that,” Ram said. “But he said he really misses the camaraderie and the start-up spirit.” “I’m guessing it’s more about the flexibility and work-life balance he’ll have back with you. Or he’s sick of being a cog in the consulting wheel, and he wants to lead a team again, calling the shots. Or maybe he just couldn’t cut it at the other firm.” Ram had thought of that. Maybe Hari had been fired. Did Green Impact want another company’s cast offs? Was he really as good as Ram remembered? “I do think having him back would be good for Green Impact, and for you,” Mohan said. “But I also understand your worry. It sounds like you don’t entirely trust him anymore. If you bring him back, you have to completely let go of your hurt and anger. Can you do that?” “I thought I could. Now I’m not so sure.” Question: Should Ram take Hari back? The Experts Respond Samdarsh Nayyar is the founder and managing partner of Green Horizon Consulting, in Gurgaon, India. Ram should not take Hari back. The trust between them has been broken, and it will take more than a few phone calls to restore it. Hari’s motivation for returning is unclear at best and suspect at worst. He says he wants a better quality of life, but that doesn’t ring true. I know very few young Indians who would give up a high-paying, fast-paced job for a relaxed, lower-paying one; most are looking to work hard and amass money early in their careers before they have families or other responsibilities. So it’s quite likely that, as Ram’s mentor suggested, Hari didn’t quit his job; he was asked to leave. Even if Hari is being honest about his reasons for wanting to return, how can Ram know those sentiments will last? The talent market in India is so fluid that a fickle player like Hari can easily switch companies every six months. Ram can’t run the risk that Hari is going to use his company as a career stepping-stone again. That would do even more damage to the company and employee morale. I agree that Hari could bring in competitive intelligence, but that may not be 100% positive. His tales of what it’s like to work at a larger, more prestigious firm could cause Ram’s employees to rethink their options. And if Hari plans to leave again, he may try to take people with him. Hari’s motivation is unclear at best and suspect at worst. Perhaps most important, Ram doesn’t need Hari. Sure, he may have more experience than Preeti and Tuli, but he will also cost more, and there’s no evidence he can outperform them. In fact, it sounds as if the two women are excelling in their current roles. If Ram is serious about growing, he’s better off relying on team members who have proved they are trustworthy and can step up to a challenge. Ram should give them even more responsibility (compensating them accordingly), and if they prove themselves capable over the next three to six months, he should ramp up his expansion plans. This case is loosely based on my experience with an employee who quit my firm and then asked to return three years later. I said no. I’m not against the idea of boomerang talent. But in my case, I was skeptical of my former employee’s motivations, and I wasn’t ready to take a chance, in large part because the company was doing well without him. Since I made that decision three years ago, there has been some expected turnover at the lower and middle levels of my team, but for the most part it has been stable and tight-knit. Working together, we’ve increased our business volume by 300%. So I have no regrets about not taking the employee back, and neither should Ram. He should wish Hari the best and continue building his business with the trustworthy, reliable colleagues he has now. Diane Hoskins is the co-CEO of Gensler, a global design firm. Ram should rehire Hari. Given Green Impact’s stage of growth, Ram is going to need additional strategic leadership, and it sounds like his former employee will be able to provide the right skills at this critical moment. Yes, Ram could recruit someone new. But Hari will have a shorter ramp-up time. He’s familiar with the company, the people, and the culture, and his capabilities are well understood. Candidate vetting can only take you so far; until you work side by side with someone, you won’t know if he or she can truly deliver. At Gensler, we believe that once you’re part of our family, you’re always part of it. You shouldn’t have to “forgive” people upon their return, as Ram’s mentor suggests. This is about seeing each person’s growth as a benefit to the team, even if some of that growth occurs outside your organization. We want our people to expand their skills and leadership capacity. We do our best to provide opportunities here, but we understand that employees will occasionally go elsewhere to get those needs met. So when people leave for any reason—even to go to a competitor—we wish them well and let them know that our door will be open when they’re ready to come back. Gensler now has more than 5,000 employees, but even in the early years, when the company looked more like Green Impact, we were open to returning employees. In the 1960s, our founder, Art Gensler, rehired the late Walter Hunt, who had been lured away by a competitor. Hunt went on to be an important leader in transforming the firm from a small interiors practice into one of the largest architectural firms in the world. Walter also created our Boomerang program, which now counts 500 returning Gensler employees among its members. This is about seeing each person’s growth as a benefit to the team. Each December we have a ceremony at which we celebrate our staff, announce promotions, and give returning employees an engraved boomerang. I have one of them myself. I joined Gensler right out of school and worked at the company for three years before leaving to go to graduate school and then to work for a smaller competitor. When Gensler noticed my work and recruited me to return in a senior role, I couldn’t have been happier. All that said, Ram needs to be careful about how he brings Hari back. First, it should be a strategic decision, not an emotional one. He needs to put aside both his sentimentality and his resentment and really look at whether Hari can make a difference in the business. He also needs to talk to Hari about why he left and what his role would be should he come back. Expectations must be crystal clear. Hari would need to respect the positions of those who advanced in his absence and understand exactly what his new role would entail. For example, international expansion might mean that he’s again working long hours and traveling. Perhaps most important, Ram should reflect on how he can prevent high-level turnover in the future. No business leader wants people walking out the door because of money. Ram needs to put more incentives on the table, such as profit sharing or bonuses tied to growth targets so that his team members feel as if they’re all in it together for the long term. HBR’s fictionalized case studies present problems faced by leaders in real companies and offer solutions from experts. This one is based on the HBS Case Study “The Indian Greenpreneur: Management of Frenemy Talent and Coopetition” (case no. WI3372), by Jyotsna Bhatnagar, Neha Paliwal Sharma, and Nakul Gupta.

Case Study: Should You Rehire Someone Who Left for a Competitor?

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