With record layoffs in the current recession, more organizations are recognizing the value of staying in touch with former staff members. By creating and supporting corporate alumni networks companies are able to leverage talented employees and build a lifelong affiliation.
When employees leave an organization, managers often wish them well, relationships end and businesses ignore a highly valuable resource for future hires, new deals, partnerships, referrals and brand ambassadors: corporate alumni networks. “Now, more than ever, companies are investing in alumni social networks as a way to retain access to talent that they have been forced to layoff,” explains Anne Berkowitch, CEO of SelectMinds, a corporate social networking solution. “Former employees represent future hires, partners, brand ambassadors, customers, mentors and more. Maintaining these relationships can be extremely beneficial to organizations in the areas of staffing, branding and new business development – ultimately representing millions of dollars in measurable benefits.”
When you look at the value and cost savings an organization stands to gain as a result of an alumni social network, it far outweighs the upfront investment. Deloitte, for example, reported savings of $1.6million in headhunter fees due to the 31 recruits it found through its alumni network. “One of our large professional services firms identified $180 million in new business through alumni relationships in just one year,” confirms Berkowitch.
While there is no denying that times are tough right now, companies are continuing to invest in an alumni social network. Berkowitch believes that this is because forward thinking organizations want to invest in people and technology in ways that will give them an advantage when the market turns. “When the market recovers, there will be an urgent need to hire quality talent very quickly. Those organizations who have an alumni social network will find themselves ahead of the curve since they already have a highly vetted and qualified candidate pool in their alumni network,” she says.
The investment in this technology may seem pretty huge when sites like Facebook and LinkedIn, exist and allow companies a branding presence on the internet with alumni who may be on those sites. However, Berkowitch believes that building engaged relationships with alumni members requires a more targeted and personal approach. Most companies are only comfortable with deeper information exchange on private and secure networks, where all members are authenticated and controls can be used to target and moderate interactions. “At SelectMinds we encourage our clients to have a presence on LinkedIn and Facebook – as a way to funnel alumni to their private corporate alumni networks, where they can have full access to all alumni data and manage outreach on a highly targeted, more effective basis,” says Berkowitch.
While the benefits of corporate alumni networks are obvious for the organizations that sets them up, why are former staff members interested in joining a corporate alumni? Well, particularly in a down economy, people turn to those they know and trust for information. A corporate alumni social network, sponsored by the company itself, is a place where former employees can safely and securely build relationships with former colleagues, access industry information, job opportunities and knowledge, as well as network with their former peers. The corporate alumni is a trusted and valuable source of information and place of interaction that they cannot get elsewhere.
“Our client alumni social network statistics speak for themselves,” explains Berkowitch. “Over the past six months, for example, our client alumni social networks have experienced on average, an increase in usage of 65 percent. One of our clients, Hewitt Associates, was launched in December 2008 and within the first four months, more than 2600 alumni were registered on the site, which was double what they had expected. These numbers demonstrate the level of interest among alumni in joining and utilizing these networks.”
“There are all kinds of good reasons, especially with top performers, to maintain an alumni database, but more than that to actively manage an employee’s exit from the company in a positive way and then try to maintain some type of rapport with them going forward,” says Allan Schweyer, President of the Human Capital Institute. “It’s not unusual to return to a former place of employment, particularly when you’ve left it on good terms. And a smart company doesn’t begrudge good people who leave, especially as they are going away and will probably pick up great experience somewhere else.”
Rehiring former employees is an extremely cost efficient way to source talent and save organizations a significant amount of money. Rehires can cost less than half to rehire compared to an outside hire, saving companies thousands of dollars per hire and statistics show that they will also come up to speed almost 50 percent faster than outside hire and they know the business and how to navigate through the organization, picking up the job much faster than an outside hire. Rehires are proven to stay twice as long as outside hires in a position with many staying for the remainder of their career since the decision to re-join the organization is a much more informed decision on both parts. In one year alone, for example, Deloitte rehired 31 people found in its corporate alumni network and Hewitt Associates recently reported that in just six months since their launch, they have successfully rehired nearly 30 alumni.
Due to advances in technology, the cost of operating alumni programs is quickly going down, while the ROI is higher than ever. By keeping in contact with many valuable employees it is possible to continue to drive business and maintain a valued and worthwhile connection for both employees and employers alike.
According to Anne Berkowitch, CEO of SelectMinds, the top five advantages to becoming part of a corporate alumni network are:
• Access to highly relevant career marketplace, both job opportunities and candidates
• Access to privileged content not found elsewhere: intellectual capital and professional development resources
• Ability to ask questions/search for information from highly relevant and trusted individuals
• Continued social and professional association with a brand, organization and culture – particularly in the case of strong brands
• Corporate perks offered to employees and extended to alumni
Key differentiators for successful programs
Dr John Sullivan has identified 10 factors that clearly differentiate good corporate alumni programs in his report Corporate Alumni and Boomerang Recruiting Programs Are Hot Due to Layoffs:
1. A strong business case: The program needs to be perceived as business initiative, not another HR fad
2. Prioritize alumni: The best programs prioritize their alumni based on their future value to the organization
3. Use technology: Use software or tools to keep track and maintain the relationship
4. Dual focus: Focus on rehiring alumni and using them for business development purposes
5. Utilize social networks: The best programs use multiple channels to reach target talent
6. Use metrics: Metrics are used to drive continuous improvement
7. 10 percent rehire rate: 10-20 percent of all hires should be boomerangs directly traced to the alumni network
8. Electronic capability: Key programs must be web-based
9. Dedicated webpage: A webpage should be designed exclusively for corporate alumni
10. Diversity: Information and options should be flexible to fit individual needs