INTRODUCTION

It used to be that when you walked out the door that was it The working relationship was over once you turned in your ID badge and collected your last paycheck But many companies are reconsidering that strategy After all skilled employees arent that easy to find especially ones who know the corporate culture So companies have taken a page from social sites and launched their own alumni networks The online sites which typically are controlled by individual companies like Deloitte are a way for ex-employees to connect with their former bosses and former co-workers mdash and maybe boomerang back often with newly acquired skills

The marketplace is a noisy place these days making the competition for business great employees and positive name recognition more intense than ever Organizations that maximize all their resources and take a team approach to overcoming business challenges are the ones that will stand above the rest and be noticed

Easy to say but how exactly do you get noticed Spend $2 million for a 30-second ad during the Superbowl Sponsor a championship golf tournament Distribute lots and lots of personalized pens and coffee cups Or turn to people that already know and respect your company ndash former employees

Law firms consulting companies and other professional services were among the first to recognize the value that their alumni provide Former colleagues and supervisors stay in touch with alumni if not on a formal basis then with an occasional email round of golf or cocktail They know that the relationship can lead to a new sale partnership investor or employee

ldquoThe potential for gaining new opportunities is tremendousrdquo says Ed Tarlow President of the Boston-based law firm Tarlow Breed Hart Murphy and Rodgers

Other types of businesses are also discovering the value associated with maintaining contact with former employees Frequently these organizations have a continuing struggle with high turnover or have an insufficient pool of qualified candidates from which to choose

A company alumni network is made to remain in contact and maintain relationships with former employees This offers organizations a new resource for enhancing organizational capabilities Though making formal corporate alumni networks has recently become very important they have been loosely formed and utilized since as long as there have been companies and employees who leave them ndash by letter mailings volunteer groups gatherings etc The advent of social media has made this even easier now Todayrsquos alumni networks utilize Email lists blogs Yahoo Google and Facebook groups

These Alumni networks not only benefit the companies but also the alumni concerned

Through these networks the companies get their recruiting network ie the company may in future re-recruit these alumni These rehired alums are valuable new employees as they are easily integrated back into the organization and bring with them knowledge skills and abilities already tailored to the organizationrsquos workplace since they have worked there earlier Hence it would reduce recruitment costs by ldquoleveraging dormant assetsrdquo while also cultivating professional resources by fostering diversity

Also maintaining relationships are necessary as companies think of alumni as potential partners in collaboration on projects or as sources of innovative ideas and as subjects for market research Alumni are also valued as potential long-term investors in the firm

Development of an alumni network would give a company an opportunity to become an industry pioneer establish thought leadership and enhance its reputation as an ldquoemployer of choicerdquo At the same time the alumni by being in this network get a lot of opportunities ndash not only a job opportunity to work again as a part of the organization but also opportunities for new business ventures

This network also allows the alumni to keep in touch with their former colleagues and widen their social networks

For many years recognition of the advantages of alumni networks has been restricted to educational institutions and professional services firms Recently however several large-scale trends ndash increasing globalization the ldquowar for talentrdquo changing approaches to work and employment relationships and the ubiquitous adoption of enabling technologies ndash have encouraged many companies across all sectors to proceed with major initiatives to harvest their intangible assets

WHY NOW TRENDS AND DRIVERS

Corporate alumni networks are now well-positioned to develop and diversify beyond theUniversity models by creating innovative ldquovirtuous circlesrdquo of mutual benefit for the company and its employees The possibilities have been explored by a relatively small number of pioneering companies primarily in the professional services sectors In recent years a significant and growing number of corporations have launched concerted efforts to cultivate their alumni relationships in purposively managed organizations In answer to the question ldquoWhy Nowrdquo it is necessary to explore the trends and drivers behind this sea change in corporate culture which may be reaching a tipping point The key factors can be grouped under five subject areas information technology the business environment the work environment competitive advantage and the culture of trust

1 Information Technology

The basic underlying or enabling factor in the rise of interest in alumni networks has been the revolution in IT most importantly the ubiquitous penetration of low-cost and increasingly robust communications networks what has been described as ldquothe death of distancerdquo Alumni almost by definition constitute a widely dispersed population who no longer come to the office attend meetings and work on common projects It has always been possible to reach out to alumni but the degree of difficulty has been lowered by orders of magnitude Networks are the norm and have created an increasingly small world that becomes denser and denser as the webs connecting its locations proliferate They have also led to new forms of social behaviour The explosion of social networking on the Internet (MySpace Bebo Facebook etribes) has captured headlines and attracted billions of dollars from media companies and is now moving into a phase of intense competitive segmentation These ldquocommunitiesrdquo are relatively open and unstructured free-for-alls But they represent a major trend that has important implications for traditional business corporations A number of web service providers now provide more structured communities either for mature professionals as individuals or as third-party platforms customized for the programs of specific corporations

2 Business Environment

Globalization has been as pervasive as communications technology for the two go hand-in-hand and has lowered barriers of all kinds ndash regulatory economic national and even corporate More open markets for products and services have brought with them more open markets for labour and talent outsourcing is just one example Intense competition for human resources has caused leading companies to reconsider how they manage their workforce and the shifting pool of talent available to them

In the past fearing the loss of valued resources many companies have adopted defensive ldquofortressrdquo strategies that discouraged communications with alumni but in a war for talent amid scarcity these policies can be self-defeating Attitudes are changing and more companies realize that using networks to extend market reach can bring access to a larger talent pool

3 Work Environment

The traditional workplace too is being transformed by both the disruptive and creative effects of globalization IT and the competition for talent From an employee perspective job security is more vulnerable to restructuring downsizing and outsourcing From a company perspective employees are more mobile and more transient leading to higher turnover rates which increase the costs of recruitment At the same time more dynamic job markets are creating opportunities for innovation on both sides of the equation The traditional paradigm of ldquoemployment for liferdquo is no longer the norm in its place we find greater emphasis on the idea of the ldquolifecycle of employmentrdquo Under the impact of changing lifestyles many employees are developing alternative models for managing their careers balancing their terms of engagement with personal commitments at different stages Increasingly the ldquobest and brightestrdquo view their professional experience as a portfolio of relationships that can be renewed as opportunities emerge Faced with changing demographics such as the aging of the workforce and the need for diversity employers are adopting flexible approaches to managing the flow of talent through their organizations From both perspectives corporate alumni networks are a compelling means of negotiating the new dynamics of job markets

4 Competitive Advantage

In many respects the trends we have looked at have levelled the playing field for all players in any given market With ready access to many of the resources that previously were difficult to tap small and virtual companies can compete with the large and established companies Equal access to resources however has placed a higher premium on what one can actually do with them As a consequence many authorities argue that in the future the essential sources of competitive advantage will be knowledge and innovation Here too networks will play a crucial role by crossing internal and external barriers to the flow of ideas competencies and intelligence (in the sense of ldquonews about the latest developmentsrdquo) Alumni networks for example can help address the problems of ldquobrain-drainrdquo and the loss of institutional knowledge by opening channels of communication between former and current employees By the same token they can open windows on innovations outside the companys usual focus creating opportunities for cross-pollination

5 The Culture of Trust

One of a corporations most important sources of value is that intangible quality called ldquoculturerdquo which can also be an agent acting both for and against change A companys culture is often seen as a function of its organization but recent research shows that it is also importantly influenced by internal ldquosocialrdquo networks that cross organization boundaries An emerging management challenge is to understand how these networks work in order to leverage their positive effects Like markets networks work based on an exchange of value But without contracts or explicit organizational structures to govern the exchanges they also depend to a greater degree on the element of trust that provides a foundation for collaboration And trust is notoriously vulnerable to bad faith Managements that want to drive value through cultural change need to understand how to cultivate trust throughout their networks This is another reason why corporate alumni networks are so interesting because membership in them is entirely voluntary they rely on and cultivate loyalty and a perception of common bonds which in turn provide a foundation for trust Loyalty too of course must be earned through an exchange of value and the value proposition of corporate alumni networks will depend on balancing the practical and tangible benefits for both alumni and the company Those tangible benefits will then strengthen the intangible relations built on loyalty and trust

WHAT EXACTLY ARE CORPORATE ALUMNI NETWORKS

Corporate alumni networks are organizations whose members are the former employees of a particular company Beyond this basic characteristic they vary widely in terms of size longevity origins purpose governance authority structure activities and even membership criteria Chris Gopsill Executive Producer at First Tuesday Zurich began his presentation of research findings on the current state of these organizations by describing three basic types

First Tuesdays benchmarking survey of 15 of the most prominent large corporations with alumni programs provides an important background on the status of these networks some of them long-standing some in development some of the hybrid kind and under evaluation All of the companies are multinationals and the respondents were based in either the United States (30) or Europe (70) including the UK Germany and Switzerland They covered several industry sectors including professional services and management consultancy information technology (IT) manufacturing travel and pharmaceuticals Due to the differences in type and status the survey could not lead to a systematic analysis but did produce many valuable highlights regarding basic operations membership benefits for the alumni and the company and critical success factors

1 Independent ldquograssrootsrdquo associations are those founded solely on the initiative of former employees without company support or approval (or disapproval) They are informal groups that provide directories of members organize occasional events and reunions and may coordinate other projects It is hard to estimate their number (there is no association of associations) but it runs into the thousands Their success is often temporary or hard to sustain

2 Company-supported grassroots associations were also founded independently but have grown sufficiently in size and stature to win recognition from the company which may also provide financial and other means of support These hybrids vary widely and are much fewer in number probably because only a few large corporations have alumni populations large enough to reach ldquocritical massrdquo Their activities are similar to those of the independent groups sometimes facilitated by web-based platforms The most notable example in this category is the association started by alumni of the US-based consumer marketing giant Procter amp Gamble

3 Company-managed associations are those founded and chartered by the company with board-level approval have explicit objectives and policies and are managed by full-time staff with executive oversight This type has existed in the professional services sector for

years in a few cases for decades but in recent years they have penetrated several industries particularly among large multinationals

Considering company-initiated alumni networks the commonly mentioned elements involved in realizing the networkrsquos purpose include (1) securing executive support (2) defining network participants (3) determining content and information to be shared and (4) creating the channel(s) by which connection with alums will be maintained (Canabou 2002 Kirsner 2002 Stewart 2003)

First gaining buy-in from company executives is vital to ensure the network initiative is supported with adequate resources and taken seriously by those both inside and outside of the organization Such executive support will encourage meaningful participation by those involved in the network through exhibiting company values towards its human resources

Second establishing who is to participate in the alumni network involves two different issues (1) deciding on network management being performed in-house or contracted out and (2) defining which ex-employees are eligible to participate Available company resources along with the anticipated size of the alumni network are defining variables as to how the network will be managed (ie in-house or outsourced) Regardless appointment of internal persons to be responsible for the design and delivery of the network or oversight of outsourced partners is necessary (Stewart 2003) Outsourcing through the use of a specialized network services firm such as Bernard C Harris Publishing Corporate Alumni and SelectMinds is one efficient method to manage onersquos network via a web-based platform (Kirsner 2002)

To determine which ex-employees to invite to participate in the alumni network several criteria are commonly used The employeersquos tenure at the company and reason(s) for departure play a significant role in determining if an invitation to the corporate alumni network should be offered (Stewart 2003) As employees vary in terms of their knowledge skills and abilities they too vary regarding their strategic importance to the firm (Lepak amp Snell 1999) Inviting only departing employees considered to be part of an organizationrsquos core workforce workers directly contributing to the competitive advantage of the organization (Delery amp Shaw 2001) would result in higher potential alumni contributions to the firm In addition the nature of the alumni base whether it is companywide or division-specific often acts as a selection criterion for network participation (Stewart)

Third to encourage participation in the network and foster symmetric ties Canabou (2002) states there must be valuable information and activities offered in order for ex-employees to remain engaged Access to an up-to-date alumni directory for the purpose of tapping new job opportunities is noted as ldquothe number one benefitrdquo of alumni networks (Canabou) In addition other meaningful resources to make available include job boards training classes job referrals management resources discussion boards alumni and company news along with cocktail parties

to facilitate further networking (Canabou 2002 Kirsner 2002 Stewart 2003) Gaining input from the alumni base is also important to ensure their interests are being met and to in turn foster continued engagement and connectedness to the organization (Canabou 2002)

Fourth the decision as to how the organization will remain connected to its former employees is an important one The use of a web-based system allows for easy and efficient management of alumni contact information and general data Alumni access through a web home page also offers practical sense in addition to contact via email e-newsletters and mail Events also represent a valuable means for maintaining connections to alumni such as alumni networking parties or corporate charity initiatives Considering the nature of the alumni base and their comfort level with technology older ex-employees may be less likely to engage on-line and may require more customized delivery such as mailings of alumni communications

With the ultimate goal of establishing an alumni network to help improve the companyrsquos business (Stewart 2003) there are benefits to be accrued to both the participating alumni and the host organization For ex-employees maintaining good-standing with former employers makes good sense Alumni network participation provides access to information sources that may prove to be rich sources for employment andor business opportunities For the sponsoring organization an alumni network can serve as a vital connection to tacit knowledge held in the minds of former employees provide access to a talent pool for rehire or contract work and serve as a source of referrals and new business partners (Canabou 2002 DeLong 2004 Kirsner 2002 Stewart 2003) Further consideration of the potential gains that may be acquired by an organization via their alumni network such as employee recruitment workforce flexibility knowledge retention and organizational culture are explored next In light of the dynamic and challenging environment facing organizations today examination of new avenues to leverage organizational resources is vital to remaining a viable competitor with above average profits

ALUMNI NETWORKS AND EMPLOYEE RECRUITMENT

Building and maintaining a strong human resource capability within an organization starts with the attraction of high quality good fit potential employees Recruitment serves as a primary means of attracting future employees along with targeting specific applicant pools and offering signing incentives (Rynes amp Barber 1990) Key to a successful recruitment strategy are the sources used by organizations to recruit potential employees (Noe et al 2006) The use of internal sources defined as filling vacancies with current employees offers several advantages including (1) the firmrsquos familiarity with internal candidates (2) the applicantrsquos knowledge of the firm and (3) the lower recruiting costs (Noe et al 2006) Recruiting from an alumni pool would be expected to generate the same advantages as promoting from within Yet additional benefits may also be accrued As former employees have gone on to gain additional knowledge skills abilities and insights by way of other experiences these potential rehires represent potentially higher octane employees able to generate performance results better and faster than a new hire without previous experience with the firm Organizational alums may also serve as valuable referral sources given their knowledge of ldquogood fitrdquo with the former employer and their interest in maintaining connections to those within that organization

In light of an organizationrsquos specific labor needs and anticipated tight labor markets organizations can benefit from maintaining a bond with former employees Stewart (2003) suggests employers could be faced with an estimated 25 annual turnover of employees as labor trends indicate workers are likely to change jobs up to eight times in their working careers according to the US Bureau of Labor Statistics Hence keeping in touch with former employees through an alumni network represents a valuable recruitment tool for organizational success

WHY DO COMPANIES MAINTAIN CORPORATE ALUMNI NETWORKS

Organizations typically build corporate alumni networks with the sole purpose of re-recruiting however investing in such a network can bring ancillary benefits as well for example an increased number of high-quality referrals from alumni in the network and new business opportunities

1048707 High-performing corporate alumni represent a valuable talent pool mdashIn a 2005 survey of 100 US organizations 54 of respondents stated that they had actively sought to rehire former employees because they bring the following benefits123

Quick time-to-productivitymdashThe onboarding period and time-to-productivity is relatively short for alumni as they are already familiar with the companyrsquos people politics and processes

Experience and insight from other organizationsmdashReturning corporate alumni often bring back new skills and competencies that can make them more effective in their roles or a new perspective that enables them to see processsystem inefficiencies in their alumni employer They may also bring information about how competitors do business

1048707 Corporate alumni are relatively cost-effective to rehire mdashPursuing corporate alumni rehires may be a cost effective supplement to using contingency search firms particularly for highly technical or specialized positions where talent is in high demand Organizations with an established corporate alumni network may not need to hire an external party for assistance with the first phase of the recruitment cycle (eg generating ldquonamesrdquo)

1048707 Corporate alumni can be a good source of candidate referrals mdashEven if they do not return as employees corporate alumni who feel connected to the organization may be more likely to refer other potential hires With their understanding of the corporate culture and certain job roles they are likely to recommend quality referrals with strong organization and job fit 4 Strategies for converting these referrals into hires include building a competitive employment value proposition (EVP) and leveraging current employees to communicate the EVP Further Council research on the importance of crafting a compelling EVP is available in our study titled Attracting and Retaining Critical Talent Segments5

1048707 Alumni provide new business opportunities mdashOrganizations such as McKinsey amp Company and Bain amp Company report that alumni often provide new business opportunities through some of the activities listed below

Purchasing goods or services from their former organization Facilitating strategic alliances between their former employer and their current

employer Referring (directly or indirectly) potential customers resources and vendors to their

former employer

BUSINESS DEVELOPMENT AS A CONTACT SPORT

ldquoBusiness development is a contact sportrdquo says Attorney Tarlow ldquoYou send your business to the last person with whom you had positive contact Whoever has the best strategy and the tools for developing and maintaining their contacts winsrdquo

ldquoIn the legal world as in other arenas contact with alumni delivers business referrals an important asset particularly in these times of slow or moderate growthrdquo Tarlow says ldquoPeople simply feel more confident hiring someone they know or someone personally recommendedrdquo

Alumni networks also help law firms track the progress of a former employeersquos career If the individual developed a specific expertise the firm requires it would have an opportunity to tap into the individualrsquos knowledge form a business alliance or perhaps lure the individual back

ldquoEmployers secure a competitive advantage when they are able to track their alumnirdquo he says In that regard Tarlow sees that a strong alumni network could help lower recruiting costs Firms that need to expand their staff with attorneys with specific skills and experience usually enlist the help of a recruiter at placement fees of 25 - or more depending on the position On an annual salary of $100000 the recruiter would get $25000 ldquoThatrsquos not insignificantrdquo Tarlow says

To understand the magnitude of the expense imagine that if a professional firm hires eight new staff members each year at a base salary of $100000 recruiter fees alone would total at least $200000

Excluding situations that require placement fees the average cost of replacing an employee is about $10000 per position according to the Employment Management Association The Society for Human Resources Management estimates the average cost of a rehire to be $5000 ndash and rehires tend to stay twice as long

On the other hand a firm can hire a former employee or candidate recommended by a former employee and save tens of thousands of dollars per hire Further studies show that new hires are 40 less productive than rehires during the first few months of employment Therefore rehiring former employees or enlisting the assistance of former employees to recruit new employees should not be ignored

Human Resource expert Arte Nathan New Products Thought Leader for Mellon HR Solutions advocates the creation of communities to build a companyrsquos success and sees alumni networks as facilitating that effort

ldquoBelonging to a corporate community makes sense for both the individual and the corporation When you facilitate people coming and going and assist your community in staying connected companies will be able to take advantage of great resources that would otherwise walk out the door and drop off the radar screenrdquo Nathan says

Nathan sees that industries experiencing growth or facing labor shortages such as healthcare would gain a competitive advantage via connections with a community of former employees However that advantage could be experienced by any organization whose success in the marketplace is a result of the quality of its workforce

ldquoThe important thing here is to build up communities of prospective employees current employees and former employees These communities can give your company a competitive edge by continuing to add value to your company in conventional -- and unconventional -- waysrdquo

Nathan points out that alumni include not just people at the start or middle of their careers but retirees Keeping in touch with this group is appropriate because most will maintain some kind of connection simply because of benefits and investment in the organization Companies that embrace a connection with their retirees will earn their loyalty and the opportunity to rely on the retiree as a source of information inspiration and knowledge Additionally the retiree may serve as a referral for new business and potential employees

In a report on ldquolost knowledgerdquo in the global chemical industry worldwide consulting firm Accenture discusses how the retirement or departure of senior scientists poses a costly and potentially devastating blow to chemical companies According to the February 2002 report these senior scientists had over the years saved their companies literally millions of dollars each because of their knowledge about certain processes that came from experience not textbooks

As these scientists retired or left the chemical company they took with them information that they had accumulated over the years

Accenture recommended that chemical companies maintain a tight relationship with their expertsndash even hiring them as consultants or retaining them on an as-needed basis -- to transfer information serve as mentors and be available as sources of knowledge and advice as needed

Research Fellow David DeLong writes ldquoIn the current economy it will be tempting for leaders to give in to the demands for short-term financial performance But savvy executives recognize that they also must champion more costly knowledge retention strategies because some of their units could be headed for a point of no return in a few yearsrdquo

The lesson could well be applied to many other knowledge-based industries

While itrsquos clear that alumni networks can play a key role in an organizationrsquos success itrsquos important to remember that not just any kind of network will do The costs of running a manual or unstructured alumni network can be high Alumni networks that automate repetitive tasks and shift the maintenance of contact information to former employees will deliver a return on your investment

The methods most companies have used to keep in touch with their alumni have until recently been primarily informal inefficient and left to individuals to create ndash rather than a company-wide initiative But as Tarlow says ldquoIf you donrsquot have the database or tools itrsquos very time-consuming Therersquos no immediate return on your investmentrdquo

Tarlow cites the act of sending a holiday card to former employees as a simple gesture that shows employees you remember them and valued their service It can have positive results as long as sending the card isnrsquot a time-consuming costly process

Automated alumni networks can also handle registration event management job postings and news publication with minimal staff intervention

ACTIVITIES CONTRIBUTING TO AN EFFECTIVE CORPORATE ALUMNI NETWORK

Organizations face three main challenges when managing their alumni hiring programs gaining the active participation of alumni in the network targeting re-recruiting efforts at the alumni segments most likely to drive quality of hire and monitoring the health of and returns from the network Listed below are a few guidelines that companies may wish to consider as they confront these challenges

Dr i v e A c t i v e Participation in the Ne t w ork

1 Highlight compelling value proposition for participation in the networkmdashOrganizations often spend a significant amount of timeresources creating their corporate alumni network but underinvest in marketing strategies to increase participation rates One method for driving interest in the initiative is to highlight the benefits of joining the network some of which include following

Access to a group that engages in social events professional training volunteering andor provides an opportunity for alumni to share information on jobs and careers as well as leads and references for business ventures

Discounts on products or services

2 Make employees aware of the corporate alumni network during the exit processmdashInternal analysis from organizations such as Ernst amp Young suggests that the vast majority of alumni return to the organization soon after their initial departure thus organizations may want to provide employees with the following information during the exit proces sign-up procedures network benefits and scope of the network (see page 3 for further details from Ernst amp Young alumnirecruiting outreach program)

Target the Al umni Segments Most Likel y to Dri ve Q uality of Hire

3 Focus on high-value corporate alumni segmentsmdashFocusing efforts on former employees who were top performers or those who demonstrated a strong commitment to the job or company helps ensure a higher quality of network members In addition some organizations extend the scope of their corporate alumni program to include those who were not permanent full-time employees such as interns or contractors The list below suggests employee segments to target for the program

Top performers who left voluntarily Individuals who occupied key positions Individuals with key skills contacts or experience Individuals leaving to pursue further education in disciplinescritical to company

operations Retirees who may wish to return to employment High-performing interns or contractors

Build a D a shboard to M easure O v e r all Program Success and Track A lumni S e gments that Generate Large Number of Qua l ity Re-hires

4 Build and monitor metrics specific to the alumni network programmdashBuilding a dashboard with program-specific qualitative and quantitative metrics helps companies to monitor the overall health of their network and also make principled decisions on where to over- or under-invest in the future (eg former high performing internscontractors may have a higher conversion rate than top performers who left voluntarily so companies would therefore host more events for this segment) A list of potential metrics is included in the table below

Table 1 Checklist of Alumni Network Metrics

Quantitative Metrics

Qualitative Metrics

9 Cost per hire of corporate alumni vs regular hires9 Time to fill for corporate alumni vs regular hires9 Number of corporate alumni entered in program database9 Number of corporate alumni hired9 Number of referrals made by corporate alumni9 Number of hires generated by corporate alumni referrals9 Retention rate for corporate alumni

9 Employee engagement levels of corporate alumni vs hires from other channels

9 Additional skills and experiences brought to the

organization as a result of rehiring corporate alumni

CASE STUDY

Alumni linked in to old firms

This is a summary of an article originally published by LM SIXEL in the Houston Chronicle on Feb 3rd 2010

Janet Roth wasnt looking for a new job But her neighbour a former colleague at Deloitte encouraged Roth to join the firms online network for former employees and retirees Roth had worked at Deloitte for seven years leaving in 1996 to join one of its clients Late one night Roth was scrolling through Deloittes alumni site and saw a job opening that sounded interesting She applied went through a streamlined interview process and rejoined Deloitte in 2007 She joined the network mostly for social reasons ldquobut I ended up with a jobrdquo said Roth who is now senior manager in the mergers and acquisitions group in Houston It used to be that when you walked out the door that was it The working relationship was over once you turned in your ID badge and collected your last paycheck

But many companies are reconsidering that strategy After all skilled employees arent that easy to find especially ones who know the corporate culture So companies have taken a page from social sites and launched their own alumni networks The online sites which typically are controlled by individual companies like Deloitte are a way for ex-employees to connect with their former bosses and former co-workers mdash and maybe boomerang back often with newly acquired skills

New skills

Its efficient said Cathy Clonts president of Alumni Web Services which designs alumni networks for corporate clients Members update their contact information and any new skills they acquire Companies in turn can data-mine to find the skills theyre looking for

Its also a way a company can promote its own brand to a group that is already loyal Clonts said Deloitte likes to refer to the members of its AlumNet as ldquocolleagues for liferdquo said Coleman Rowland a partner in energy and resource practices in Houston He said Deloittes alumni network has become such an important business imperative that the firm has seven regional alumni network coordinators around the nation who keep up with the entries Of the 100000 alumni nationwide who left the firm in good standing and are eligible to join Deloittes network 56000 have registered Of those 4000 are in Houston

No more ledgers

In the past the firm kept up with its former employees by updating addresses in ledgers and spreadsheets But that wasnt easy especially when people move so frequently Roth for example moved from Houston to Minnesota to Florida and back to Houston in a series of corporate transfers ldquoDeloitte lost track of me raising three kidsrdquo she said with a laugh It took

running into Rowland who mentioned the network for Roth to reconnect with her old firm Clients and other ldquofriends of the firmrdquo cant get onto the network to troll for possible job candidates but the firm does list its job openings as a courtesy Thats how one of its clients a non-profit found its controller Rowland said And it didnt have to pay any recruiting fees

The Deloitte network which is more LinkedIn than Facebook isnt set up as a chat site or a place to extol the pleasures of retirement Members however can send e-mails to each other through the Deloitte server ldquoIts a way to really expand your networkrdquo Roth said

CONCLUSION

A company alumni network is made to remain in contact and maintain relationships with former employees This offers organizations a new resource for enhancing organizational capabilities Though making formal corporate alumni networks has recently become very important they have been loosely formed and utilized since as long as there have been companies and employees who leave them ndash by letter mailings volunteer groups gatherings etc

Adding to this social networking is redefining the way we interact with colleagues corporate alumni and business partners Forward-thinking employers recognize that investing in life-long relationships through comprehensive alumni programs carries measurable value in recruitment employment branding and new business development

Companies have realised that alumni provide an inside track to new business opportunities It can also be highlighted that alumni who are re-hired stay longer and cost less to onboard than talent new to the organization Also Alumni provide great referrals and are excellent often proactive ambassadors for the company brand

In short these networks are very beneficial to the companies as well as the alumnis due to which its becoming more popular and very important Few companies that have seen the trend and adapted to it are ndash Deloitte Ernst amp Young McKinsey amp Company and Bain amp Company

Thus Alumni networks are seen as

- A key potential driver of competitive advantage for employers- A rich untapped source of innovation human talent and business relationships- Still emergent (in most sectors) and hence demanding clear management focus

AKNOWLEDGEMENT

We would like to thank Ms Yesha Sheth for giving us this topic We would also like to thank her for her guidance and support throughout the project

BIBLIOGRAPHY

wwwselectmindscom

wwwclcexecutiveboardcom

wwwxingcom

wwwfirsttuesdaych

wwwwikipediacom

wwwencyclopediacom

These Alumni networks not only benefit the companies but also the alumni concerned

Through these networks the companies get their recruiting network ie the company may in future re-recruit these alumni These rehired alums are valuable new employees as they are easily integrated back into the organization and bring with them knowledge skills and abilities already tailored to the organizationrsquos workplace since they have worked there earlier Hence it would reduce recruitment costs by ldquoleveraging dormant assetsrdquo while also cultivating professional resources by fostering diversity

Also maintaining relationships are necessary as companies think of alumni as potential partners in collaboration on projects or as sources of innovative ideas and as subjects for market research Alumni are also valued as potential long-term investors in the firm

Development of an alumni network would give a company an opportunity to become an industry pioneer establish thought leadership and enhance its reputation as an ldquoemployer of choicerdquo At the same time the alumni by being in this network get a lot of opportunities ndash not only a job opportunity to work again as a part of the organization but also opportunities for new business ventures

This network also allows the alumni to keep in touch with their former colleagues and widen their social networks

For many years recognition of the advantages of alumni networks has been restricted to educational institutions and professional services firms Recently however several large-scale trends ndash increasing globalization the ldquowar for talentrdquo changing approaches to work and employment relationships and the ubiquitous adoption of enabling technologies ndash have encouraged many companies across all sectors to proceed with major initiatives to harvest their intangible assets

WHY NOW TRENDS AND DRIVERS

Corporate alumni networks are now well-positioned to develop and diversify beyond theUniversity models by creating innovative ldquovirtuous circlesrdquo of mutual benefit for the company and its employees The possibilities have been explored by a relatively small number of pioneering companies primarily in the professional services sectors In recent years a significant and growing number of corporations have launched concerted efforts to cultivate their alumni relationships in purposively managed organizations In answer to the question ldquoWhy Nowrdquo it is necessary to explore the trends and drivers behind this sea change in corporate culture which may be reaching a tipping point The key factors can be grouped under five subject areas information technology the business environment the work environment competitive advantage and the culture of trust

1 Information Technology

The basic underlying or enabling factor in the rise of interest in alumni networks has been the revolution in IT most importantly the ubiquitous penetration of low-cost and increasingly robust communications networks what has been described as ldquothe death of distancerdquo Alumni almost by definition constitute a widely dispersed population who no longer come to the office attend meetings and work on common projects It has always been possible to reach out to alumni but the degree of difficulty has been lowered by orders of magnitude Networks are the norm and have created an increasingly small world that becomes denser and denser as the webs connecting its locations proliferate They have also led to new forms of social behaviour The explosion of social networking on the Internet (MySpace Bebo Facebook etribes) has captured headlines and attracted billions of dollars from media companies and is now moving into a phase of intense competitive segmentation These ldquocommunitiesrdquo are relatively open and unstructured free-for-alls But they represent a major trend that has important implications for traditional business corporations A number of web service providers now provide more structured communities either for mature professionals as individuals or as third-party platforms customized for the programs of specific corporations

2 Business Environment

Globalization has been as pervasive as communications technology for the two go hand-in-hand and has lowered barriers of all kinds ndash regulatory economic national and even corporate More open markets for products and services have brought with them more open markets for labour and talent outsourcing is just one example Intense competition for human resources has caused leading companies to reconsider how they manage their workforce and the shifting pool of talent available to them

In the past fearing the loss of valued resources many companies have adopted defensive ldquofortressrdquo strategies that discouraged communications with alumni but in a war for talent amid scarcity these policies can be self-defeating Attitudes are changing and more companies realize that using networks to extend market reach can bring access to a larger talent pool

3 Work Environment

The traditional workplace too is being transformed by both the disruptive and creative effects of globalization IT and the competition for talent From an employee perspective job security is more vulnerable to restructuring downsizing and outsourcing From a company perspective employees are more mobile and more transient leading to higher turnover rates which increase the costs of recruitment At the same time more dynamic job markets are creating opportunities for innovation on both sides of the equation The traditional paradigm of ldquoemployment for liferdquo is no longer the norm in its place we find greater emphasis on the idea of the ldquolifecycle of employmentrdquo Under the impact of changing lifestyles many employees are developing alternative models for managing their careers balancing their terms of engagement with personal commitments at different stages Increasingly the ldquobest and brightestrdquo view their professional experience as a portfolio of relationships that can be renewed as opportunities emerge Faced with changing demographics such as the aging of the workforce and the need for diversity employers are adopting flexible approaches to managing the flow of talent through their organizations From both perspectives corporate alumni networks are a compelling means of negotiating the new dynamics of job markets

4 Competitive Advantage

In many respects the trends we have looked at have levelled the playing field for all players in any given market With ready access to many of the resources that previously were difficult to tap small and virtual companies can compete with the large and established companies Equal access to resources however has placed a higher premium on what one can actually do with them As a consequence many authorities argue that in the future the essential sources of competitive advantage will be knowledge and innovation Here too networks will play a crucial role by crossing internal and external barriers to the flow of ideas competencies and intelligence (in the sense of ldquonews about the latest developmentsrdquo) Alumni networks for example can help address the problems of ldquobrain-drainrdquo and the loss of institutional knowledge by opening channels of communication between former and current employees By the same token they can open windows on innovations outside the companys usual focus creating opportunities for cross-pollination

5 The Culture of Trust

One of a corporations most important sources of value is that intangible quality called ldquoculturerdquo which can also be an agent acting both for and against change A companys culture is often seen as a function of its organization but recent research shows that it is also importantly influenced by internal ldquosocialrdquo networks that cross organization boundaries An emerging management challenge is to understand how these networks work in order to leverage their positive effects Like markets networks work based on an exchange of value But without contracts or explicit organizational structures to govern the exchanges they also depend to a greater degree on the element of trust that provides a foundation for collaboration And trust is notoriously vulnerable to bad faith Managements that want to drive value through cultural change need to understand how to cultivate trust throughout their networks This is another reason why corporate alumni networks are so interesting because membership in them is entirely voluntary they rely on and cultivate loyalty and a perception of common bonds which in turn provide a foundation for trust Loyalty too of course must be earned through an exchange of value and the value proposition of corporate alumni networks will depend on balancing the practical and tangible benefits for both alumni and the company Those tangible benefits will then strengthen the intangible relations built on loyalty and trust

WHAT EXACTLY ARE CORPORATE ALUMNI NETWORKS

Corporate alumni networks are organizations whose members are the former employees of a particular company Beyond this basic characteristic they vary widely in terms of size longevity origins purpose governance authority structure activities and even membership criteria Chris Gopsill Executive Producer at First Tuesday Zurich began his presentation of research findings on the current state of these organizations by describing three basic types

First Tuesdays benchmarking survey of 15 of the most prominent large corporations with alumni programs provides an important background on the status of these networks some of them long-standing some in development some of the hybrid kind and under evaluation All of the companies are multinationals and the respondents were based in either the United States (30) or Europe (70) including the UK Germany and Switzerland They covered several industry sectors including professional services and management consultancy information technology (IT) manufacturing travel and pharmaceuticals Due to the differences in type and status the survey could not lead to a systematic analysis but did produce many valuable highlights regarding basic operations membership benefits for the alumni and the company and critical success factors

1 Independent ldquograssrootsrdquo associations are those founded solely on the initiative of former employees without company support or approval (or disapproval) They are informal groups that provide directories of members organize occasional events and reunions and may coordinate other projects It is hard to estimate their number (there is no association of associations) but it runs into the thousands Their success is often temporary or hard to sustain

2 Company-supported grassroots associations were also founded independently but have grown sufficiently in size and stature to win recognition from the company which may also provide financial and other means of support These hybrids vary widely and are much fewer in number probably because only a few large corporations have alumni populations large enough to reach ldquocritical massrdquo Their activities are similar to those of the independent groups sometimes facilitated by web-based platforms The most notable example in this category is the association started by alumni of the US-based consumer marketing giant Procter amp Gamble

3 Company-managed associations are those founded and chartered by the company with board-level approval have explicit objectives and policies and are managed by full-time staff with executive oversight This type has existed in the professional services sector for

years in a few cases for decades but in recent years they have penetrated several industries particularly among large multinationals

Considering company-initiated alumni networks the commonly mentioned elements involved in realizing the networkrsquos purpose include (1) securing executive support (2) defining network participants (3) determining content and information to be shared and (4) creating the channel(s) by which connection with alums will be maintained (Canabou 2002 Kirsner 2002 Stewart 2003)

First gaining buy-in from company executives is vital to ensure the network initiative is supported with adequate resources and taken seriously by those both inside and outside of the organization Such executive support will encourage meaningful participation by those involved in the network through exhibiting company values towards its human resources

Second establishing who is to participate in the alumni network involves two different issues (1) deciding on network management being performed in-house or contracted out and (2) defining which ex-employees are eligible to participate Available company resources along with the anticipated size of the alumni network are defining variables as to how the network will be managed (ie in-house or outsourced) Regardless appointment of internal persons to be responsible for the design and delivery of the network or oversight of outsourced partners is necessary (Stewart 2003) Outsourcing through the use of a specialized network services firm such as Bernard C Harris Publishing Corporate Alumni and SelectMinds is one efficient method to manage onersquos network via a web-based platform (Kirsner 2002)

To determine which ex-employees to invite to participate in the alumni network several criteria are commonly used The employeersquos tenure at the company and reason(s) for departure play a significant role in determining if an invitation to the corporate alumni network should be offered (Stewart 2003) As employees vary in terms of their knowledge skills and abilities they too vary regarding their strategic importance to the firm (Lepak amp Snell 1999) Inviting only departing employees considered to be part of an organizationrsquos core workforce workers directly contributing to the competitive advantage of the organization (Delery amp Shaw 2001) would result in higher potential alumni contributions to the firm In addition the nature of the alumni base whether it is companywide or division-specific often acts as a selection criterion for network participation (Stewart)

Third to encourage participation in the network and foster symmetric ties Canabou (2002) states there must be valuable information and activities offered in order for ex-employees to remain engaged Access to an up-to-date alumni directory for the purpose of tapping new job opportunities is noted as ldquothe number one benefitrdquo of alumni networks (Canabou) In addition other meaningful resources to make available include job boards training classes job referrals management resources discussion boards alumni and company news along with cocktail parties

to facilitate further networking (Canabou 2002 Kirsner 2002 Stewart 2003) Gaining input from the alumni base is also important to ensure their interests are being met and to in turn foster continued engagement and connectedness to the organization (Canabou 2002)

Fourth the decision as to how the organization will remain connected to its former employees is an important one The use of a web-based system allows for easy and efficient management of alumni contact information and general data Alumni access through a web home page also offers practical sense in addition to contact via email e-newsletters and mail Events also represent a valuable means for maintaining connections to alumni such as alumni networking parties or corporate charity initiatives Considering the nature of the alumni base and their comfort level with technology older ex-employees may be less likely to engage on-line and may require more customized delivery such as mailings of alumni communications

With the ultimate goal of establishing an alumni network to help improve the companyrsquos business (Stewart 2003) there are benefits to be accrued to both the participating alumni and the host organization For ex-employees maintaining good-standing with former employers makes good sense Alumni network participation provides access to information sources that may prove to be rich sources for employment andor business opportunities For the sponsoring organization an alumni network can serve as a vital connection to tacit knowledge held in the minds of former employees provide access to a talent pool for rehire or contract work and serve as a source of referrals and new business partners (Canabou 2002 DeLong 2004 Kirsner 2002 Stewart 2003) Further consideration of the potential gains that may be acquired by an organization via their alumni network such as employee recruitment workforce flexibility knowledge retention and organizational culture are explored next In light of the dynamic and challenging environment facing organizations today examination of new avenues to leverage organizational resources is vital to remaining a viable competitor with above average profits

ALUMNI NETWORKS AND EMPLOYEE RECRUITMENT

Building and maintaining a strong human resource capability within an organization starts with the attraction of high quality good fit potential employees Recruitment serves as a primary means of attracting future employees along with targeting specific applicant pools and offering signing incentives (Rynes amp Barber 1990) Key to a successful recruitment strategy are the sources used by organizations to recruit potential employees (Noe et al 2006) The use of internal sources defined as filling vacancies with current employees offers several advantages including (1) the firmrsquos familiarity with internal candidates (2) the applicantrsquos knowledge of the firm and (3) the lower recruiting costs (Noe et al 2006) Recruiting from an alumni pool would be expected to generate the same advantages as promoting from within Yet additional benefits may also be accrued As former employees have gone on to gain additional knowledge skills abilities and insights by way of other experiences these potential rehires represent potentially higher octane employees able to generate performance results better and faster than a new hire without previous experience with the firm Organizational alums may also serve as valuable referral sources given their knowledge of ldquogood fitrdquo with the former employer and their interest in maintaining connections to those within that organization

In light of an organizationrsquos specific labor needs and anticipated tight labor markets organizations can benefit from maintaining a bond with former employees Stewart (2003) suggests employers could be faced with an estimated 25 annual turnover of employees as labor trends indicate workers are likely to change jobs up to eight times in their working careers according to the US Bureau of Labor Statistics Hence keeping in touch with former employees through an alumni network represents a valuable recruitment tool for organizational success

WHY DO COMPANIES MAINTAIN CORPORATE ALUMNI NETWORKS

Organizations typically build corporate alumni networks with the sole purpose of re-recruiting however investing in such a network can bring ancillary benefits as well for example an increased number of high-quality referrals from alumni in the network and new business opportunities

1048707 High-performing corporate alumni represent a valuable talent pool mdashIn a 2005 survey of 100 US organizations 54 of respondents stated that they had actively sought to rehire former employees because they bring the following benefits123

Quick time-to-productivitymdashThe onboarding period and time-to-productivity is relatively short for alumni as they are already familiar with the companyrsquos people politics and processes

Experience and insight from other organizationsmdashReturning corporate alumni often bring back new skills and competencies that can make them more effective in their roles or a new perspective that enables them to see processsystem inefficiencies in their alumni employer They may also bring information about how competitors do business

1048707 Corporate alumni are relatively cost-effective to rehire mdashPursuing corporate alumni rehires may be a cost effective supplement to using contingency search firms particularly for highly technical or specialized positions where talent is in high demand Organizations with an established corporate alumni network may not need to hire an external party for assistance with the first phase of the recruitment cycle (eg generating ldquonamesrdquo)

1048707 Corporate alumni can be a good source of candidate referrals mdashEven if they do not return as employees corporate alumni who feel connected to the organization may be more likely to refer other potential hires With their understanding of the corporate culture and certain job roles they are likely to recommend quality referrals with strong organization and job fit 4 Strategies for converting these referrals into hires include building a competitive employment value proposition (EVP) and leveraging current employees to communicate the EVP Further Council research on the importance of crafting a compelling EVP is available in our study titled Attracting and Retaining Critical Talent Segments5

1048707 Alumni provide new business opportunities mdashOrganizations such as McKinsey amp Company and Bain amp Company report that alumni often provide new business opportunities through some of the activities listed below

Purchasing goods or services from their former organization Facilitating strategic alliances between their former employer and their current

employer Referring (directly or indirectly) potential customers resources and vendors to their

former employer

BUSINESS DEVELOPMENT AS A CONTACT SPORT

ldquoBusiness development is a contact sportrdquo says Attorney Tarlow ldquoYou send your business to the last person with whom you had positive contact Whoever has the best strategy and the tools for developing and maintaining their contacts winsrdquo

ldquoIn the legal world as in other arenas contact with alumni delivers business referrals an important asset particularly in these times of slow or moderate growthrdquo Tarlow says ldquoPeople simply feel more confident hiring someone they know or someone personally recommendedrdquo

Alumni networks also help law firms track the progress of a former employeersquos career If the individual developed a specific expertise the firm requires it would have an opportunity to tap into the individualrsquos knowledge form a business alliance or perhaps lure the individual back

ldquoEmployers secure a competitive advantage when they are able to track their alumnirdquo he says In that regard Tarlow sees that a strong alumni network could help lower recruiting costs Firms that need to expand their staff with attorneys with specific skills and experience usually enlist the help of a recruiter at placement fees of 25 - or more depending on the position On an annual salary of $100000 the recruiter would get $25000 ldquoThatrsquos not insignificantrdquo Tarlow says

To understand the magnitude of the expense imagine that if a professional firm hires eight new staff members each year at a base salary of $100000 recruiter fees alone would total at least $200000

Excluding situations that require placement fees the average cost of replacing an employee is about $10000 per position according to the Employment Management Association The Society for Human Resources Management estimates the average cost of a rehire to be $5000 ndash and rehires tend to stay twice as long

On the other hand a firm can hire a former employee or candidate recommended by a former employee and save tens of thousands of dollars per hire Further studies show that new hires are 40 less productive than rehires during the first few months of employment Therefore rehiring former employees or enlisting the assistance of former employees to recruit new employees should not be ignored

Human Resource expert Arte Nathan New Products Thought Leader for Mellon HR Solutions advocates the creation of communities to build a companyrsquos success and sees alumni networks as facilitating that effort

ldquoBelonging to a corporate community makes sense for both the individual and the corporation When you facilitate people coming and going and assist your community in staying connected companies will be able to take advantage of great resources that would otherwise walk out the door and drop off the radar screenrdquo Nathan says

Nathan sees that industries experiencing growth or facing labor shortages such as healthcare would gain a competitive advantage via connections with a community of former employees However that advantage could be experienced by any organization whose success in the marketplace is a result of the quality of its workforce

ldquoThe important thing here is to build up communities of prospective employees current employees and former employees These communities can give your company a competitive edge by continuing to add value to your company in conventional -- and unconventional -- waysrdquo

Nathan points out that alumni include not just people at the start or middle of their careers but retirees Keeping in touch with this group is appropriate because most will maintain some kind of connection simply because of benefits and investment in the organization Companies that embrace a connection with their retirees will earn their loyalty and the opportunity to rely on the retiree as a source of information inspiration and knowledge Additionally the retiree may serve as a referral for new business and potential employees

In a report on ldquolost knowledgerdquo in the global chemical industry worldwide consulting firm Accenture discusses how the retirement or departure of senior scientists poses a costly and potentially devastating blow to chemical companies According to the February 2002 report these senior scientists had over the years saved their companies literally millions of dollars each because of their knowledge about certain processes that came from experience not textbooks

As these scientists retired or left the chemical company they took with them information that they had accumulated over the years

Accenture recommended that chemical companies maintain a tight relationship with their expertsndash even hiring them as consultants or retaining them on an as-needed basis -- to transfer information serve as mentors and be available as sources of knowledge and advice as needed

Research Fellow David DeLong writes ldquoIn the current economy it will be tempting for leaders to give in to the demands for short-term financial performance But savvy executives recognize that they also must champion more costly knowledge retention strategies because some of their units could be headed for a point of no return in a few yearsrdquo

The lesson could well be applied to many other knowledge-based industries

While itrsquos clear that alumni networks can play a key role in an organizationrsquos success itrsquos important to remember that not just any kind of network will do The costs of running a manual or unstructured alumni network can be high Alumni networks that automate repetitive tasks and shift the maintenance of contact information to former employees will deliver a return on your investment

The methods most companies have used to keep in touch with their alumni have until recently been primarily informal inefficient and left to individuals to create ndash rather than a company-wide initiative But as Tarlow says ldquoIf you donrsquot have the database or tools itrsquos very time-consuming Therersquos no immediate return on your investmentrdquo

Tarlow cites the act of sending a holiday card to former employees as a simple gesture that shows employees you remember them and valued their service It can have positive results as long as sending the card isnrsquot a time-consuming costly process

Automated alumni networks can also handle registration event management job postings and news publication with minimal staff intervention

ACTIVITIES CONTRIBUTING TO AN EFFECTIVE CORPORATE ALUMNI NETWORK

Organizations face three main challenges when managing their alumni hiring programs gaining the active participation of alumni in the network targeting re-recruiting efforts at the alumni segments most likely to drive quality of hire and monitoring the health of and returns from the network Listed below are a few guidelines that companies may wish to consider as they confront these challenges

Dr i v e A c t i v e Participation in the Ne t w ork

1 Highlight compelling value proposition for participation in the networkmdashOrganizations often spend a significant amount of timeresources creating their corporate alumni network but underinvest in marketing strategies to increase participation rates One method for driving interest in the initiative is to highlight the benefits of joining the network some of which include following

Access to a group that engages in social events professional training volunteering andor provides an opportunity for alumni to share information on jobs and careers as well as leads and references for business ventures

Discounts on products or services

2 Make employees aware of the corporate alumni network during the exit processmdashInternal analysis from organizations such as Ernst amp Young suggests that the vast majority of alumni return to the organization soon after their initial departure thus organizations may want to provide employees with the following information during the exit proces sign-up procedures network benefits and scope of the network (see page 3 for further details from Ernst amp Young alumnirecruiting outreach program)

Target the Al umni Segments Most Likel y to Dri ve Q uality of Hire

3 Focus on high-value corporate alumni segmentsmdashFocusing efforts on former employees who were top performers or those who demonstrated a strong commitment to the job or company helps ensure a higher quality of network members In addition some organizations extend the scope of their corporate alumni program to include those who were not permanent full-time employees such as interns or contractors The list below suggests employee segments to target for the program

Top performers who left voluntarily Individuals who occupied key positions Individuals with key skills contacts or experience Individuals leaving to pursue further education in disciplinescritical to company

operations Retirees who may wish to return to employment High-performing interns or contractors

Build a D a shboard to M easure O v e r all Program Success and Track A lumni S e gments that Generate Large Number of Qua l ity Re-hires

4 Build and monitor metrics specific to the alumni network programmdashBuilding a dashboard with program-specific qualitative and quantitative metrics helps companies to monitor the overall health of their network and also make principled decisions on where to over- or under-invest in the future (eg former high performing internscontractors may have a higher conversion rate than top performers who left voluntarily so companies would therefore host more events for this segment) A list of potential metrics is included in the table below

Table 1 Checklist of Alumni Network Metrics

Quantitative Metrics

Qualitative Metrics

9 Cost per hire of corporate alumni vs regular hires9 Time to fill for corporate alumni vs regular hires9 Number of corporate alumni entered in program database9 Number of corporate alumni hired9 Number of referrals made by corporate alumni9 Number of hires generated by corporate alumni referrals9 Retention rate for corporate alumni

9 Employee engagement levels of corporate alumni vs hires from other channels

9 Additional skills and experiences brought to the

organization as a result of rehiring corporate alumni

CASE STUDY

Alumni linked in to old firms

This is a summary of an article originally published by LM SIXEL in the Houston Chronicle on Feb 3rd 2010

Janet Roth wasnt looking for a new job But her neighbour a former colleague at Deloitte encouraged Roth to join the firms online network for former employees and retirees Roth had worked at Deloitte for seven years leaving in 1996 to join one of its clients Late one night Roth was scrolling through Deloittes alumni site and saw a job opening that sounded interesting She applied went through a streamlined interview process and rejoined Deloitte in 2007 She joined the network mostly for social reasons ldquobut I ended up with a jobrdquo said Roth who is now senior manager in the mergers and acquisitions group in Houston It used to be that when you walked out the door that was it The working relationship was over once you turned in your ID badge and collected your last paycheck

But many companies are reconsidering that strategy After all skilled employees arent that easy to find especially ones who know the corporate culture So companies have taken a page from social sites and launched their own alumni networks The online sites which typically are controlled by individual companies like Deloitte are a way for ex-employees to connect with their former bosses and former co-workers mdash and maybe boomerang back often with newly acquired skills

New skills

Its efficient said Cathy Clonts president of Alumni Web Services which designs alumni networks for corporate clients Members update their contact information and any new skills they acquire Companies in turn can data-mine to find the skills theyre looking for

Its also a way a company can promote its own brand to a group that is already loyal Clonts said Deloitte likes to refer to the members of its AlumNet as ldquocolleagues for liferdquo said Coleman Rowland a partner in energy and resource practices in Houston He said Deloittes alumni network has become such an important business imperative that the firm has seven regional alumni network coordinators around the nation who keep up with the entries Of the 100000 alumni nationwide who left the firm in good standing and are eligible to join Deloittes network 56000 have registered Of those 4000 are in Houston

No more ledgers

In the past the firm kept up with its former employees by updating addresses in ledgers and spreadsheets But that wasnt easy especially when people move so frequently Roth for example moved from Houston to Minnesota to Florida and back to Houston in a series of corporate transfers ldquoDeloitte lost track of me raising three kidsrdquo she said with a laugh It took

running into Rowland who mentioned the network for Roth to reconnect with her old firm Clients and other ldquofriends of the firmrdquo cant get onto the network to troll for possible job candidates but the firm does list its job openings as a courtesy Thats how one of its clients a non-profit found its controller Rowland said And it didnt have to pay any recruiting fees

The Deloitte network which is more LinkedIn than Facebook isnt set up as a chat site or a place to extol the pleasures of retirement Members however can send e-mails to each other through the Deloitte server ldquoIts a way to really expand your networkrdquo Roth said

CONCLUSION

A company alumni network is made to remain in contact and maintain relationships with former employees This offers organizations a new resource for enhancing organizational capabilities Though making formal corporate alumni networks has recently become very important they have been loosely formed and utilized since as long as there have been companies and employees who leave them ndash by letter mailings volunteer groups gatherings etc

Adding to this social networking is redefining the way we interact with colleagues corporate alumni and business partners Forward-thinking employers recognize that investing in life-long relationships through comprehensive alumni programs carries measurable value in recruitment employment branding and new business development

Companies have realised that alumni provide an inside track to new business opportunities It can also be highlighted that alumni who are re-hired stay longer and cost less to onboard than talent new to the organization Also Alumni provide great referrals and are excellent often proactive ambassadors for the company brand

In short these networks are very beneficial to the companies as well as the alumnis due to which its becoming more popular and very important Few companies that have seen the trend and adapted to it are ndash Deloitte Ernst amp Young McKinsey amp Company and Bain amp Company

Thus Alumni networks are seen as

- A key potential driver of competitive advantage for employers- A rich untapped source of innovation human talent and business relationships- Still emergent (in most sectors) and hence demanding clear management focus

AKNOWLEDGEMENT

We would like to thank Ms Yesha Sheth for giving us this topic We would also like to thank her for her guidance and support throughout the project

BIBLIOGRAPHY

wwwselectmindscom

wwwclcexecutiveboardcom

wwwxingcom

wwwfirsttuesdaych

wwwwikipediacom

wwwencyclopediacom

WHY NOW TRENDS AND DRIVERS

Corporate alumni networks are now well-positioned to develop and diversify beyond theUniversity models by creating innovative ldquovirtuous circlesrdquo of mutual benefit for the company and its employees The possibilities have been explored by a relatively small number of pioneering companies primarily in the professional services sectors In recent years a significant and growing number of corporations have launched concerted efforts to cultivate their alumni relationships in purposively managed organizations In answer to the question ldquoWhy Nowrdquo it is necessary to explore the trends and drivers behind this sea change in corporate culture which may be reaching a tipping point The key factors can be grouped under five subject areas information technology the business environment the work environment competitive advantage and the culture of trust

1 Information Technology

The basic underlying or enabling factor in the rise of interest in alumni networks has been the revolution in IT most importantly the ubiquitous penetration of low-cost and increasingly robust communications networks what has been described as ldquothe death of distancerdquo Alumni almost by definition constitute a widely dispersed population who no longer come to the office attend meetings and work on common projects It has always been possible to reach out to alumni but the degree of difficulty has been lowered by orders of magnitude Networks are the norm and have created an increasingly small world that becomes denser and denser as the webs connecting its locations proliferate They have also led to new forms of social behaviour The explosion of social networking on the Internet (MySpace Bebo Facebook etribes) has captured headlines and attracted billions of dollars from media companies and is now moving into a phase of intense competitive segmentation These ldquocommunitiesrdquo are relatively open and unstructured free-for-alls But they represent a major trend that has important implications for traditional business corporations A number of web service providers now provide more structured communities either for mature professionals as individuals or as third-party platforms customized for the programs of specific corporations

2 Business Environment

Globalization has been as pervasive as communications technology for the two go hand-in-hand and has lowered barriers of all kinds ndash regulatory economic national and even corporate More open markets for products and services have brought with them more open markets for labour and talent outsourcing is just one example Intense competition for human resources has caused leading companies to reconsider how they manage their workforce and the shifting pool of talent available to them

In the past fearing the loss of valued resources many companies have adopted defensive ldquofortressrdquo strategies that discouraged communications with alumni but in a war for talent amid scarcity these policies can be self-defeating Attitudes are changing and more companies realize that using networks to extend market reach can bring access to a larger talent pool

3 Work Environment

The traditional workplace too is being transformed by both the disruptive and creative effects of globalization IT and the competition for talent From an employee perspective job security is more vulnerable to restructuring downsizing and outsourcing From a company perspective employees are more mobile and more transient leading to higher turnover rates which increase the costs of recruitment At the same time more dynamic job markets are creating opportunities for innovation on both sides of the equation The traditional paradigm of ldquoemployment for liferdquo is no longer the norm in its place we find greater emphasis on the idea of the ldquolifecycle of employmentrdquo Under the impact of changing lifestyles many employees are developing alternative models for managing their careers balancing their terms of engagement with personal commitments at different stages Increasingly the ldquobest and brightestrdquo view their professional experience as a portfolio of relationships that can be renewed as opportunities emerge Faced with changing demographics such as the aging of the workforce and the need for diversity employers are adopting flexible approaches to managing the flow of talent through their organizations From both perspectives corporate alumni networks are a compelling means of negotiating the new dynamics of job markets

4 Competitive Advantage

In many respects the trends we have looked at have levelled the playing field for all players in any given market With ready access to many of the resources that previously were difficult to tap small and virtual companies can compete with the large and established companies Equal access to resources however has placed a higher premium on what one can actually do with them As a consequence many authorities argue that in the future the essential sources of competitive advantage will be knowledge and innovation Here too networks will play a crucial role by crossing internal and external barriers to the flow of ideas competencies and intelligence (in the sense of ldquonews about the latest developmentsrdquo) Alumni networks for example can help address the problems of ldquobrain-drainrdquo and the loss of institutional knowledge by opening channels of communication between former and current employees By the same token they can open windows on innovations outside the companys usual focus creating opportunities for cross-pollination

5 The Culture of Trust

One of a corporations most important sources of value is that intangible quality called ldquoculturerdquo which can also be an agent acting both for and against change A companys culture is often seen as a function of its organization but recent research shows that it is also importantly influenced by internal ldquosocialrdquo networks that cross organization boundaries An emerging management challenge is to understand how these networks work in order to leverage their positive effects Like markets networks work based on an exchange of value But without contracts or explicit organizational structures to govern the exchanges they also depend to a greater degree on the element of trust that provides a foundation for collaboration And trust is notoriously vulnerable to bad faith Managements that want to drive value through cultural change need to understand how to cultivate trust throughout their networks This is another reason why corporate alumni networks are so interesting because membership in them is entirely voluntary they rely on and cultivate loyalty and a perception of common bonds which in turn provide a foundation for trust Loyalty too of course must be earned through an exchange of value and the value proposition of corporate alumni networks will depend on balancing the practical and tangible benefits for both alumni and the company Those tangible benefits will then strengthen the intangible relations built on loyalty and trust

WHAT EXACTLY ARE CORPORATE ALUMNI NETWORKS

Corporate alumni networks are organizations whose members are the former employees of a particular company Beyond this basic characteristic they vary widely in terms of size longevity origins purpose governance authority structure activities and even membership criteria Chris Gopsill Executive Producer at First Tuesday Zurich began his presentation of research findings on the current state of these organizations by describing three basic types

First Tuesdays benchmarking survey of 15 of the most prominent large corporations with alumni programs provides an important background on the status of these networks some of them long-standing some in development some of the hybrid kind and under evaluation All of the companies are multinationals and the respondents were based in either the United States (30) or Europe (70) including the UK Germany and Switzerland They covered several industry sectors including professional services and management consultancy information technology (IT) manufacturing travel and pharmaceuticals Due to the differences in type and status the survey could not lead to a systematic analysis but did produce many valuable highlights regarding basic operations membership benefits for the alumni and the company and critical success factors

1 Independent ldquograssrootsrdquo associations are those founded solely on the initiative of former employees without company support or approval (or disapproval) They are informal groups that provide directories of members organize occasional events and reunions and may coordinate other projects It is hard to estimate their number (there is no association of associations) but it runs into the thousands Their success is often temporary or hard to sustain

2 Company-supported grassroots associations were also founded independently but have grown sufficiently in size and stature to win recognition from the company which may also provide financial and other means of support These hybrids vary widely and are much fewer in number probably because only a few large corporations have alumni populations large enough to reach ldquocritical massrdquo Their activities are similar to those of the independent groups sometimes facilitated by web-based platforms The most notable example in this category is the association started by alumni of the US-based consumer marketing giant Procter amp Gamble

3 Company-managed associations are those founded and chartered by the company with board-level approval have explicit objectives and policies and are managed by full-time staff with executive oversight This type has existed in the professional services sector for

years in a few cases for decades but in recent years they have penetrated several industries particularly among large multinationals

Considering company-initiated alumni networks the commonly mentioned elements involved in realizing the networkrsquos purpose include (1) securing executive support (2) defining network participants (3) determining content and information to be shared and (4) creating the channel(s) by which connection with alums will be maintained (Canabou 2002 Kirsner 2002 Stewart 2003)

First gaining buy-in from company executives is vital to ensure the network initiative is supported with adequate resources and taken seriously by those both inside and outside of the organization Such executive support will encourage meaningful participation by those involved in the network through exhibiting company values towards its human resources

Second establishing who is to participate in the alumni network involves two different issues (1) deciding on network management being performed in-house or contracted out and (2) defining which ex-employees are eligible to participate Available company resources along with the anticipated size of the alumni network are defining variables as to how the network will be managed (ie in-house or outsourced) Regardless appointment of internal persons to be responsible for the design and delivery of the network or oversight of outsourced partners is necessary (Stewart 2003) Outsourcing through the use of a specialized network services firm such as Bernard C Harris Publishing Corporate Alumni and SelectMinds is one efficient method to manage onersquos network via a web-based platform (Kirsner 2002)

To determine which ex-employees to invite to participate in the alumni network several criteria are commonly used The employeersquos tenure at the company and reason(s) for departure play a significant role in determining if an invitation to the corporate alumni network should be offered (Stewart 2003) As employees vary in terms of their knowledge skills and abilities they too vary regarding their strategic importance to the firm (Lepak amp Snell 1999) Inviting only departing employees considered to be part of an organizationrsquos core workforce workers directly contributing to the competitive advantage of the organization (Delery amp Shaw 2001) would result in higher potential alumni contributions to the firm In addition the nature of the alumni base whether it is companywide or division-specific often acts as a selection criterion for network participation (Stewart)

Third to encourage participation in the network and foster symmetric ties Canabou (2002) states there must be valuable information and activities offered in order for ex-employees to remain engaged Access to an up-to-date alumni directory for the purpose of tapping new job opportunities is noted as ldquothe number one benefitrdquo of alumni networks (Canabou) In addition other meaningful resources to make available include job boards training classes job referrals management resources discussion boards alumni and company news along with cocktail parties

to facilitate further networking (Canabou 2002 Kirsner 2002 Stewart 2003) Gaining input from the alumni base is also important to ensure their interests are being met and to in turn foster continued engagement and connectedness to the organization (Canabou 2002)

Fourth the decision as to how the organization will remain connected to its former employees is an important one The use of a web-based system allows for easy and efficient management of alumni contact information and general data Alumni access through a web home page also offers practical sense in addition to contact via email e-newsletters and mail Events also represent a valuable means for maintaining connections to alumni such as alumni networking parties or corporate charity initiatives Considering the nature of the alumni base and their comfort level with technology older ex-employees may be less likely to engage on-line and may require more customized delivery such as mailings of alumni communications

With the ultimate goal of establishing an alumni network to help improve the companyrsquos business (Stewart 2003) there are benefits to be accrued to both the participating alumni and the host organization For ex-employees maintaining good-standing with former employers makes good sense Alumni network participation provides access to information sources that may prove to be rich sources for employment andor business opportunities For the sponsoring organization an alumni network can serve as a vital connection to tacit knowledge held in the minds of former employees provide access to a talent pool for rehire or contract work and serve as a source of referrals and new business partners (Canabou 2002 DeLong 2004 Kirsner 2002 Stewart 2003) Further consideration of the potential gains that may be acquired by an organization via their alumni network such as employee recruitment workforce flexibility knowledge retention and organizational culture are explored next In light of the dynamic and challenging environment facing organizations today examination of new avenues to leverage organizational resources is vital to remaining a viable competitor with above average profits

ALUMNI NETWORKS AND EMPLOYEE RECRUITMENT

Building and maintaining a strong human resource capability within an organization starts with the attraction of high quality good fit potential employees Recruitment serves as a primary means of attracting future employees along with targeting specific applicant pools and offering signing incentives (Rynes amp Barber 1990) Key to a successful recruitment strategy are the sources used by organizations to recruit potential employees (Noe et al 2006) The use of internal sources defined as filling vacancies with current employees offers several advantages including (1) the firmrsquos familiarity with internal candidates (2) the applicantrsquos knowledge of the firm and (3) the lower recruiting costs (Noe et al 2006) Recruiting from an alumni pool would be expected to generate the same advantages as promoting from within Yet additional benefits may also be accrued As former employees have gone on to gain additional knowledge skills abilities and insights by way of other experiences these potential rehires represent potentially higher octane employees able to generate performance results better and faster than a new hire without previous experience with the firm Organizational alums may also serve as valuable referral sources given their knowledge of ldquogood fitrdquo with the former employer and their interest in maintaining connections to those within that organization

In light of an organizationrsquos specific labor needs and anticipated tight labor markets organizations can benefit from maintaining a bond with former employees Stewart (2003) suggests employers could be faced with an estimated 25 annual turnover of employees as labor trends indicate workers are likely to change jobs up to eight times in their working careers according to the US Bureau of Labor Statistics Hence keeping in touch with former employees through an alumni network represents a valuable recruitment tool for organizational success

WHY DO COMPANIES MAINTAIN CORPORATE ALUMNI NETWORKS

Organizations typically build corporate alumni networks with the sole purpose of re-recruiting however investing in such a network can bring ancillary benefits as well for example an increased number of high-quality referrals from alumni in the network and new business opportunities

1048707 High-performing corporate alumni represent a valuable talent pool mdashIn a 2005 survey of 100 US organizations 54 of respondents stated that they had actively sought to rehire former employees because they bring the following benefits123

Quick time-to-productivitymdashThe onboarding period and time-to-productivity is relatively short for alumni as they are already familiar with the companyrsquos people politics and processes

Experience and insight from other organizationsmdashReturning corporate alumni often bring back new skills and competencies that can make them more effective in their roles or a new perspective that enables them to see processsystem inefficiencies in their alumni employer They may also bring information about how competitors do business

1048707 Corporate alumni are relatively cost-effective to rehire mdashPursuing corporate alumni rehires may be a cost effective supplement to using contingency search firms particularly for highly technical or specialized positions where talent is in high demand Organizations with an established corporate alumni network may not need to hire an external party for assistance with the first phase of the recruitment cycle (eg generating ldquonamesrdquo)

1048707 Corporate alumni can be a good source of candidate referrals mdashEven if they do not return as employees corporate alumni who feel connected to the organization may be more likely to refer other potential hires With their understanding of the corporate culture and certain job roles they are likely to recommend quality referrals with strong organization and job fit 4 Strategies for converting these referrals into hires include building a competitive employment value proposition (EVP) and leveraging current employees to communicate the EVP Further Council research on the importance of crafting a compelling EVP is available in our study titled Attracting and Retaining Critical Talent Segments5

1048707 Alumni provide new business opportunities mdashOrganizations such as McKinsey amp Company and Bain amp Company report that alumni often provide new business opportunities through some of the activities listed below

Purchasing goods or services from their former organization Facilitating strategic alliances between their former employer and their current

employer Referring (directly or indirectly) potential customers resources and vendors to their

former employer

BUSINESS DEVELOPMENT AS A CONTACT SPORT

ldquoBusiness development is a contact sportrdquo says Attorney Tarlow ldquoYou send your business to the last person with whom you had positive contact Whoever has the best strategy and the tools for developing and maintaining their contacts winsrdquo

ldquoIn the legal world as in other arenas contact with alumni delivers business referrals an important asset particularly in these times of slow or moderate growthrdquo Tarlow says ldquoPeople simply feel more confident hiring someone they know or someone personally recommendedrdquo

Alumni networks also help law firms track the progress of a former employeersquos career If the individual developed a specific expertise the firm requires it would have an opportunity to tap into the individualrsquos knowledge form a business alliance or perhaps lure the individual back

ldquoEmployers secure a competitive advantage when they are able to track their alumnirdquo he says In that regard Tarlow sees that a strong alumni network could help lower recruiting costs Firms that need to expand their staff with attorneys with specific skills and experience usually enlist the help of a recruiter at placement fees of 25 - or more depending on the position On an annual salary of $100000 the recruiter would get $25000 ldquoThatrsquos not insignificantrdquo Tarlow says

To understand the magnitude of the expense imagine that if a professional firm hires eight new staff members each year at a base salary of $100000 recruiter fees alone would total at least $200000

Excluding situations that require placement fees the average cost of replacing an employee is about $10000 per position according to the Employment Management Association The Society for Human Resources Management estimates the average cost of a rehire to be $5000 ndash and rehires tend to stay twice as long

On the other hand a firm can hire a former employee or candidate recommended by a former employee and save tens of thousands of dollars per hire Further studies show that new hires are 40 less productive than rehires during the first few months of employment Therefore rehiring former employees or enlisting the assistance of former employees to recruit new employees should not be ignored

Human Resource expert Arte Nathan New Products Thought Leader for Mellon HR Solutions advocates the creation of communities to build a companyrsquos success and sees alumni networks as facilitating that effort

ldquoBelonging to a corporate community makes sense for both the individual and the corporation When you facilitate people coming and going and assist your community in staying connected companies will be able to take advantage of great resources that would otherwise walk out the door and drop off the radar screenrdquo Nathan says

Nathan sees that industries experiencing growth or facing labor shortages such as healthcare would gain a competitive advantage via connections with a community of former employees However that advantage could be experienced by any organization whose success in the marketplace is a result of the quality of its workforce

ldquoThe important thing here is to build up communities of prospective employees current employees and former employees These communities can give your company a competitive edge by continuing to add value to your company in conventional -- and unconventional -- waysrdquo

Nathan points out that alumni include not just people at the start or middle of their careers but retirees Keeping in touch with this group is appropriate because most will maintain some kind of connection simply because of benefits and investment in the organization Companies that embrace a connection with their retirees will earn their loyalty and the opportunity to rely on the retiree as a source of information inspiration and knowledge Additionally the retiree may serve as a referral for new business and potential employees

In a report on ldquolost knowledgerdquo in the global chemical industry worldwide consulting firm Accenture discusses how the retirement or departure of senior scientists poses a costly and potentially devastating blow to chemical companies According to the February 2002 report these senior scientists had over the years saved their companies literally millions of dollars each because of their knowledge about certain processes that came from experience not textbooks

As these scientists retired or left the chemical company they took with them information that they had accumulated over the years

Accenture recommended that chemical companies maintain a tight relationship with their expertsndash even hiring them as consultants or retaining them on an as-needed basis -- to transfer information serve as mentors and be available as sources of knowledge and advice as needed

Research Fellow David DeLong writes ldquoIn the current economy it will be tempting for leaders to give in to the demands for short-term financial performance But savvy executives recognize that they also must champion more costly knowledge retention strategies because some of their units could be headed for a point of no return in a few yearsrdquo

The lesson could well be applied to many other knowledge-based industries

While itrsquos clear that alumni networks can play a key role in an organizationrsquos success itrsquos important to remember that not just any kind of network will do The costs of running a manual or unstructured alumni network can be high Alumni networks that automate repetitive tasks and shift the maintenance of contact information to former employees will deliver a return on your investment

The methods most companies have used to keep in touch with their alumni have until recently been primarily informal inefficient and left to individuals to create ndash rather than a company-wide initiative But as Tarlow says ldquoIf you donrsquot have the database or tools itrsquos very time-consuming Therersquos no immediate return on your investmentrdquo

Tarlow cites the act of sending a holiday card to former employees as a simple gesture that shows employees you remember them and valued their service It can have positive results as long as sending the card isnrsquot a time-consuming costly process

Automated alumni networks can also handle registration event management job postings and news publication with minimal staff intervention

ACTIVITIES CONTRIBUTING TO AN EFFECTIVE CORPORATE ALUMNI NETWORK

Organizations face three main challenges when managing their alumni hiring programs gaining the active participation of alumni in the network targeting re-recruiting efforts at the alumni segments most likely to drive quality of hire and monitoring the health of and returns from the network Listed below are a few guidelines that companies may wish to consider as they confront these challenges

Dr i v e A c t i v e Participation in the Ne t w ork

1 Highlight compelling value proposition for participation in the networkmdashOrganizations often spend a significant amount of timeresources creating their corporate alumni network but underinvest in marketing strategies to increase participation rates One method for driving interest in the initiative is to highlight the benefits of joining the network some of which include following

Access to a group that engages in social events professional training volunteering andor provides an opportunity for alumni to share information on jobs and careers as well as leads and references for business ventures

Discounts on products or services

2 Make employees aware of the corporate alumni network during the exit processmdashInternal analysis from organizations such as Ernst amp Young suggests that the vast majority of alumni return to the organization soon after their initial departure thus organizations may want to provide employees with the following information during the exit proces sign-up procedures network benefits and scope of the network (see page 3 for further details from Ernst amp Young alumnirecruiting outreach program)

Target the Al umni Segments Most Likel y to Dri ve Q uality of Hire

3 Focus on high-value corporate alumni segmentsmdashFocusing efforts on former employees who were top performers or those who demonstrated a strong commitment to the job or company helps ensure a higher quality of network members In addition some organizations extend the scope of their corporate alumni program to include those who were not permanent full-time employees such as interns or contractors The list below suggests employee segments to target for the program

Top performers who left voluntarily Individuals who occupied key positions Individuals with key skills contacts or experience Individuals leaving to pursue further education in disciplinescritical to company

operations Retirees who may wish to return to employment High-performing interns or contractors

Build a D a shboard to M easure O v e r all Program Success and Track A lumni S e gments that Generate Large Number of Qua l ity Re-hires

4 Build and monitor metrics specific to the alumni network programmdashBuilding a dashboard with program-specific qualitative and quantitative metrics helps companies to monitor the overall health of their network and also make principled decisions on where to over- or under-invest in the future (eg former high performing internscontractors may have a higher conversion rate than top performers who left voluntarily so companies would therefore host more events for this segment) A list of potential metrics is included in the table below

Table 1 Checklist of Alumni Network Metrics

Quantitative Metrics

Qualitative Metrics

9 Cost per hire of corporate alumni vs regular hires9 Time to fill for corporate alumni vs regular hires9 Number of corporate alumni entered in program database9 Number of corporate alumni hired9 Number of referrals made by corporate alumni9 Number of hires generated by corporate alumni referrals9 Retention rate for corporate alumni

9 Employee engagement levels of corporate alumni vs hires from other channels

9 Additional skills and experiences brought to the

organization as a result of rehiring corporate alumni

CASE STUDY

Alumni linked in to old firms

This is a summary of an article originally published by LM SIXEL in the Houston Chronicle on Feb 3rd 2010

Janet Roth wasnt looking for a new job But her neighbour a former colleague at Deloitte encouraged Roth to join the firms online network for former employees and retirees Roth had worked at Deloitte for seven years leaving in 1996 to join one of its clients Late one night Roth was scrolling through Deloittes alumni site and saw a job opening that sounded interesting She applied went through a streamlined interview process and rejoined Deloitte in 2007 She joined the network mostly for social reasons ldquobut I ended up with a jobrdquo said Roth who is now senior manager in the mergers and acquisitions group in Houston It used to be that when you walked out the door that was it The working relationship was over once you turned in your ID badge and collected your last paycheck

But many companies are reconsidering that strategy After all skilled employees arent that easy to find especially ones who know the corporate culture So companies have taken a page from social sites and launched their own alumni networks The online sites which typically are controlled by individual companies like Deloitte are a way for ex-employees to connect with their former bosses and former co-workers mdash and maybe boomerang back often with newly acquired skills

New skills

Its efficient said Cathy Clonts president of Alumni Web Services which designs alumni networks for corporate clients Members update their contact information and any new skills they acquire Companies in turn can data-mine to find the skills theyre looking for

Its also a way a company can promote its own brand to a group that is already loyal Clonts said Deloitte likes to refer to the members of its AlumNet as ldquocolleagues for liferdquo said Coleman Rowland a partner in energy and resource practices in Houston He said Deloittes alumni network has become such an important business imperative that the firm has seven regional alumni network coordinators around the nation who keep up with the entries Of the 100000 alumni nationwide who left the firm in good standing and are eligible to join Deloittes network 56000 have registered Of those 4000 are in Houston

No more ledgers

In the past the firm kept up with its former employees by updating addresses in ledgers and spreadsheets But that wasnt easy especially when people move so frequently Roth for example moved from Houston to Minnesota to Florida and back to Houston in a series of corporate transfers ldquoDeloitte lost track of me raising three kidsrdquo she said with a laugh It took

running into Rowland who mentioned the network for Roth to reconnect with her old firm Clients and other ldquofriends of the firmrdquo cant get onto the network to troll for possible job candidates but the firm does list its job openings as a courtesy Thats how one of its clients a non-profit found its controller Rowland said And it didnt have to pay any recruiting fees

The Deloitte network which is more LinkedIn than Facebook isnt set up as a chat site or a place to extol the pleasures of retirement Members however can send e-mails to each other through the Deloitte server ldquoIts a way to really expand your networkrdquo Roth said

CONCLUSION

A company alumni network is made to remain in contact and maintain relationships with former employees This offers organizations a new resource for enhancing organizational capabilities Though making formal corporate alumni networks has recently become very important they have been loosely formed and utilized since as long as there have been companies and employees who leave them ndash by letter mailings volunteer groups gatherings etc

Adding to this social networking is redefining the way we interact with colleagues corporate alumni and business partners Forward-thinking employers recognize that investing in life-long relationships through comprehensive alumni programs carries measurable value in recruitment employment branding and new business development

Companies have realised that alumni provide an inside track to new business opportunities It can also be highlighted that alumni who are re-hired stay longer and cost less to onboard than talent new to the organization Also Alumni provide great referrals and are excellent often proactive ambassadors for the company brand

In short these networks are very beneficial to the companies as well as the alumnis due to which its becoming more popular and very important Few companies that have seen the trend and adapted to it are ndash Deloitte Ernst amp Young McKinsey amp Company and Bain amp Company

Thus Alumni networks are seen as

- A key potential driver of competitive advantage for employers- A rich untapped source of innovation human talent and business relationships- Still emergent (in most sectors) and hence demanding clear management focus

AKNOWLEDGEMENT

We would like to thank Ms Yesha Sheth for giving us this topic We would also like to thank her for her guidance and support throughout the project

BIBLIOGRAPHY

wwwselectmindscom

wwwclcexecutiveboardcom

wwwxingcom

wwwfirsttuesdaych

wwwwikipediacom

wwwencyclopediacom

In the past fearing the loss of valued resources many companies have adopted defensive ldquofortressrdquo strategies that discouraged communications with alumni but in a war for talent amid scarcity these policies can be self-defeating Attitudes are changing and more companies realize that using networks to extend market reach can bring access to a larger talent pool

3 Work Environment

The traditional workplace too is being transformed by both the disruptive and creative effects of globalization IT and the competition for talent From an employee perspective job security is more vulnerable to restructuring downsizing and outsourcing From a company perspective employees are more mobile and more transient leading to higher turnover rates which increase the costs of recruitment At the same time more dynamic job markets are creating opportunities for innovation on both sides of the equation The traditional paradigm of ldquoemployment for liferdquo is no longer the norm in its place we find greater emphasis on the idea of the ldquolifecycle of employmentrdquo Under the impact of changing lifestyles many employees are developing alternative models for managing their careers balancing their terms of engagement with personal commitments at different stages Increasingly the ldquobest and brightestrdquo view their professional experience as a portfolio of relationships that can be renewed as opportunities emerge Faced with changing demographics such as the aging of the workforce and the need for diversity employers are adopting flexible approaches to managing the flow of talent through their organizations From both perspectives corporate alumni networks are a compelling means of negotiating the new dynamics of job markets

4 Competitive Advantage

In many respects the trends we have looked at have levelled the playing field for all players in any given market With ready access to many of the resources that previously were difficult to tap small and virtual companies can compete with the large and established companies Equal access to resources however has placed a higher premium on what one can actually do with them As a consequence many authorities argue that in the future the essential sources of competitive advantage will be knowledge and innovation Here too networks will play a crucial role by crossing internal and external barriers to the flow of ideas competencies and intelligence (in the sense of ldquonews about the latest developmentsrdquo) Alumni networks for example can help address the problems of ldquobrain-drainrdquo and the loss of institutional knowledge by opening channels of communication between former and current employees By the same token they can open windows on innovations outside the companys usual focus creating opportunities for cross-pollination

5 The Culture of Trust

One of a corporations most important sources of value is that intangible quality called ldquoculturerdquo which can also be an agent acting both for and against change A companys culture is often seen as a function of its organization but recent research shows that it is also importantly influenced by internal ldquosocialrdquo networks that cross organization boundaries An emerging management challenge is to understand how these networks work in order to leverage their positive effects Like markets networks work based on an exchange of value But without contracts or explicit organizational structures to govern the exchanges they also depend to a greater degree on the element of trust that provides a foundation for collaboration And trust is notoriously vulnerable to bad faith Managements that want to drive value through cultural change need to understand how to cultivate trust throughout their networks This is another reason why corporate alumni networks are so interesting because membership in them is entirely voluntary they rely on and cultivate loyalty and a perception of common bonds which in turn provide a foundation for trust Loyalty too of course must be earned through an exchange of value and the value proposition of corporate alumni networks will depend on balancing the practical and tangible benefits for both alumni and the company Those tangible benefits will then strengthen the intangible relations built on loyalty and trust

WHAT EXACTLY ARE CORPORATE ALUMNI NETWORKS

Corporate alumni networks are organizations whose members are the former employees of a particular company Beyond this basic characteristic they vary widely in terms of size longevity origins purpose governance authority structure activities and even membership criteria Chris Gopsill Executive Producer at First Tuesday Zurich began his presentation of research findings on the current state of these organizations by describing three basic types

First Tuesdays benchmarking survey of 15 of the most prominent large corporations with alumni programs provides an important background on the status of these networks some of them long-standing some in development some of the hybrid kind and under evaluation All of the companies are multinationals and the respondents were based in either the United States (30) or Europe (70) including the UK Germany and Switzerland They covered several industry sectors including professional services and management consultancy information technology (IT) manufacturing travel and pharmaceuticals Due to the differences in type and status the survey could not lead to a systematic analysis but did produce many valuable highlights regarding basic operations membership benefits for the alumni and the company and critical success factors

1 Independent ldquograssrootsrdquo associations are those founded solely on the initiative of former employees without company support or approval (or disapproval) They are informal groups that provide directories of members organize occasional events and reunions and may coordinate other projects It is hard to estimate their number (there is no association of associations) but it runs into the thousands Their success is often temporary or hard to sustain

2 Company-supported grassroots associations were also founded independently but have grown sufficiently in size and stature to win recognition from the company which may also provide financial and other means of support These hybrids vary widely and are much fewer in number probably because only a few large corporations have alumni populations large enough to reach ldquocritical massrdquo Their activities are similar to those of the independent groups sometimes facilitated by web-based platforms The most notable example in this category is the association started by alumni of the US-based consumer marketing giant Procter amp Gamble

3 Company-managed associations are those founded and chartered by the company with board-level approval have explicit objectives and policies and are managed by full-time staff with executive oversight This type has existed in the professional services sector for

years in a few cases for decades but in recent years they have penetrated several industries particularly among large multinationals

Considering company-initiated alumni networks the commonly mentioned elements involved in realizing the networkrsquos purpose include (1) securing executive support (2) defining network participants (3) determining content and information to be shared and (4) creating the channel(s) by which connection with alums will be maintained (Canabou 2002 Kirsner 2002 Stewart 2003)

First gaining buy-in from company executives is vital to ensure the network initiative is supported with adequate resources and taken seriously by those both inside and outside of the organization Such executive support will encourage meaningful participation by those involved in the network through exhibiting company values towards its human resources

Second establishing who is to participate in the alumni network involves two different issues (1) deciding on network management being performed in-house or contracted out and (2) defining which ex-employees are eligible to participate Available company resources along with the anticipated size of the alumni network are defining variables as to how the network will be managed (ie in-house or outsourced) Regardless appointment of internal persons to be responsible for the design and delivery of the network or oversight of outsourced partners is necessary (Stewart 2003) Outsourcing through the use of a specialized network services firm such as Bernard C Harris Publishing Corporate Alumni and SelectMinds is one efficient method to manage onersquos network via a web-based platform (Kirsner 2002)

To determine which ex-employees to invite to participate in the alumni network several criteria are commonly used The employeersquos tenure at the company and reason(s) for departure play a significant role in determining if an invitation to the corporate alumni network should be offered (Stewart 2003) As employees vary in terms of their knowledge skills and abilities they too vary regarding their strategic importance to the firm (Lepak amp Snell 1999) Inviting only departing employees considered to be part of an organizationrsquos core workforce workers directly contributing to the competitive advantage of the organization (Delery amp Shaw 2001) would result in higher potential alumni contributions to the firm In addition the nature of the alumni base whether it is companywide or division-specific often acts as a selection criterion for network participation (Stewart)

Third to encourage participation in the network and foster symmetric ties Canabou (2002) states there must be valuable information and activities offered in order for ex-employees to remain engaged Access to an up-to-date alumni directory for the purpose of tapping new job opportunities is noted as ldquothe number one benefitrdquo of alumni networks (Canabou) In addition other meaningful resources to make available include job boards training classes job referrals management resources discussion boards alumni and company news along with cocktail parties

to facilitate further networking (Canabou 2002 Kirsner 2002 Stewart 2003) Gaining input from the alumni base is also important to ensure their interests are being met and to in turn foster continued engagement and connectedness to the organization (Canabou 2002)

Fourth the decision as to how the organization will remain connected to its former employees is an important one The use of a web-based system allows for easy and efficient management of alumni contact information and general data Alumni access through a web home page also offers practical sense in addition to contact via email e-newsletters and mail Events also represent a valuable means for maintaining connections to alumni such as alumni networking parties or corporate charity initiatives Considering the nature of the alumni base and their comfort level with technology older ex-employees may be less likely to engage on-line and may require more customized delivery such as mailings of alumni communications

With the ultimate goal of establishing an alumni network to help improve the companyrsquos business (Stewart 2003) there are benefits to be accrued to both the participating alumni and the host organization For ex-employees maintaining good-standing with former employers makes good sense Alumni network participation provides access to information sources that may prove to be rich sources for employment andor business opportunities For the sponsoring organization an alumni network can serve as a vital connection to tacit knowledge held in the minds of former employees provide access to a talent pool for rehire or contract work and serve as a source of referrals and new business partners (Canabou 2002 DeLong 2004 Kirsner 2002 Stewart 2003) Further consideration of the potential gains that may be acquired by an organization via their alumni network such as employee recruitment workforce flexibility knowledge retention and organizational culture are explored next In light of the dynamic and challenging environment facing organizations today examination of new avenues to leverage organizational resources is vital to remaining a viable competitor with above average profits

ALUMNI NETWORKS AND EMPLOYEE RECRUITMENT

Building and maintaining a strong human resource capability within an organization starts with the attraction of high quality good fit potential employees Recruitment serves as a primary means of attracting future employees along with targeting specific applicant pools and offering signing incentives (Rynes amp Barber 1990) Key to a successful recruitment strategy are the sources used by organizations to recruit potential employees (Noe et al 2006) The use of internal sources defined as filling vacancies with current employees offers several advantages including (1) the firmrsquos familiarity with internal candidates (2) the applicantrsquos knowledge of the firm and (3) the lower recruiting costs (Noe et al 2006) Recruiting from an alumni pool would be expected to generate the same advantages as promoting from within Yet additional benefits may also be accrued As former employees have gone on to gain additional knowledge skills abilities and insights by way of other experiences these potential rehires represent potentially higher octane employees able to generate performance results better and faster than a new hire without previous experience with the firm Organizational alums may also serve as valuable referral sources given their knowledge of ldquogood fitrdquo with the former employer and their interest in maintaining connections to those within that organization

In light of an organizationrsquos specific labor needs and anticipated tight labor markets organizations can benefit from maintaining a bond with former employees Stewart (2003) suggests employers could be faced with an estimated 25 annual turnover of employees as labor trends indicate workers are likely to change jobs up to eight times in their working careers according to the US Bureau of Labor Statistics Hence keeping in touch with former employees through an alumni network represents a valuable recruitment tool for organizational success

WHY DO COMPANIES MAINTAIN CORPORATE ALUMNI NETWORKS

Organizations typically build corporate alumni networks with the sole purpose of re-recruiting however investing in such a network can bring ancillary benefits as well for example an increased number of high-quality referrals from alumni in the network and new business opportunities

1048707 High-performing corporate alumni represent a valuable talent pool mdashIn a 2005 survey of 100 US organizations 54 of respondents stated that they had actively sought to rehire former employees because they bring the following benefits123

Quick time-to-productivitymdashThe onboarding period and time-to-productivity is relatively short for alumni as they are already familiar with the companyrsquos people politics and processes

Experience and insight from other organizationsmdashReturning corporate alumni often bring back new skills and competencies that can make them more effective in their roles or a new perspective that enables them to see processsystem inefficiencies in their alumni employer They may also bring information about how competitors do business

1048707 Corporate alumni are relatively cost-effective to rehire mdashPursuing corporate alumni rehires may be a cost effective supplement to using contingency search firms particularly for highly technical or specialized positions where talent is in high demand Organizations with an established corporate alumni network may not need to hire an external party for assistance with the first phase of the recruitment cycle (eg generating ldquonamesrdquo)

1048707 Corporate alumni can be a good source of candidate referrals mdashEven if they do not return as employees corporate alumni who feel connected to the organization may be more likely to refer other potential hires With their understanding of the corporate culture and certain job roles they are likely to recommend quality referrals with strong organization and job fit 4 Strategies for converting these referrals into hires include building a competitive employment value proposition (EVP) and leveraging current employees to communicate the EVP Further Council research on the importance of crafting a compelling EVP is available in our study titled Attracting and Retaining Critical Talent Segments5

1048707 Alumni provide new business opportunities mdashOrganizations such as McKinsey amp Company and Bain amp Company report that alumni often provide new business opportunities through some of the activities listed below

Purchasing goods or services from their former organization Facilitating strategic alliances between their former employer and their current

employer Referring (directly or indirectly) potential customers resources and vendors to their

former employer

BUSINESS DEVELOPMENT AS A CONTACT SPORT

ldquoBusiness development is a contact sportrdquo says Attorney Tarlow ldquoYou send your business to the last person with whom you had positive contact Whoever has the best strategy and the tools for developing and maintaining their contacts winsrdquo

ldquoIn the legal world as in other arenas contact with alumni delivers business referrals an important asset particularly in these times of slow or moderate growthrdquo Tarlow says ldquoPeople simply feel more confident hiring someone they know or someone personally recommendedrdquo

Alumni networks also help law firms track the progress of a former employeersquos career If the individual developed a specific expertise the firm requires it would have an opportunity to tap into the individualrsquos knowledge form a business alliance or perhaps lure the individual back

ldquoEmployers secure a competitive advantage when they are able to track their alumnirdquo he says In that regard Tarlow sees that a strong alumni network could help lower recruiting costs Firms that need to expand their staff with attorneys with specific skills and experience usually enlist the help of a recruiter at placement fees of 25 - or more depending on the position On an annual salary of $100000 the recruiter would get $25000 ldquoThatrsquos not insignificantrdquo Tarlow says

To understand the magnitude of the expense imagine that if a professional firm hires eight new staff members each year at a base salary of $100000 recruiter fees alone would total at least $200000

Excluding situations that require placement fees the average cost of replacing an employee is about $10000 per position according to the Employment Management Association The Society for Human Resources Management estimates the average cost of a rehire to be $5000 ndash and rehires tend to stay twice as long

On the other hand a firm can hire a former employee or candidate recommended by a former employee and save tens of thousands of dollars per hire Further studies show that new hires are 40 less productive than rehires during the first few months of employment Therefore rehiring former employees or enlisting the assistance of former employees to recruit new employees should not be ignored

Human Resource expert Arte Nathan New Products Thought Leader for Mellon HR Solutions advocates the creation of communities to build a companyrsquos success and sees alumni networks as facilitating that effort

ldquoBelonging to a corporate community makes sense for both the individual and the corporation When you facilitate people coming and going and assist your community in staying connected companies will be able to take advantage of great resources that would otherwise walk out the door and drop off the radar screenrdquo Nathan says

Nathan sees that industries experiencing growth or facing labor shortages such as healthcare would gain a competitive advantage via connections with a community of former employees However that advantage could be experienced by any organization whose success in the marketplace is a result of the quality of its workforce

ldquoThe important thing here is to build up communities of prospective employees current employees and former employees These communities can give your company a competitive edge by continuing to add value to your company in conventional -- and unconventional -- waysrdquo

Nathan points out that alumni include not just people at the start or middle of their careers but retirees Keeping in touch with this group is appropriate because most will maintain some kind of connection simply because of benefits and investment in the organization Companies that embrace a connection with their retirees will earn their loyalty and the opportunity to rely on the retiree as a source of information inspiration and knowledge Additionally the retiree may serve as a referral for new business and potential employees

In a report on ldquolost knowledgerdquo in the global chemical industry worldwide consulting firm Accenture discusses how the retirement or departure of senior scientists poses a costly and potentially devastating blow to chemical companies According to the February 2002 report these senior scientists had over the years saved their companies literally millions of dollars each because of their knowledge about certain processes that came from experience not textbooks

As these scientists retired or left the chemical company they took with them information that they had accumulated over the years

Accenture recommended that chemical companies maintain a tight relationship with their expertsndash even hiring them as consultants or retaining them on an as-needed basis -- to transfer information serve as mentors and be available as sources of knowledge and advice as needed

Research Fellow David DeLong writes ldquoIn the current economy it will be tempting for leaders to give in to the demands for short-term financial performance But savvy executives recognize that they also must champion more costly knowledge retention strategies because some of their units could be headed for a point of no return in a few yearsrdquo

The lesson could well be applied to many other knowledge-based industries

While itrsquos clear that alumni networks can play a key role in an organizationrsquos success itrsquos important to remember that not just any kind of network will do The costs of running a manual or unstructured alumni network can be high Alumni networks that automate repetitive tasks and shift the maintenance of contact information to former employees will deliver a return on your investment

The methods most companies have used to keep in touch with their alumni have until recently been primarily informal inefficient and left to individuals to create ndash rather than a company-wide initiative But as Tarlow says ldquoIf you donrsquot have the database or tools itrsquos very time-consuming Therersquos no immediate return on your investmentrdquo

Tarlow cites the act of sending a holiday card to former employees as a simple gesture that shows employees you remember them and valued their service It can have positive results as long as sending the card isnrsquot a time-consuming costly process

Automated alumni networks can also handle registration event management job postings and news publication with minimal staff intervention

ACTIVITIES CONTRIBUTING TO AN EFFECTIVE CORPORATE ALUMNI NETWORK

Organizations face three main challenges when managing their alumni hiring programs gaining the active participation of alumni in the network targeting re-recruiting efforts at the alumni segments most likely to drive quality of hire and monitoring the health of and returns from the network Listed below are a few guidelines that companies may wish to consider as they confront these challenges

Dr i v e A c t i v e Participation in the Ne t w ork

1 Highlight compelling value proposition for participation in the networkmdashOrganizations often spend a significant amount of timeresources creating their corporate alumni network but underinvest in marketing strategies to increase participation rates One method for driving interest in the initiative is to highlight the benefits of joining the network some of which include following

Access to a group that engages in social events professional training volunteering andor provides an opportunity for alumni to share information on jobs and careers as well as leads and references for business ventures

Discounts on products or services

2 Make employees aware of the corporate alumni network during the exit processmdashInternal analysis from organizations such as Ernst amp Young suggests that the vast majority of alumni return to the organization soon after their initial departure thus organizations may want to provide employees with the following information during the exit proces sign-up procedures network benefits and scope of the network (see page 3 for further details from Ernst amp Young alumnirecruiting outreach program)

Target the Al umni Segments Most Likel y to Dri ve Q uality of Hire

3 Focus on high-value corporate alumni segmentsmdashFocusing efforts on former employees who were top performers or those who demonstrated a strong commitment to the job or company helps ensure a higher quality of network members In addition some organizations extend the scope of their corporate alumni program to include those who were not permanent full-time employees such as interns or contractors The list below suggests employee segments to target for the program

Top performers who left voluntarily Individuals who occupied key positions Individuals with key skills contacts or experience Individuals leaving to pursue further education in disciplinescritical to company

operations Retirees who may wish to return to employment High-performing interns or contractors

Build a D a shboard to M easure O v e r all Program Success and Track A lumni S e gments that Generate Large Number of Qua l ity Re-hires

4 Build and monitor metrics specific to the alumni network programmdashBuilding a dashboard with program-specific qualitative and quantitative metrics helps companies to monitor the overall health of their network and also make principled decisions on where to over- or under-invest in the future (eg former high performing internscontractors may have a higher conversion rate than top performers who left voluntarily so companies would therefore host more events for this segment) A list of potential metrics is included in the table below

Table 1 Checklist of Alumni Network Metrics

Quantitative Metrics

Qualitative Metrics

9 Cost per hire of corporate alumni vs regular hires9 Time to fill for corporate alumni vs regular hires9 Number of corporate alumni entered in program database9 Number of corporate alumni hired9 Number of referrals made by corporate alumni9 Number of hires generated by corporate alumni referrals9 Retention rate for corporate alumni

9 Employee engagement levels of corporate alumni vs hires from other channels

9 Additional skills and experiences brought to the

organization as a result of rehiring corporate alumni

CASE STUDY

Alumni linked in to old firms

This is a summary of an article originally published by LM SIXEL in the Houston Chronicle on Feb 3rd 2010

Janet Roth wasnt looking for a new job But her neighbour a former colleague at Deloitte encouraged Roth to join the firms online network for former employees and retirees Roth had worked at Deloitte for seven years leaving in 1996 to join one of its clients Late one night Roth was scrolling through Deloittes alumni site and saw a job opening that sounded interesting She applied went through a streamlined interview process and rejoined Deloitte in 2007 She joined the network mostly for social reasons ldquobut I ended up with a jobrdquo said Roth who is now senior manager in the mergers and acquisitions group in Houston It used to be that when you walked out the door that was it The working relationship was over once you turned in your ID badge and collected your last paycheck

But many companies are reconsidering that strategy After all skilled employees arent that easy to find especially ones who know the corporate culture So companies have taken a page from social sites and launched their own alumni networks The online sites which typically are controlled by individual companies like Deloitte are a way for ex-employees to connect with their former bosses and former co-workers mdash and maybe boomerang back often with newly acquired skills

New skills

Its efficient said Cathy Clonts president of Alumni Web Services which designs alumni networks for corporate clients Members update their contact information and any new skills they acquire Companies in turn can data-mine to find the skills theyre looking for

Its also a way a company can promote its own brand to a group that is already loyal Clonts said Deloitte likes to refer to the members of its AlumNet as ldquocolleagues for liferdquo said Coleman Rowland a partner in energy and resource practices in Houston He said Deloittes alumni network has become such an important business imperative that the firm has seven regional alumni network coordinators around the nation who keep up with the entries Of the 100000 alumni nationwide who left the firm in good standing and are eligible to join Deloittes network 56000 have registered Of those 4000 are in Houston

No more ledgers

In the past the firm kept up with its former employees by updating addresses in ledgers and spreadsheets But that wasnt easy especially when people move so frequently Roth for example moved from Houston to Minnesota to Florida and back to Houston in a series of corporate transfers ldquoDeloitte lost track of me raising three kidsrdquo she said with a laugh It took

running into Rowland who mentioned the network for Roth to reconnect with her old firm Clients and other ldquofriends of the firmrdquo cant get onto the network to troll for possible job candidates but the firm does list its job openings as a courtesy Thats how one of its clients a non-profit found its controller Rowland said And it didnt have to pay any recruiting fees

The Deloitte network which is more LinkedIn than Facebook isnt set up as a chat site or a place to extol the pleasures of retirement Members however can send e-mails to each other through the Deloitte server ldquoIts a way to really expand your networkrdquo Roth said

CONCLUSION

A company alumni network is made to remain in contact and maintain relationships with former employees This offers organizations a new resource for enhancing organizational capabilities Though making formal corporate alumni networks has recently become very important they have been loosely formed and utilized since as long as there have been companies and employees who leave them ndash by letter mailings volunteer groups gatherings etc

Adding to this social networking is redefining the way we interact with colleagues corporate alumni and business partners Forward-thinking employers recognize that investing in life-long relationships through comprehensive alumni programs carries measurable value in recruitment employment branding and new business development

Companies have realised that alumni provide an inside track to new business opportunities It can also be highlighted that alumni who are re-hired stay longer and cost less to onboard than talent new to the organization Also Alumni provide great referrals and are excellent often proactive ambassadors for the company brand

In short these networks are very beneficial to the companies as well as the alumnis due to which its becoming more popular and very important Few companies that have seen the trend and adapted to it are ndash Deloitte Ernst amp Young McKinsey amp Company and Bain amp Company

Thus Alumni networks are seen as

- A key potential driver of competitive advantage for employers- A rich untapped source of innovation human talent and business relationships- Still emergent (in most sectors) and hence demanding clear management focus

AKNOWLEDGEMENT

We would like to thank Ms Yesha Sheth for giving us this topic We would also like to thank her for her guidance and support throughout the project

BIBLIOGRAPHY

wwwselectmindscom

wwwclcexecutiveboardcom

wwwxingcom

wwwfirsttuesdaych

wwwwikipediacom

wwwencyclopediacom

One of a corporations most important sources of value is that intangible quality called ldquoculturerdquo which can also be an agent acting both for and against change A companys culture is often seen as a function of its organization but recent research shows that it is also importantly influenced by internal ldquosocialrdquo networks that cross organization boundaries An emerging management challenge is to understand how these networks work in order to leverage their positive effects Like markets networks work based on an exchange of value But without contracts or explicit organizational structures to govern the exchanges they also depend to a greater degree on the element of trust that provides a foundation for collaboration And trust is notoriously vulnerable to bad faith Managements that want to drive value through cultural change need to understand how to cultivate trust throughout their networks This is another reason why corporate alumni networks are so interesting because membership in them is entirely voluntary they rely on and cultivate loyalty and a perception of common bonds which in turn provide a foundation for trust Loyalty too of course must be earned through an exchange of value and the value proposition of corporate alumni networks will depend on balancing the practical and tangible benefits for both alumni and the company Those tangible benefits will then strengthen the intangible relations built on loyalty and trust

WHAT EXACTLY ARE CORPORATE ALUMNI NETWORKS

Corporate alumni networks are organizations whose members are the former employees of a particular company Beyond this basic characteristic they vary widely in terms of size longevity origins purpose governance authority structure activities and even membership criteria Chris Gopsill Executive Producer at First Tuesday Zurich began his presentation of research findings on the current state of these organizations by describing three basic types

First Tuesdays benchmarking survey of 15 of the most prominent large corporations with alumni programs provides an important background on the status of these networks some of them long-standing some in development some of the hybrid kind and under evaluation All of the companies are multinationals and the respondents were based in either the United States (30) or Europe (70) including the UK Germany and Switzerland They covered several industry sectors including professional services and management consultancy information technology (IT) manufacturing travel and pharmaceuticals Due to the differences in type and status the survey could not lead to a systematic analysis but did produce many valuable highlights regarding basic operations membership benefits for the alumni and the company and critical success factors

1 Independent ldquograssrootsrdquo associations are those founded solely on the initiative of former employees without company support or approval (or disapproval) They are informal groups that provide directories of members organize occasional events and reunions and may coordinate other projects It is hard to estimate their number (there is no association of associations) but it runs into the thousands Their success is often temporary or hard to sustain

2 Company-supported grassroots associations were also founded independently but have grown sufficiently in size and stature to win recognition from the company which may also provide financial and other means of support These hybrids vary widely and are much fewer in number probably because only a few large corporations have alumni populations large enough to reach ldquocritical massrdquo Their activities are similar to those of the independent groups sometimes facilitated by web-based platforms The most notable example in this category is the association started by alumni of the US-based consumer marketing giant Procter amp Gamble

3 Company-managed associations are those founded and chartered by the company with board-level approval have explicit objectives and policies and are managed by full-time staff with executive oversight This type has existed in the professional services sector for

years in a few cases for decades but in recent years they have penetrated several industries particularly among large multinationals

Considering company-initiated alumni networks the commonly mentioned elements involved in realizing the networkrsquos purpose include (1) securing executive support (2) defining network participants (3) determining content and information to be shared and (4) creating the channel(s) by which connection with alums will be maintained (Canabou 2002 Kirsner 2002 Stewart 2003)

First gaining buy-in from company executives is vital to ensure the network initiative is supported with adequate resources and taken seriously by those both inside and outside of the organization Such executive support will encourage meaningful participation by those involved in the network through exhibiting company values towards its human resources

Second establishing who is to participate in the alumni network involves two different issues (1) deciding on network management being performed in-house or contracted out and (2) defining which ex-employees are eligible to participate Available company resources along with the anticipated size of the alumni network are defining variables as to how the network will be managed (ie in-house or outsourced) Regardless appointment of internal persons to be responsible for the design and delivery of the network or oversight of outsourced partners is necessary (Stewart 2003) Outsourcing through the use of a specialized network services firm such as Bernard C Harris Publishing Corporate Alumni and SelectMinds is one efficient method to manage onersquos network via a web-based platform (Kirsner 2002)

To determine which ex-employees to invite to participate in the alumni network several criteria are commonly used The employeersquos tenure at the company and reason(s) for departure play a significant role in determining if an invitation to the corporate alumni network should be offered (Stewart 2003) As employees vary in terms of their knowledge skills and abilities they too vary regarding their strategic importance to the firm (Lepak amp Snell 1999) Inviting only departing employees considered to be part of an organizationrsquos core workforce workers directly contributing to the competitive advantage of the organization (Delery amp Shaw 2001) would result in higher potential alumni contributions to the firm In addition the nature of the alumni base whether it is companywide or division-specific often acts as a selection criterion for network participation (Stewart)

Third to encourage participation in the network and foster symmetric ties Canabou (2002) states there must be valuable information and activities offered in order for ex-employees to remain engaged Access to an up-to-date alumni directory for the purpose of tapping new job opportunities is noted as ldquothe number one benefitrdquo of alumni networks (Canabou) In addition other meaningful resources to make available include job boards training classes job referrals management resources discussion boards alumni and company news along with cocktail parties

to facilitate further networking (Canabou 2002 Kirsner 2002 Stewart 2003) Gaining input from the alumni base is also important to ensure their interests are being met and to in turn foster continued engagement and connectedness to the organization (Canabou 2002)

Fourth the decision as to how the organization will remain connected to its former employees is an important one The use of a web-based system allows for easy and efficient management of alumni contact information and general data Alumni access through a web home page also offers practical sense in addition to contact via email e-newsletters and mail Events also represent a valuable means for maintaining connections to alumni such as alumni networking parties or corporate charity initiatives Considering the nature of the alumni base and their comfort level with technology older ex-employees may be less likely to engage on-line and may require more customized delivery such as mailings of alumni communications

With the ultimate goal of establishing an alumni network to help improve the companyrsquos business (Stewart 2003) there are benefits to be accrued to both the participating alumni and the host organization For ex-employees maintaining good-standing with former employers makes good sense Alumni network participation provides access to information sources that may prove to be rich sources for employment andor business opportunities For the sponsoring organization an alumni network can serve as a vital connection to tacit knowledge held in the minds of former employees provide access to a talent pool for rehire or contract work and serve as a source of referrals and new business partners (Canabou 2002 DeLong 2004 Kirsner 2002 Stewart 2003) Further consideration of the potential gains that may be acquired by an organization via their alumni network such as employee recruitment workforce flexibility knowledge retention and organizational culture are explored next In light of the dynamic and challenging environment facing organizations today examination of new avenues to leverage organizational resources is vital to remaining a viable competitor with above average profits

ALUMNI NETWORKS AND EMPLOYEE RECRUITMENT

Building and maintaining a strong human resource capability within an organization starts with the attraction of high quality good fit potential employees Recruitment serves as a primary means of attracting future employees along with targeting specific applicant pools and offering signing incentives (Rynes amp Barber 1990) Key to a successful recruitment strategy are the sources used by organizations to recruit potential employees (Noe et al 2006) The use of internal sources defined as filling vacancies with current employees offers several advantages including (1) the firmrsquos familiarity with internal candidates (2) the applicantrsquos knowledge of the firm and (3) the lower recruiting costs (Noe et al 2006) Recruiting from an alumni pool would be expected to generate the same advantages as promoting from within Yet additional benefits may also be accrued As former employees have gone on to gain additional knowledge skills abilities and insights by way of other experiences these potential rehires represent potentially higher octane employees able to generate performance results better and faster than a new hire without previous experience with the firm Organizational alums may also serve as valuable referral sources given their knowledge of ldquogood fitrdquo with the former employer and their interest in maintaining connections to those within that organization

In light of an organizationrsquos specific labor needs and anticipated tight labor markets organizations can benefit from maintaining a bond with former employees Stewart (2003) suggests employers could be faced with an estimated 25 annual turnover of employees as labor trends indicate workers are likely to change jobs up to eight times in their working careers according to the US Bureau of Labor Statistics Hence keeping in touch with former employees through an alumni network represents a valuable recruitment tool for organizational success

WHY DO COMPANIES MAINTAIN CORPORATE ALUMNI NETWORKS

Organizations typically build corporate alumni networks with the sole purpose of re-recruiting however investing in such a network can bring ancillary benefits as well for example an increased number of high-quality referrals from alumni in the network and new business opportunities

1048707 High-performing corporate alumni represent a valuable talent pool mdashIn a 2005 survey of 100 US organizations 54 of respondents stated that they had actively sought to rehire former employees because they bring the following benefits123

Quick time-to-productivitymdashThe onboarding period and time-to-productivity is relatively short for alumni as they are already familiar with the companyrsquos people politics and processes

Experience and insight from other organizationsmdashReturning corporate alumni often bring back new skills and competencies that can make them more effective in their roles or a new perspective that enables them to see processsystem inefficiencies in their alumni employer They may also bring information about how competitors do business

1048707 Corporate alumni are relatively cost-effective to rehire mdashPursuing corporate alumni rehires may be a cost effective supplement to using contingency search firms particularly for highly technical or specialized positions where talent is in high demand Organizations with an established corporate alumni network may not need to hire an external party for assistance with the first phase of the recruitment cycle (eg generating ldquonamesrdquo)

1048707 Corporate alumni can be a good source of candidate referrals mdashEven if they do not return as employees corporate alumni who feel connected to the organization may be more likely to refer other potential hires With their understanding of the corporate culture and certain job roles they are likely to recommend quality referrals with strong organization and job fit 4 Strategies for converting these referrals into hires include building a competitive employment value proposition (EVP) and leveraging current employees to communicate the EVP Further Council research on the importance of crafting a compelling EVP is available in our study titled Attracting and Retaining Critical Talent Segments5

1048707 Alumni provide new business opportunities mdashOrganizations such as McKinsey amp Company and Bain amp Company report that alumni often provide new business opportunities through some of the activities listed below

Purchasing goods or services from their former organization Facilitating strategic alliances between their former employer and their current

employer Referring (directly or indirectly) potential customers resources and vendors to their

former employer

BUSINESS DEVELOPMENT AS A CONTACT SPORT

ldquoBusiness development is a contact sportrdquo says Attorney Tarlow ldquoYou send your business to the last person with whom you had positive contact Whoever has the best strategy and the tools for developing and maintaining their contacts winsrdquo

ldquoIn the legal world as in other arenas contact with alumni delivers business referrals an important asset particularly in these times of slow or moderate growthrdquo Tarlow says ldquoPeople simply feel more confident hiring someone they know or someone personally recommendedrdquo

Alumni networks also help law firms track the progress of a former employeersquos career If the individual developed a specific expertise the firm requires it would have an opportunity to tap into the individualrsquos knowledge form a business alliance or perhaps lure the individual back

ldquoEmployers secure a competitive advantage when they are able to track their alumnirdquo he says In that regard Tarlow sees that a strong alumni network could help lower recruiting costs Firms that need to expand their staff with attorneys with specific skills and experience usually enlist the help of a recruiter at placement fees of 25 - or more depending on the position On an annual salary of $100000 the recruiter would get $25000 ldquoThatrsquos not insignificantrdquo Tarlow says

To understand the magnitude of the expense imagine that if a professional firm hires eight new staff members each year at a base salary of $100000 recruiter fees alone would total at least $200000

Excluding situations that require placement fees the average cost of replacing an employee is about $10000 per position according to the Employment Management Association The Society for Human Resources Management estimates the average cost of a rehire to be $5000 ndash and rehires tend to stay twice as long

On the other hand a firm can hire a former employee or candidate recommended by a former employee and save tens of thousands of dollars per hire Further studies show that new hires are 40 less productive than rehires during the first few months of employment Therefore rehiring former employees or enlisting the assistance of former employees to recruit new employees should not be ignored

Human Resource expert Arte Nathan New Products Thought Leader for Mellon HR Solutions advocates the creation of communities to build a companyrsquos success and sees alumni networks as facilitating that effort

ldquoBelonging to a corporate community makes sense for both the individual and the corporation When you facilitate people coming and going and assist your community in staying connected companies will be able to take advantage of great resources that would otherwise walk out the door and drop off the radar screenrdquo Nathan says

Nathan sees that industries experiencing growth or facing labor shortages such as healthcare would gain a competitive advantage via connections with a community of former employees However that advantage could be experienced by any organization whose success in the marketplace is a result of the quality of its workforce

ldquoThe important thing here is to build up communities of prospective employees current employees and former employees These communities can give your company a competitive edge by continuing to add value to your company in conventional -- and unconventional -- waysrdquo

Nathan points out that alumni include not just people at the start or middle of their careers but retirees Keeping in touch with this group is appropriate because most will maintain some kind of connection simply because of benefits and investment in the organization Companies that embrace a connection with their retirees will earn their loyalty and the opportunity to rely on the retiree as a source of information inspiration and knowledge Additionally the retiree may serve as a referral for new business and potential employees

In a report on ldquolost knowledgerdquo in the global chemical industry worldwide consulting firm Accenture discusses how the retirement or departure of senior scientists poses a costly and potentially devastating blow to chemical companies According to the February 2002 report these senior scientists had over the years saved their companies literally millions of dollars each because of their knowledge about certain processes that came from experience not textbooks

As these scientists retired or left the chemical company they took with them information that they had accumulated over the years

Accenture recommended that chemical companies maintain a tight relationship with their expertsndash even hiring them as consultants or retaining them on an as-needed basis -- to transfer information serve as mentors and be available as sources of knowledge and advice as needed

Research Fellow David DeLong writes ldquoIn the current economy it will be tempting for leaders to give in to the demands for short-term financial performance But savvy executives recognize that they also must champion more costly knowledge retention strategies because some of their units could be headed for a point of no return in a few yearsrdquo

The lesson could well be applied to many other knowledge-based industries

While itrsquos clear that alumni networks can play a key role in an organizationrsquos success itrsquos important to remember that not just any kind of network will do The costs of running a manual or unstructured alumni network can be high Alumni networks that automate repetitive tasks and shift the maintenance of contact information to former employees will deliver a return on your investment

The methods most companies have used to keep in touch with their alumni have until recently been primarily informal inefficient and left to individuals to create ndash rather than a company-wide initiative But as Tarlow says ldquoIf you donrsquot have the database or tools itrsquos very time-consuming Therersquos no immediate return on your investmentrdquo

Tarlow cites the act of sending a holiday card to former employees as a simple gesture that shows employees you remember them and valued their service It can have positive results as long as sending the card isnrsquot a time-consuming costly process

Automated alumni networks can also handle registration event management job postings and news publication with minimal staff intervention

ACTIVITIES CONTRIBUTING TO AN EFFECTIVE CORPORATE ALUMNI NETWORK

Organizations face three main challenges when managing their alumni hiring programs gaining the active participation of alumni in the network targeting re-recruiting efforts at the alumni segments most likely to drive quality of hire and monitoring the health of and returns from the network Listed below are a few guidelines that companies may wish to consider as they confront these challenges

Dr i v e A c t i v e Participation in the Ne t w ork

1 Highlight compelling value proposition for participation in the networkmdashOrganizations often spend a significant amount of timeresources creating their corporate alumni network but underinvest in marketing strategies to increase participation rates One method for driving interest in the initiative is to highlight the benefits of joining the network some of which include following

Access to a group that engages in social events professional training volunteering andor provides an opportunity for alumni to share information on jobs and careers as well as leads and references for business ventures

Discounts on products or services

2 Make employees aware of the corporate alumni network during the exit processmdashInternal analysis from organizations such as Ernst amp Young suggests that the vast majority of alumni return to the organization soon after their initial departure thus organizations may want to provide employees with the following information during the exit proces sign-up procedures network benefits and scope of the network (see page 3 for further details from Ernst amp Young alumnirecruiting outreach program)

Target the Al umni Segments Most Likel y to Dri ve Q uality of Hire

3 Focus on high-value corporate alumni segmentsmdashFocusing efforts on former employees who were top performers or those who demonstrated a strong commitment to the job or company helps ensure a higher quality of network members In addition some organizations extend the scope of their corporate alumni program to include those who were not permanent full-time employees such as interns or contractors The list below suggests employee segments to target for the program

Top performers who left voluntarily Individuals who occupied key positions Individuals with key skills contacts or experience Individuals leaving to pursue further education in disciplinescritical to company

operations Retirees who may wish to return to employment High-performing interns or contractors

Build a D a shboard to M easure O v e r all Program Success and Track A lumni S e gments that Generate Large Number of Qua l ity Re-hires

4 Build and monitor metrics specific to the alumni network programmdashBuilding a dashboard with program-specific qualitative and quantitative metrics helps companies to monitor the overall health of their network and also make principled decisions on where to over- or under-invest in the future (eg former high performing internscontractors may have a higher conversion rate than top performers who left voluntarily so companies would therefore host more events for this segment) A list of potential metrics is included in the table below

Table 1 Checklist of Alumni Network Metrics

Quantitative Metrics

Qualitative Metrics

9 Cost per hire of corporate alumni vs regular hires9 Time to fill for corporate alumni vs regular hires9 Number of corporate alumni entered in program database9 Number of corporate alumni hired9 Number of referrals made by corporate alumni9 Number of hires generated by corporate alumni referrals9 Retention rate for corporate alumni

9 Employee engagement levels of corporate alumni vs hires from other channels

9 Additional skills and experiences brought to the

organization as a result of rehiring corporate alumni

CASE STUDY

Alumni linked in to old firms

This is a summary of an article originally published by LM SIXEL in the Houston Chronicle on Feb 3rd 2010

Janet Roth wasnt looking for a new job But her neighbour a former colleague at Deloitte encouraged Roth to join the firms online network for former employees and retirees Roth had worked at Deloitte for seven years leaving in 1996 to join one of its clients Late one night Roth was scrolling through Deloittes alumni site and saw a job opening that sounded interesting She applied went through a streamlined interview process and rejoined Deloitte in 2007 She joined the network mostly for social reasons ldquobut I ended up with a jobrdquo said Roth who is now senior manager in the mergers and acquisitions group in Houston It used to be that when you walked out the door that was it The working relationship was over once you turned in your ID badge and collected your last paycheck

But many companies are reconsidering that strategy After all skilled employees arent that easy to find especially ones who know the corporate culture So companies have taken a page from social sites and launched their own alumni networks The online sites which typically are controlled by individual companies like Deloitte are a way for ex-employees to connect with their former bosses and former co-workers mdash and maybe boomerang back often with newly acquired skills

New skills

Its efficient said Cathy Clonts president of Alumni Web Services which designs alumni networks for corporate clients Members update their contact information and any new skills they acquire Companies in turn can data-mine to find the skills theyre looking for

Its also a way a company can promote its own brand to a group that is already loyal Clonts said Deloitte likes to refer to the members of its AlumNet as ldquocolleagues for liferdquo said Coleman Rowland a partner in energy and resource practices in Houston He said Deloittes alumni network has become such an important business imperative that the firm has seven regional alumni network coordinators around the nation who keep up with the entries Of the 100000 alumni nationwide who left the firm in good standing and are eligible to join Deloittes network 56000 have registered Of those 4000 are in Houston

No more ledgers

In the past the firm kept up with its former employees by updating addresses in ledgers and spreadsheets But that wasnt easy especially when people move so frequently Roth for example moved from Houston to Minnesota to Florida and back to Houston in a series of corporate transfers ldquoDeloitte lost track of me raising three kidsrdquo she said with a laugh It took

running into Rowland who mentioned the network for Roth to reconnect with her old firm Clients and other ldquofriends of the firmrdquo cant get onto the network to troll for possible job candidates but the firm does list its job openings as a courtesy Thats how one of its clients a non-profit found its controller Rowland said And it didnt have to pay any recruiting fees

The Deloitte network which is more LinkedIn than Facebook isnt set up as a chat site or a place to extol the pleasures of retirement Members however can send e-mails to each other through the Deloitte server ldquoIts a way to really expand your networkrdquo Roth said

CONCLUSION

A company alumni network is made to remain in contact and maintain relationships with former employees This offers organizations a new resource for enhancing organizational capabilities Though making formal corporate alumni networks has recently become very important they have been loosely formed and utilized since as long as there have been companies and employees who leave them ndash by letter mailings volunteer groups gatherings etc

Adding to this social networking is redefining the way we interact with colleagues corporate alumni and business partners Forward-thinking employers recognize that investing in life-long relationships through comprehensive alumni programs carries measurable value in recruitment employment branding and new business development

Companies have realised that alumni provide an inside track to new business opportunities It can also be highlighted that alumni who are re-hired stay longer and cost less to onboard than talent new to the organization Also Alumni provide great referrals and are excellent often proactive ambassadors for the company brand

In short these networks are very beneficial to the companies as well as the alumnis due to which its becoming more popular and very important Few companies that have seen the trend and adapted to it are ndash Deloitte Ernst amp Young McKinsey amp Company and Bain amp Company

Thus Alumni networks are seen as

- A key potential driver of competitive advantage for employers- A rich untapped source of innovation human talent and business relationships- Still emergent (in most sectors) and hence demanding clear management focus

AKNOWLEDGEMENT

We would like to thank Ms Yesha Sheth for giving us this topic We would also like to thank her for her guidance and support throughout the project

BIBLIOGRAPHY

wwwselectmindscom

wwwclcexecutiveboardcom

wwwxingcom

wwwfirsttuesdaych

wwwwikipediacom

wwwencyclopediacom

WHAT EXACTLY ARE CORPORATE ALUMNI NETWORKS

Corporate alumni networks are organizations whose members are the former employees of a particular company Beyond this basic characteristic they vary widely in terms of size longevity origins purpose governance authority structure activities and even membership criteria Chris Gopsill Executive Producer at First Tuesday Zurich began his presentation of research findings on the current state of these organizations by describing three basic types

First Tuesdays benchmarking survey of 15 of the most prominent large corporations with alumni programs provides an important background on the status of these networks some of them long-standing some in development some of the hybrid kind and under evaluation All of the companies are multinationals and the respondents were based in either the United States (30) or Europe (70) including the UK Germany and Switzerland They covered several industry sectors including professional services and management consultancy information technology (IT) manufacturing travel and pharmaceuticals Due to the differences in type and status the survey could not lead to a systematic analysis but did produce many valuable highlights regarding basic operations membership benefits for the alumni and the company and critical success factors

1 Independent ldquograssrootsrdquo associations are those founded solely on the initiative of former employees without company support or approval (or disapproval) They are informal groups that provide directories of members organize occasional events and reunions and may coordinate other projects It is hard to estimate their number (there is no association of associations) but it runs into the thousands Their success is often temporary or hard to sustain

2 Company-supported grassroots associations were also founded independently but have grown sufficiently in size and stature to win recognition from the company which may also provide financial and other means of support These hybrids vary widely and are much fewer in number probably because only a few large corporations have alumni populations large enough to reach ldquocritical massrdquo Their activities are similar to those of the independent groups sometimes facilitated by web-based platforms The most notable example in this category is the association started by alumni of the US-based consumer marketing giant Procter amp Gamble

3 Company-managed associations are those founded and chartered by the company with board-level approval have explicit objectives and policies and are managed by full-time staff with executive oversight This type has existed in the professional services sector for

years in a few cases for decades but in recent years they have penetrated several industries particularly among large multinationals

Considering company-initiated alumni networks the commonly mentioned elements involved in realizing the networkrsquos purpose include (1) securing executive support (2) defining network participants (3) determining content and information to be shared and (4) creating the channel(s) by which connection with alums will be maintained (Canabou 2002 Kirsner 2002 Stewart 2003)

First gaining buy-in from company executives is vital to ensure the network initiative is supported with adequate resources and taken seriously by those both inside and outside of the organization Such executive support will encourage meaningful participation by those involved in the network through exhibiting company values towards its human resources

Second establishing who is to participate in the alumni network involves two different issues (1) deciding on network management being performed in-house or contracted out and (2) defining which ex-employees are eligible to participate Available company resources along with the anticipated size of the alumni network are defining variables as to how the network will be managed (ie in-house or outsourced) Regardless appointment of internal persons to be responsible for the design and delivery of the network or oversight of outsourced partners is necessary (Stewart 2003) Outsourcing through the use of a specialized network services firm such as Bernard C Harris Publishing Corporate Alumni and SelectMinds is one efficient method to manage onersquos network via a web-based platform (Kirsner 2002)

To determine which ex-employees to invite to participate in the alumni network several criteria are commonly used The employeersquos tenure at the company and reason(s) for departure play a significant role in determining if an invitation to the corporate alumni network should be offered (Stewart 2003) As employees vary in terms of their knowledge skills and abilities they too vary regarding their strategic importance to the firm (Lepak amp Snell 1999) Inviting only departing employees considered to be part of an organizationrsquos core workforce workers directly contributing to the competitive advantage of the organization (Delery amp Shaw 2001) would result in higher potential alumni contributions to the firm In addition the nature of the alumni base whether it is companywide or division-specific often acts as a selection criterion for network participation (Stewart)

Third to encourage participation in the network and foster symmetric ties Canabou (2002) states there must be valuable information and activities offered in order for ex-employees to remain engaged Access to an up-to-date alumni directory for the purpose of tapping new job opportunities is noted as ldquothe number one benefitrdquo of alumni networks (Canabou) In addition other meaningful resources to make available include job boards training classes job referrals management resources discussion boards alumni and company news along with cocktail parties

to facilitate further networking (Canabou 2002 Kirsner 2002 Stewart 2003) Gaining input from the alumni base is also important to ensure their interests are being met and to in turn foster continued engagement and connectedness to the organization (Canabou 2002)

Fourth the decision as to how the organization will remain connected to its former employees is an important one The use of a web-based system allows for easy and efficient management of alumni contact information and general data Alumni access through a web home page also offers practical sense in addition to contact via email e-newsletters and mail Events also represent a valuable means for maintaining connections to alumni such as alumni networking parties or corporate charity initiatives Considering the nature of the alumni base and their comfort level with technology older ex-employees may be less likely to engage on-line and may require more customized delivery such as mailings of alumni communications

With the ultimate goal of establishing an alumni network to help improve the companyrsquos business (Stewart 2003) there are benefits to be accrued to both the participating alumni and the host organization For ex-employees maintaining good-standing with former employers makes good sense Alumni network participation provides access to information sources that may prove to be rich sources for employment andor business opportunities For the sponsoring organization an alumni network can serve as a vital connection to tacit knowledge held in the minds of former employees provide access to a talent pool for rehire or contract work and serve as a source of referrals and new business partners (Canabou 2002 DeLong 2004 Kirsner 2002 Stewart 2003) Further consideration of the potential gains that may be acquired by an organization via their alumni network such as employee recruitment workforce flexibility knowledge retention and organizational culture are explored next In light of the dynamic and challenging environment facing organizations today examination of new avenues to leverage organizational resources is vital to remaining a viable competitor with above average profits

ALUMNI NETWORKS AND EMPLOYEE RECRUITMENT

Building and maintaining a strong human resource capability within an organization starts with the attraction of high quality good fit potential employees Recruitment serves as a primary means of attracting future employees along with targeting specific applicant pools and offering signing incentives (Rynes amp Barber 1990) Key to a successful recruitment strategy are the sources used by organizations to recruit potential employees (Noe et al 2006) The use of internal sources defined as filling vacancies with current employees offers several advantages including (1) the firmrsquos familiarity with internal candidates (2) the applicantrsquos knowledge of the firm and (3) the lower recruiting costs (Noe et al 2006) Recruiting from an alumni pool would be expected to generate the same advantages as promoting from within Yet additional benefits may also be accrued As former employees have gone on to gain additional knowledge skills abilities and insights by way of other experiences these potential rehires represent potentially higher octane employees able to generate performance results better and faster than a new hire without previous experience with the firm Organizational alums may also serve as valuable referral sources given their knowledge of ldquogood fitrdquo with the former employer and their interest in maintaining connections to those within that organization

In light of an organizationrsquos specific labor needs and anticipated tight labor markets organizations can benefit from maintaining a bond with former employees Stewart (2003) suggests employers could be faced with an estimated 25 annual turnover of employees as labor trends indicate workers are likely to change jobs up to eight times in their working careers according to the US Bureau of Labor Statistics Hence keeping in touch with former employees through an alumni network represents a valuable recruitment tool for organizational success

WHY DO COMPANIES MAINTAIN CORPORATE ALUMNI NETWORKS

Organizations typically build corporate alumni networks with the sole purpose of re-recruiting however investing in such a network can bring ancillary benefits as well for example an increased number of high-quality referrals from alumni in the network and new business opportunities

1048707 High-performing corporate alumni represent a valuable talent pool mdashIn a 2005 survey of 100 US organizations 54 of respondents stated that they had actively sought to rehire former employees because they bring the following benefits123

Quick time-to-productivitymdashThe onboarding period and time-to-productivity is relatively short for alumni as they are already familiar with the companyrsquos people politics and processes

Experience and insight from other organizationsmdashReturning corporate alumni often bring back new skills and competencies that can make them more effective in their roles or a new perspective that enables them to see processsystem inefficiencies in their alumni employer They may also bring information about how competitors do business

1048707 Corporate alumni are relatively cost-effective to rehire mdashPursuing corporate alumni rehires may be a cost effective supplement to using contingency search firms particularly for highly technical or specialized positions where talent is in high demand Organizations with an established corporate alumni network may not need to hire an external party for assistance with the first phase of the recruitment cycle (eg generating ldquonamesrdquo)

1048707 Corporate alumni can be a good source of candidate referrals mdashEven if they do not return as employees corporate alumni who feel connected to the organization may be more likely to refer other potential hires With their understanding of the corporate culture and certain job roles they are likely to recommend quality referrals with strong organization and job fit 4 Strategies for converting these referrals into hires include building a competitive employment value proposition (EVP) and leveraging current employees to communicate the EVP Further Council research on the importance of crafting a compelling EVP is available in our study titled Attracting and Retaining Critical Talent Segments5

1048707 Alumni provide new business opportunities mdashOrganizations such as McKinsey amp Company and Bain amp Company report that alumni often provide new business opportunities through some of the activities listed below

Purchasing goods or services from their former organization Facilitating strategic alliances between their former employer and their current

employer Referring (directly or indirectly) potential customers resources and vendors to their

former employer

BUSINESS DEVELOPMENT AS A CONTACT SPORT

ldquoBusiness development is a contact sportrdquo says Attorney Tarlow ldquoYou send your business to the last person with whom you had positive contact Whoever has the best strategy and the tools for developing and maintaining their contacts winsrdquo

ldquoIn the legal world as in other arenas contact with alumni delivers business referrals an important asset particularly in these times of slow or moderate growthrdquo Tarlow says ldquoPeople simply feel more confident hiring someone they know or someone personally recommendedrdquo

Alumni networks also help law firms track the progress of a former employeersquos career If the individual developed a specific expertise the firm requires it would have an opportunity to tap into the individualrsquos knowledge form a business alliance or perhaps lure the individual back

ldquoEmployers secure a competitive advantage when they are able to track their alumnirdquo he says In that regard Tarlow sees that a strong alumni network could help lower recruiting costs Firms that need to expand their staff with attorneys with specific skills and experience usually enlist the help of a recruiter at placement fees of 25 - or more depending on the position On an annual salary of $100000 the recruiter would get $25000 ldquoThatrsquos not insignificantrdquo Tarlow says

To understand the magnitude of the expense imagine that if a professional firm hires eight new staff members each year at a base salary of $100000 recruiter fees alone would total at least $200000

Excluding situations that require placement fees the average cost of replacing an employee is about $10000 per position according to the Employment Management Association The Society for Human Resources Management estimates the average cost of a rehire to be $5000 ndash and rehires tend to stay twice as long

On the other hand a firm can hire a former employee or candidate recommended by a former employee and save tens of thousands of dollars per hire Further studies show that new hires are 40 less productive than rehires during the first few months of employment Therefore rehiring former employees or enlisting the assistance of former employees to recruit new employees should not be ignored

Human Resource expert Arte Nathan New Products Thought Leader for Mellon HR Solutions advocates the creation of communities to build a companyrsquos success and sees alumni networks as facilitating that effort

ldquoBelonging to a corporate community makes sense for both the individual and the corporation When you facilitate people coming and going and assist your community in staying connected companies will be able to take advantage of great resources that would otherwise walk out the door and drop off the radar screenrdquo Nathan says

Nathan sees that industries experiencing growth or facing labor shortages such as healthcare would gain a competitive advantage via connections with a community of former employees However that advantage could be experienced by any organization whose success in the marketplace is a result of the quality of its workforce

ldquoThe important thing here is to build up communities of prospective employees current employees and former employees These communities can give your company a competitive edge by continuing to add value to your company in conventional -- and unconventional -- waysrdquo

Nathan points out that alumni include not just people at the start or middle of their careers but retirees Keeping in touch with this group is appropriate because most will maintain some kind of connection simply because of benefits and investment in the organization Companies that embrace a connection with their retirees will earn their loyalty and the opportunity to rely on the retiree as a source of information inspiration and knowledge Additionally the retiree may serve as a referral for new business and potential employees

In a report on ldquolost knowledgerdquo in the global chemical industry worldwide consulting firm Accenture discusses how the retirement or departure of senior scientists poses a costly and potentially devastating blow to chemical companies According to the February 2002 report these senior scientists had over the years saved their companies literally millions of dollars each because of their knowledge about certain processes that came from experience not textbooks

As these scientists retired or left the chemical company they took with them information that they had accumulated over the years

Accenture recommended that chemical companies maintain a tight relationship with their expertsndash even hiring them as consultants or retaining them on an as-needed basis -- to transfer information serve as mentors and be available as sources of knowledge and advice as needed

Research Fellow David DeLong writes ldquoIn the current economy it will be tempting for leaders to give in to the demands for short-term financial performance But savvy executives recognize that they also must champion more costly knowledge retention strategies because some of their units could be headed for a point of no return in a few yearsrdquo

The lesson could well be applied to many other knowledge-based industries

While itrsquos clear that alumni networks can play a key role in an organizationrsquos success itrsquos important to remember that not just any kind of network will do The costs of running a manual or unstructured alumni network can be high Alumni networks that automate repetitive tasks and shift the maintenance of contact information to former employees will deliver a return on your investment

The methods most companies have used to keep in touch with their alumni have until recently been primarily informal inefficient and left to individuals to create ndash rather than a company-wide initiative But as Tarlow says ldquoIf you donrsquot have the database or tools itrsquos very time-consuming Therersquos no immediate return on your investmentrdquo

Tarlow cites the act of sending a holiday card to former employees as a simple gesture that shows employees you remember them and valued their service It can have positive results as long as sending the card isnrsquot a time-consuming costly process

Automated alumni networks can also handle registration event management job postings and news publication with minimal staff intervention

ACTIVITIES CONTRIBUTING TO AN EFFECTIVE CORPORATE ALUMNI NETWORK

Organizations face three main challenges when managing their alumni hiring programs gaining the active participation of alumni in the network targeting re-recruiting efforts at the alumni segments most likely to drive quality of hire and monitoring the health of and returns from the network Listed below are a few guidelines that companies may wish to consider as they confront these challenges

Dr i v e A c t i v e Participation in the Ne t w ork

1 Highlight compelling value proposition for participation in the networkmdashOrganizations often spend a significant amount of timeresources creating their corporate alumni network but underinvest in marketing strategies to increase participation rates One method for driving interest in the initiative is to highlight the benefits of joining the network some of which include following

Access to a group that engages in social events professional training volunteering andor provides an opportunity for alumni to share information on jobs and careers as well as leads and references for business ventures

Discounts on products or services

2 Make employees aware of the corporate alumni network during the exit processmdashInternal analysis from organizations such as Ernst amp Young suggests that the vast majority of alumni return to the organization soon after their initial departure thus organizations may want to provide employees with the following information during the exit proces sign-up procedures network benefits and scope of the network (see page 3 for further details from Ernst amp Young alumnirecruiting outreach program)

Target the Al umni Segments Most Likel y to Dri ve Q uality of Hire

3 Focus on high-value corporate alumni segmentsmdashFocusing efforts on former employees who were top performers or those who demonstrated a strong commitment to the job or company helps ensure a higher quality of network members In addition some organizations extend the scope of their corporate alumni program to include those who were not permanent full-time employees such as interns or contractors The list below suggests employee segments to target for the program

Top performers who left voluntarily Individuals who occupied key positions Individuals with key skills contacts or experience Individuals leaving to pursue further education in disciplinescritical to company

operations Retirees who may wish to return to employment High-performing interns or contractors

Build a D a shboard to M easure O v e r all Program Success and Track A lumni S e gments that Generate Large Number of Qua l ity Re-hires

4 Build and monitor metrics specific to the alumni network programmdashBuilding a dashboard with program-specific qualitative and quantitative metrics helps companies to monitor the overall health of their network and also make principled decisions on where to over- or under-invest in the future (eg former high performing internscontractors may have a higher conversion rate than top performers who left voluntarily so companies would therefore host more events for this segment) A list of potential metrics is included in the table below

Table 1 Checklist of Alumni Network Metrics

Quantitative Metrics

Qualitative Metrics

9 Cost per hire of corporate alumni vs regular hires9 Time to fill for corporate alumni vs regular hires9 Number of corporate alumni entered in program database9 Number of corporate alumni hired9 Number of referrals made by corporate alumni9 Number of hires generated by corporate alumni referrals9 Retention rate for corporate alumni

9 Employee engagement levels of corporate alumni vs hires from other channels

9 Additional skills and experiences brought to the

organization as a result of rehiring corporate alumni

CASE STUDY

Alumni linked in to old firms

This is a summary of an article originally published by LM SIXEL in the Houston Chronicle on Feb 3rd 2010

Janet Roth wasnt looking for a new job But her neighbour a former colleague at Deloitte encouraged Roth to join the firms online network for former employees and retirees Roth had worked at Deloitte for seven years leaving in 1996 to join one of its clients Late one night Roth was scrolling through Deloittes alumni site and saw a job opening that sounded interesting She applied went through a streamlined interview process and rejoined Deloitte in 2007 She joined the network mostly for social reasons ldquobut I ended up with a jobrdquo said Roth who is now senior manager in the mergers and acquisitions group in Houston It used to be that when you walked out the door that was it The working relationship was over once you turned in your ID badge and collected your last paycheck

But many companies are reconsidering that strategy After all skilled employees arent that easy to find especially ones who know the corporate culture So companies have taken a page from social sites and launched their own alumni networks The online sites which typically are controlled by individual companies like Deloitte are a way for ex-employees to connect with their former bosses and former co-workers mdash and maybe boomerang back often with newly acquired skills

New skills

Its efficient said Cathy Clonts president of Alumni Web Services which designs alumni networks for corporate clients Members update their contact information and any new skills they acquire Companies in turn can data-mine to find the skills theyre looking for

Its also a way a company can promote its own brand to a group that is already loyal Clonts said Deloitte likes to refer to the members of its AlumNet as ldquocolleagues for liferdquo said Coleman Rowland a partner in energy and resource practices in Houston He said Deloittes alumni network has become such an important business imperative that the firm has seven regional alumni network coordinators around the nation who keep up with the entries Of the 100000 alumni nationwide who left the firm in good standing and are eligible to join Deloittes network 56000 have registered Of those 4000 are in Houston

No more ledgers

In the past the firm kept up with its former employees by updating addresses in ledgers and spreadsheets But that wasnt easy especially when people move so frequently Roth for example moved from Houston to Minnesota to Florida and back to Houston in a series of corporate transfers ldquoDeloitte lost track of me raising three kidsrdquo she said with a laugh It took

running into Rowland who mentioned the network for Roth to reconnect with her old firm Clients and other ldquofriends of the firmrdquo cant get onto the network to troll for possible job candidates but the firm does list its job openings as a courtesy Thats how one of its clients a non-profit found its controller Rowland said And it didnt have to pay any recruiting fees

The Deloitte network which is more LinkedIn than Facebook isnt set up as a chat site or a place to extol the pleasures of retirement Members however can send e-mails to each other through the Deloitte server ldquoIts a way to really expand your networkrdquo Roth said

CONCLUSION

A company alumni network is made to remain in contact and maintain relationships with former employees This offers organizations a new resource for enhancing organizational capabilities Though making formal corporate alumni networks has recently become very important they have been loosely formed and utilized since as long as there have been companies and employees who leave them ndash by letter mailings volunteer groups gatherings etc

Adding to this social networking is redefining the way we interact with colleagues corporate alumni and business partners Forward-thinking employers recognize that investing in life-long relationships through comprehensive alumni programs carries measurable value in recruitment employment branding and new business development

Companies have realised that alumni provide an inside track to new business opportunities It can also be highlighted that alumni who are re-hired stay longer and cost less to onboard than talent new to the organization Also Alumni provide great referrals and are excellent often proactive ambassadors for the company brand

In short these networks are very beneficial to the companies as well as the alumnis due to which its becoming more popular and very important Few companies that have seen the trend and adapted to it are ndash Deloitte Ernst amp Young McKinsey amp Company and Bain amp Company

Thus Alumni networks are seen as

- A key potential driver of competitive advantage for employers- A rich untapped source of innovation human talent and business relationships- Still emergent (in most sectors) and hence demanding clear management focus

AKNOWLEDGEMENT

We would like to thank Ms Yesha Sheth for giving us this topic We would also like to thank her for her guidance and support throughout the project

BIBLIOGRAPHY

wwwselectmindscom

wwwclcexecutiveboardcom

wwwxingcom

wwwfirsttuesdaych

wwwwikipediacom

wwwencyclopediacom

years in a few cases for decades but in recent years they have penetrated several industries particularly among large multinationals

Considering company-initiated alumni networks the commonly mentioned elements involved in realizing the networkrsquos purpose include (1) securing executive support (2) defining network participants (3) determining content and information to be shared and (4) creating the channel(s) by which connection with alums will be maintained (Canabou 2002 Kirsner 2002 Stewart 2003)

First gaining buy-in from company executives is vital to ensure the network initiative is supported with adequate resources and taken seriously by those both inside and outside of the organization Such executive support will encourage meaningful participation by those involved in the network through exhibiting company values towards its human resources

Second establishing who is to participate in the alumni network involves two different issues (1) deciding on network management being performed in-house or contracted out and (2) defining which ex-employees are eligible to participate Available company resources along with the anticipated size of the alumni network are defining variables as to how the network will be managed (ie in-house or outsourced) Regardless appointment of internal persons to be responsible for the design and delivery of the network or oversight of outsourced partners is necessary (Stewart 2003) Outsourcing through the use of a specialized network services firm such as Bernard C Harris Publishing Corporate Alumni and SelectMinds is one efficient method to manage onersquos network via a web-based platform (Kirsner 2002)

To determine which ex-employees to invite to participate in the alumni network several criteria are commonly used The employeersquos tenure at the company and reason(s) for departure play a significant role in determining if an invitation to the corporate alumni network should be offered (Stewart 2003) As employees vary in terms of their knowledge skills and abilities they too vary regarding their strategic importance to the firm (Lepak amp Snell 1999) Inviting only departing employees considered to be part of an organizationrsquos core workforce workers directly contributing to the competitive advantage of the organization (Delery amp Shaw 2001) would result in higher potential alumni contributions to the firm In addition the nature of the alumni base whether it is companywide or division-specific often acts as a selection criterion for network participation (Stewart)

Third to encourage participation in the network and foster symmetric ties Canabou (2002) states there must be valuable information and activities offered in order for ex-employees to remain engaged Access to an up-to-date alumni directory for the purpose of tapping new job opportunities is noted as ldquothe number one benefitrdquo of alumni networks (Canabou) In addition other meaningful resources to make available include job boards training classes job referrals management resources discussion boards alumni and company news along with cocktail parties

to facilitate further networking (Canabou 2002 Kirsner 2002 Stewart 2003) Gaining input from the alumni base is also important to ensure their interests are being met and to in turn foster continued engagement and connectedness to the organization (Canabou 2002)

Fourth the decision as to how the organization will remain connected to its former employees is an important one The use of a web-based system allows for easy and efficient management of alumni contact information and general data Alumni access through a web home page also offers practical sense in addition to contact via email e-newsletters and mail Events also represent a valuable means for maintaining connections to alumni such as alumni networking parties or corporate charity initiatives Considering the nature of the alumni base and their comfort level with technology older ex-employees may be less likely to engage on-line and may require more customized delivery such as mailings of alumni communications

With the ultimate goal of establishing an alumni network to help improve the companyrsquos business (Stewart 2003) there are benefits to be accrued to both the participating alumni and the host organization For ex-employees maintaining good-standing with former employers makes good sense Alumni network participation provides access to information sources that may prove to be rich sources for employment andor business opportunities For the sponsoring organization an alumni network can serve as a vital connection to tacit knowledge held in the minds of former employees provide access to a talent pool for rehire or contract work and serve as a source of referrals and new business partners (Canabou 2002 DeLong 2004 Kirsner 2002 Stewart 2003) Further consideration of the potential gains that may be acquired by an organization via their alumni network such as employee recruitment workforce flexibility knowledge retention and organizational culture are explored next In light of the dynamic and challenging environment facing organizations today examination of new avenues to leverage organizational resources is vital to remaining a viable competitor with above average profits

ALUMNI NETWORKS AND EMPLOYEE RECRUITMENT

Building and maintaining a strong human resource capability within an organization starts with the attraction of high quality good fit potential employees Recruitment serves as a primary means of attracting future employees along with targeting specific applicant pools and offering signing incentives (Rynes amp Barber 1990) Key to a successful recruitment strategy are the sources used by organizations to recruit potential employees (Noe et al 2006) The use of internal sources defined as filling vacancies with current employees offers several advantages including (1) the firmrsquos familiarity with internal candidates (2) the applicantrsquos knowledge of the firm and (3) the lower recruiting costs (Noe et al 2006) Recruiting from an alumni pool would be expected to generate the same advantages as promoting from within Yet additional benefits may also be accrued As former employees have gone on to gain additional knowledge skills abilities and insights by way of other experiences these potential rehires represent potentially higher octane employees able to generate performance results better and faster than a new hire without previous experience with the firm Organizational alums may also serve as valuable referral sources given their knowledge of ldquogood fitrdquo with the former employer and their interest in maintaining connections to those within that organization

In light of an organizationrsquos specific labor needs and anticipated tight labor markets organizations can benefit from maintaining a bond with former employees Stewart (2003) suggests employers could be faced with an estimated 25 annual turnover of employees as labor trends indicate workers are likely to change jobs up to eight times in their working careers according to the US Bureau of Labor Statistics Hence keeping in touch with former employees through an alumni network represents a valuable recruitment tool for organizational success

WHY DO COMPANIES MAINTAIN CORPORATE ALUMNI NETWORKS

Organizations typically build corporate alumni networks with the sole purpose of re-recruiting however investing in such a network can bring ancillary benefits as well for example an increased number of high-quality referrals from alumni in the network and new business opportunities

1048707 High-performing corporate alumni represent a valuable talent pool mdashIn a 2005 survey of 100 US organizations 54 of respondents stated that they had actively sought to rehire former employees because they bring the following benefits123

Quick time-to-productivitymdashThe onboarding period and time-to-productivity is relatively short for alumni as they are already familiar with the companyrsquos people politics and processes

Experience and insight from other organizationsmdashReturning corporate alumni often bring back new skills and competencies that can make them more effective in their roles or a new perspective that enables them to see processsystem inefficiencies in their alumni employer They may also bring information about how competitors do business

1048707 Corporate alumni are relatively cost-effective to rehire mdashPursuing corporate alumni rehires may be a cost effective supplement to using contingency search firms particularly for highly technical or specialized positions where talent is in high demand Organizations with an established corporate alumni network may not need to hire an external party for assistance with the first phase of the recruitment cycle (eg generating ldquonamesrdquo)

1048707 Corporate alumni can be a good source of candidate referrals mdashEven if they do not return as employees corporate alumni who feel connected to the organization may be more likely to refer other potential hires With their understanding of the corporate culture and certain job roles they are likely to recommend quality referrals with strong organization and job fit 4 Strategies for converting these referrals into hires include building a competitive employment value proposition (EVP) and leveraging current employees to communicate the EVP Further Council research on the importance of crafting a compelling EVP is available in our study titled Attracting and Retaining Critical Talent Segments5

1048707 Alumni provide new business opportunities mdashOrganizations such as McKinsey amp Company and Bain amp Company report that alumni often provide new business opportunities through some of the activities listed below

Purchasing goods or services from their former organization Facilitating strategic alliances between their former employer and their current

employer Referring (directly or indirectly) potential customers resources and vendors to their

former employer

BUSINESS DEVELOPMENT AS A CONTACT SPORT

ldquoBusiness development is a contact sportrdquo says Attorney Tarlow ldquoYou send your business to the last person with whom you had positive contact Whoever has the best strategy and the tools for developing and maintaining their contacts winsrdquo

ldquoIn the legal world as in other arenas contact with alumni delivers business referrals an important asset particularly in these times of slow or moderate growthrdquo Tarlow says ldquoPeople simply feel more confident hiring someone they know or someone personally recommendedrdquo

Alumni networks also help law firms track the progress of a former employeersquos career If the individual developed a specific expertise the firm requires it would have an opportunity to tap into the individualrsquos knowledge form a business alliance or perhaps lure the individual back

ldquoEmployers secure a competitive advantage when they are able to track their alumnirdquo he says In that regard Tarlow sees that a strong alumni network could help lower recruiting costs Firms that need to expand their staff with attorneys with specific skills and experience usually enlist the help of a recruiter at placement fees of 25 - or more depending on the position On an annual salary of $100000 the recruiter would get $25000 ldquoThatrsquos not insignificantrdquo Tarlow says

To understand the magnitude of the expense imagine that if a professional firm hires eight new staff members each year at a base salary of $100000 recruiter fees alone would total at least $200000

Excluding situations that require placement fees the average cost of replacing an employee is about $10000 per position according to the Employment Management Association The Society for Human Resources Management estimates the average cost of a rehire to be $5000 ndash and rehires tend to stay twice as long

On the other hand a firm can hire a former employee or candidate recommended by a former employee and save tens of thousands of dollars per hire Further studies show that new hires are 40 less productive than rehires during the first few months of employment Therefore rehiring former employees or enlisting the assistance of former employees to recruit new employees should not be ignored

Human Resource expert Arte Nathan New Products Thought Leader for Mellon HR Solutions advocates the creation of communities to build a companyrsquos success and sees alumni networks as facilitating that effort

ldquoBelonging to a corporate community makes sense for both the individual and the corporation When you facilitate people coming and going and assist your community in staying connected companies will be able to take advantage of great resources that would otherwise walk out the door and drop off the radar screenrdquo Nathan says

Nathan sees that industries experiencing growth or facing labor shortages such as healthcare would gain a competitive advantage via connections with a community of former employees However that advantage could be experienced by any organization whose success in the marketplace is a result of the quality of its workforce

ldquoThe important thing here is to build up communities of prospective employees current employees and former employees These communities can give your company a competitive edge by continuing to add value to your company in conventional -- and unconventional -- waysrdquo

Nathan points out that alumni include not just people at the start or middle of their careers but retirees Keeping in touch with this group is appropriate because most will maintain some kind of connection simply because of benefits and investment in the organization Companies that embrace a connection with their retirees will earn their loyalty and the opportunity to rely on the retiree as a source of information inspiration and knowledge Additionally the retiree may serve as a referral for new business and potential employees

In a report on ldquolost knowledgerdquo in the global chemical industry worldwide consulting firm Accenture discusses how the retirement or departure of senior scientists poses a costly and potentially devastating blow to chemical companies According to the February 2002 report these senior scientists had over the years saved their companies literally millions of dollars each because of their knowledge about certain processes that came from experience not textbooks

As these scientists retired or left the chemical company they took with them information that they had accumulated over the years

Accenture recommended that chemical companies maintain a tight relationship with their expertsndash even hiring them as consultants or retaining them on an as-needed basis -- to transfer information serve as mentors and be available as sources of knowledge and advice as needed

Research Fellow David DeLong writes ldquoIn the current economy it will be tempting for leaders to give in to the demands for short-term financial performance But savvy executives recognize that they also must champion more costly knowledge retention strategies because some of their units could be headed for a point of no return in a few yearsrdquo

The lesson could well be applied to many other knowledge-based industries

While itrsquos clear that alumni networks can play a key role in an organizationrsquos success itrsquos important to remember that not just any kind of network will do The costs of running a manual or unstructured alumni network can be high Alumni networks that automate repetitive tasks and shift the maintenance of contact information to former employees will deliver a return on your investment

The methods most companies have used to keep in touch with their alumni have until recently been primarily informal inefficient and left to individuals to create ndash rather than a company-wide initiative But as Tarlow says ldquoIf you donrsquot have the database or tools itrsquos very time-consuming Therersquos no immediate return on your investmentrdquo

Tarlow cites the act of sending a holiday card to former employees as a simple gesture that shows employees you remember them and valued their service It can have positive results as long as sending the card isnrsquot a time-consuming costly process

Automated alumni networks can also handle registration event management job postings and news publication with minimal staff intervention

ACTIVITIES CONTRIBUTING TO AN EFFECTIVE CORPORATE ALUMNI NETWORK

Organizations face three main challenges when managing their alumni hiring programs gaining the active participation of alumni in the network targeting re-recruiting efforts at the alumni segments most likely to drive quality of hire and monitoring the health of and returns from the network Listed below are a few guidelines that companies may wish to consider as they confront these challenges

Dr i v e A c t i v e Participation in the Ne t w ork

1 Highlight compelling value proposition for participation in the networkmdashOrganizations often spend a significant amount of timeresources creating their corporate alumni network but underinvest in marketing strategies to increase participation rates One method for driving interest in the initiative is to highlight the benefits of joining the network some of which include following

Access to a group that engages in social events professional training volunteering andor provides an opportunity for alumni to share information on jobs and careers as well as leads and references for business ventures

Discounts on products or services

2 Make employees aware of the corporate alumni network during the exit processmdashInternal analysis from organizations such as Ernst amp Young suggests that the vast majority of alumni return to the organization soon after their initial departure thus organizations may want to provide employees with the following information during the exit proces sign-up procedures network benefits and scope of the network (see page 3 for further details from Ernst amp Young alumnirecruiting outreach program)

Target the Al umni Segments Most Likel y to Dri ve Q uality of Hire

3 Focus on high-value corporate alumni segmentsmdashFocusing efforts on former employees who were top performers or those who demonstrated a strong commitment to the job or company helps ensure a higher quality of network members In addition some organizations extend the scope of their corporate alumni program to include those who were not permanent full-time employees such as interns or contractors The list below suggests employee segments to target for the program

Top performers who left voluntarily Individuals who occupied key positions Individuals with key skills contacts or experience Individuals leaving to pursue further education in disciplinescritical to company

operations Retirees who may wish to return to employment High-performing interns or contractors

Build a D a shboard to M easure O v e r all Program Success and Track A lumni S e gments that Generate Large Number of Qua l ity Re-hires

4 Build and monitor metrics specific to the alumni network programmdashBuilding a dashboard with program-specific qualitative and quantitative metrics helps companies to monitor the overall health of their network and also make principled decisions on where to over- or under-invest in the future (eg former high performing internscontractors may have a higher conversion rate than top performers who left voluntarily so companies would therefore host more events for this segment) A list of potential metrics is included in the table below

Table 1 Checklist of Alumni Network Metrics

Quantitative Metrics

Qualitative Metrics

9 Cost per hire of corporate alumni vs regular hires9 Time to fill for corporate alumni vs regular hires9 Number of corporate alumni entered in program database9 Number of corporate alumni hired9 Number of referrals made by corporate alumni9 Number of hires generated by corporate alumni referrals9 Retention rate for corporate alumni

9 Employee engagement levels of corporate alumni vs hires from other channels

9 Additional skills and experiences brought to the

organization as a result of rehiring corporate alumni

CASE STUDY

Alumni linked in to old firms

This is a summary of an article originally published by LM SIXEL in the Houston Chronicle on Feb 3rd 2010

Janet Roth wasnt looking for a new job But her neighbour a former colleague at Deloitte encouraged Roth to join the firms online network for former employees and retirees Roth had worked at Deloitte for seven years leaving in 1996 to join one of its clients Late one night Roth was scrolling through Deloittes alumni site and saw a job opening that sounded interesting She applied went through a streamlined interview process and rejoined Deloitte in 2007 She joined the network mostly for social reasons ldquobut I ended up with a jobrdquo said Roth who is now senior manager in the mergers and acquisitions group in Houston It used to be that when you walked out the door that was it The working relationship was over once you turned in your ID badge and collected your last paycheck

But many companies are reconsidering that strategy After all skilled employees arent that easy to find especially ones who know the corporate culture So companies have taken a page from social sites and launched their own alumni networks The online sites which typically are controlled by individual companies like Deloitte are a way for ex-employees to connect with their former bosses and former co-workers mdash and maybe boomerang back often with newly acquired skills

New skills

Its efficient said Cathy Clonts president of Alumni Web Services which designs alumni networks for corporate clients Members update their contact information and any new skills they acquire Companies in turn can data-mine to find the skills theyre looking for

Its also a way a company can promote its own brand to a group that is already loyal Clonts said Deloitte likes to refer to the members of its AlumNet as ldquocolleagues for liferdquo said Coleman Rowland a partner in energy and resource practices in Houston He said Deloittes alumni network has become such an important business imperative that the firm has seven regional alumni network coordinators around the nation who keep up with the entries Of the 100000 alumni nationwide who left the firm in good standing and are eligible to join Deloittes network 56000 have registered Of those 4000 are in Houston

No more ledgers

In the past the firm kept up with its former employees by updating addresses in ledgers and spreadsheets But that wasnt easy especially when people move so frequently Roth for example moved from Houston to Minnesota to Florida and back to Houston in a series of corporate transfers ldquoDeloitte lost track of me raising three kidsrdquo she said with a laugh It took

running into Rowland who mentioned the network for Roth to reconnect with her old firm Clients and other ldquofriends of the firmrdquo cant get onto the network to troll for possible job candidates but the firm does list its job openings as a courtesy Thats how one of its clients a non-profit found its controller Rowland said And it didnt have to pay any recruiting fees

The Deloitte network which is more LinkedIn than Facebook isnt set up as a chat site or a place to extol the pleasures of retirement Members however can send e-mails to each other through the Deloitte server ldquoIts a way to really expand your networkrdquo Roth said

CONCLUSION

A company alumni network is made to remain in contact and maintain relationships with former employees This offers organizations a new resource for enhancing organizational capabilities Though making formal corporate alumni networks has recently become very important they have been loosely formed and utilized since as long as there have been companies and employees who leave them ndash by letter mailings volunteer groups gatherings etc

Adding to this social networking is redefining the way we interact with colleagues corporate alumni and business partners Forward-thinking employers recognize that investing in life-long relationships through comprehensive alumni programs carries measurable value in recruitment employment branding and new business development

Companies have realised that alumni provide an inside track to new business opportunities It can also be highlighted that alumni who are re-hired stay longer and cost less to onboard than talent new to the organization Also Alumni provide great referrals and are excellent often proactive ambassadors for the company brand

In short these networks are very beneficial to the companies as well as the alumnis due to which its becoming more popular and very important Few companies that have seen the trend and adapted to it are ndash Deloitte Ernst amp Young McKinsey amp Company and Bain amp Company

Thus Alumni networks are seen as

- A key potential driver of competitive advantage for employers- A rich untapped source of innovation human talent and business relationships- Still emergent (in most sectors) and hence demanding clear management focus

AKNOWLEDGEMENT

We would like to thank Ms Yesha Sheth for giving us this topic We would also like to thank her for her guidance and support throughout the project

BIBLIOGRAPHY

wwwselectmindscom

wwwclcexecutiveboardcom

wwwxingcom

wwwfirsttuesdaych

wwwwikipediacom

wwwencyclopediacom

to facilitate further networking (Canabou 2002 Kirsner 2002 Stewart 2003) Gaining input from the alumni base is also important to ensure their interests are being met and to in turn foster continued engagement and connectedness to the organization (Canabou 2002)

Fourth the decision as to how the organization will remain connected to its former employees is an important one The use of a web-based system allows for easy and efficient management of alumni contact information and general data Alumni access through a web home page also offers practical sense in addition to contact via email e-newsletters and mail Events also represent a valuable means for maintaining connections to alumni such as alumni networking parties or corporate charity initiatives Considering the nature of the alumni base and their comfort level with technology older ex-employees may be less likely to engage on-line and may require more customized delivery such as mailings of alumni communications

With the ultimate goal of establishing an alumni network to help improve the companyrsquos business (Stewart 2003) there are benefits to be accrued to both the participating alumni and the host organization For ex-employees maintaining good-standing with former employers makes good sense Alumni network participation provides access to information sources that may prove to be rich sources for employment andor business opportunities For the sponsoring organization an alumni network can serve as a vital connection to tacit knowledge held in the minds of former employees provide access to a talent pool for rehire or contract work and serve as a source of referrals and new business partners (Canabou 2002 DeLong 2004 Kirsner 2002 Stewart 2003) Further consideration of the potential gains that may be acquired by an organization via their alumni network such as employee recruitment workforce flexibility knowledge retention and organizational culture are explored next In light of the dynamic and challenging environment facing organizations today examination of new avenues to leverage organizational resources is vital to remaining a viable competitor with above average profits

ALUMNI NETWORKS AND EMPLOYEE RECRUITMENT

Building and maintaining a strong human resource capability within an organization starts with the attraction of high quality good fit potential employees Recruitment serves as a primary means of attracting future employees along with targeting specific applicant pools and offering signing incentives (Rynes amp Barber 1990) Key to a successful recruitment strategy are the sources used by organizations to recruit potential employees (Noe et al 2006) The use of internal sources defined as filling vacancies with current employees offers several advantages including (1) the firmrsquos familiarity with internal candidates (2) the applicantrsquos knowledge of the firm and (3) the lower recruiting costs (Noe et al 2006) Recruiting from an alumni pool would be expected to generate the same advantages as promoting from within Yet additional benefits may also be accrued As former employees have gone on to gain additional knowledge skills abilities and insights by way of other experiences these potential rehires represent potentially higher octane employees able to generate performance results better and faster than a new hire without previous experience with the firm Organizational alums may also serve as valuable referral sources given their knowledge of ldquogood fitrdquo with the former employer and their interest in maintaining connections to those within that organization

In light of an organizationrsquos specific labor needs and anticipated tight labor markets organizations can benefit from maintaining a bond with former employees Stewart (2003) suggests employers could be faced with an estimated 25 annual turnover of employees as labor trends indicate workers are likely to change jobs up to eight times in their working careers according to the US Bureau of Labor Statistics Hence keeping in touch with former employees through an alumni network represents a valuable recruitment tool for organizational success

WHY DO COMPANIES MAINTAIN CORPORATE ALUMNI NETWORKS

Organizations typically build corporate alumni networks with the sole purpose of re-recruiting however investing in such a network can bring ancillary benefits as well for example an increased number of high-quality referrals from alumni in the network and new business opportunities

1048707 High-performing corporate alumni represent a valuable talent pool mdashIn a 2005 survey of 100 US organizations 54 of respondents stated that they had actively sought to rehire former employees because they bring the following benefits123

Quick time-to-productivitymdashThe onboarding period and time-to-productivity is relatively short for alumni as they are already familiar with the companyrsquos people politics and processes

Experience and insight from other organizationsmdashReturning corporate alumni often bring back new skills and competencies that can make them more effective in their roles or a new perspective that enables them to see processsystem inefficiencies in their alumni employer They may also bring information about how competitors do business

1048707 Corporate alumni are relatively cost-effective to rehire mdashPursuing corporate alumni rehires may be a cost effective supplement to using contingency search firms particularly for highly technical or specialized positions where talent is in high demand Organizations with an established corporate alumni network may not need to hire an external party for assistance with the first phase of the recruitment cycle (eg generating ldquonamesrdquo)

1048707 Corporate alumni can be a good source of candidate referrals mdashEven if they do not return as employees corporate alumni who feel connected to the organization may be more likely to refer other potential hires With their understanding of the corporate culture and certain job roles they are likely to recommend quality referrals with strong organization and job fit 4 Strategies for converting these referrals into hires include building a competitive employment value proposition (EVP) and leveraging current employees to communicate the EVP Further Council research on the importance of crafting a compelling EVP is available in our study titled Attracting and Retaining Critical Talent Segments5

1048707 Alumni provide new business opportunities mdashOrganizations such as McKinsey amp Company and Bain amp Company report that alumni often provide new business opportunities through some of the activities listed below

Purchasing goods or services from their former organization Facilitating strategic alliances between their former employer and their current

employer Referring (directly or indirectly) potential customers resources and vendors to their

former employer

BUSINESS DEVELOPMENT AS A CONTACT SPORT

ldquoBusiness development is a contact sportrdquo says Attorney Tarlow ldquoYou send your business to the last person with whom you had positive contact Whoever has the best strategy and the tools for developing and maintaining their contacts winsrdquo

ldquoIn the legal world as in other arenas contact with alumni delivers business referrals an important asset particularly in these times of slow or moderate growthrdquo Tarlow says ldquoPeople simply feel more confident hiring someone they know or someone personally recommendedrdquo

Alumni networks also help law firms track the progress of a former employeersquos career If the individual developed a specific expertise the firm requires it would have an opportunity to tap into the individualrsquos knowledge form a business alliance or perhaps lure the individual back

ldquoEmployers secure a competitive advantage when they are able to track their alumnirdquo he says In that regard Tarlow sees that a strong alumni network could help lower recruiting costs Firms that need to expand their staff with attorneys with specific skills and experience usually enlist the help of a recruiter at placement fees of 25 - or more depending on the position On an annual salary of $100000 the recruiter would get $25000 ldquoThatrsquos not insignificantrdquo Tarlow says

To understand the magnitude of the expense imagine that if a professional firm hires eight new staff members each year at a base salary of $100000 recruiter fees alone would total at least $200000

Excluding situations that require placement fees the average cost of replacing an employee is about $10000 per position according to the Employment Management Association The Society for Human Resources Management estimates the average cost of a rehire to be $5000 ndash and rehires tend to stay twice as long

On the other hand a firm can hire a former employee or candidate recommended by a former employee and save tens of thousands of dollars per hire Further studies show that new hires are 40 less productive than rehires during the first few months of employment Therefore rehiring former employees or enlisting the assistance of former employees to recruit new employees should not be ignored

Human Resource expert Arte Nathan New Products Thought Leader for Mellon HR Solutions advocates the creation of communities to build a companyrsquos success and sees alumni networks as facilitating that effort

ldquoBelonging to a corporate community makes sense for both the individual and the corporation When you facilitate people coming and going and assist your community in staying connected companies will be able to take advantage of great resources that would otherwise walk out the door and drop off the radar screenrdquo Nathan says

Nathan sees that industries experiencing growth or facing labor shortages such as healthcare would gain a competitive advantage via connections with a community of former employees However that advantage could be experienced by any organization whose success in the marketplace is a result of the quality of its workforce

ldquoThe important thing here is to build up communities of prospective employees current employees and former employees These communities can give your company a competitive edge by continuing to add value to your company in conventional -- and unconventional -- waysrdquo

Nathan points out that alumni include not just people at the start or middle of their careers but retirees Keeping in touch with this group is appropriate because most will maintain some kind of connection simply because of benefits and investment in the organization Companies that embrace a connection with their retirees will earn their loyalty and the opportunity to rely on the retiree as a source of information inspiration and knowledge Additionally the retiree may serve as a referral for new business and potential employees

In a report on ldquolost knowledgerdquo in the global chemical industry worldwide consulting firm Accenture discusses how the retirement or departure of senior scientists poses a costly and potentially devastating blow to chemical companies According to the February 2002 report these senior scientists had over the years saved their companies literally millions of dollars each because of their knowledge about certain processes that came from experience not textbooks

As these scientists retired or left the chemical company they took with them information that they had accumulated over the years

Accenture recommended that chemical companies maintain a tight relationship with their expertsndash even hiring them as consultants or retaining them on an as-needed basis -- to transfer information serve as mentors and be available as sources of knowledge and advice as needed

Research Fellow David DeLong writes ldquoIn the current economy it will be tempting for leaders to give in to the demands for short-term financial performance But savvy executives recognize that they also must champion more costly knowledge retention strategies because some of their units could be headed for a point of no return in a few yearsrdquo

The lesson could well be applied to many other knowledge-based industries

While itrsquos clear that alumni networks can play a key role in an organizationrsquos success itrsquos important to remember that not just any kind of network will do The costs of running a manual or unstructured alumni network can be high Alumni networks that automate repetitive tasks and shift the maintenance of contact information to former employees will deliver a return on your investment

The methods most companies have used to keep in touch with their alumni have until recently been primarily informal inefficient and left to individuals to create ndash rather than a company-wide initiative But as Tarlow says ldquoIf you donrsquot have the database or tools itrsquos very time-consuming Therersquos no immediate return on your investmentrdquo

Tarlow cites the act of sending a holiday card to former employees as a simple gesture that shows employees you remember them and valued their service It can have positive results as long as sending the card isnrsquot a time-consuming costly process

Automated alumni networks can also handle registration event management job postings and news publication with minimal staff intervention

ACTIVITIES CONTRIBUTING TO AN EFFECTIVE CORPORATE ALUMNI NETWORK

Organizations face three main challenges when managing their alumni hiring programs gaining the active participation of alumni in the network targeting re-recruiting efforts at the alumni segments most likely to drive quality of hire and monitoring the health of and returns from the network Listed below are a few guidelines that companies may wish to consider as they confront these challenges

Dr i v e A c t i v e Participation in the Ne t w ork

1 Highlight compelling value proposition for participation in the networkmdashOrganizations often spend a significant amount of timeresources creating their corporate alumni network but underinvest in marketing strategies to increase participation rates One method for driving interest in the initiative is to highlight the benefits of joining the network some of which include following

Access to a group that engages in social events professional training volunteering andor provides an opportunity for alumni to share information on jobs and careers as well as leads and references for business ventures

Discounts on products or services

2 Make employees aware of the corporate alumni network during the exit processmdashInternal analysis from organizations such as Ernst amp Young suggests that the vast majority of alumni return to the organization soon after their initial departure thus organizations may want to provide employees with the following information during the exit proces sign-up procedures network benefits and scope of the network (see page 3 for further details from Ernst amp Young alumnirecruiting outreach program)

Target the Al umni Segments Most Likel y to Dri ve Q uality of Hire

3 Focus on high-value corporate alumni segmentsmdashFocusing efforts on former employees who were top performers or those who demonstrated a strong commitment to the job or company helps ensure a higher quality of network members In addition some organizations extend the scope of their corporate alumni program to include those who were not permanent full-time employees such as interns or contractors The list below suggests employee segments to target for the program

Top performers who left voluntarily Individuals who occupied key positions Individuals with key skills contacts or experience Individuals leaving to pursue further education in disciplinescritical to company

operations Retirees who may wish to return to employment High-performing interns or contractors

Build a D a shboard to M easure O v e r all Program Success and Track A lumni S e gments that Generate Large Number of Qua l ity Re-hires

4 Build and monitor metrics specific to the alumni network programmdashBuilding a dashboard with program-specific qualitative and quantitative metrics helps companies to monitor the overall health of their network and also make principled decisions on where to over- or under-invest in the future (eg former high performing internscontractors may have a higher conversion rate than top performers who left voluntarily so companies would therefore host more events for this segment) A list of potential metrics is included in the table below

Table 1 Checklist of Alumni Network Metrics

Quantitative Metrics

Qualitative Metrics

9 Cost per hire of corporate alumni vs regular hires9 Time to fill for corporate alumni vs regular hires9 Number of corporate alumni entered in program database9 Number of corporate alumni hired9 Number of referrals made by corporate alumni9 Number of hires generated by corporate alumni referrals9 Retention rate for corporate alumni

9 Employee engagement levels of corporate alumni vs hires from other channels

9 Additional skills and experiences brought to the

organization as a result of rehiring corporate alumni

CASE STUDY

Alumni linked in to old firms

This is a summary of an article originally published by LM SIXEL in the Houston Chronicle on Feb 3rd 2010

Janet Roth wasnt looking for a new job But her neighbour a former colleague at Deloitte encouraged Roth to join the firms online network for former employees and retirees Roth had worked at Deloitte for seven years leaving in 1996 to join one of its clients Late one night Roth was scrolling through Deloittes alumni site and saw a job opening that sounded interesting She applied went through a streamlined interview process and rejoined Deloitte in 2007 She joined the network mostly for social reasons ldquobut I ended up with a jobrdquo said Roth who is now senior manager in the mergers and acquisitions group in Houston It used to be that when you walked out the door that was it The working relationship was over once you turned in your ID badge and collected your last paycheck

But many companies are reconsidering that strategy After all skilled employees arent that easy to find especially ones who know the corporate culture So companies have taken a page from social sites and launched their own alumni networks The online sites which typically are controlled by individual companies like Deloitte are a way for ex-employees to connect with their former bosses and former co-workers mdash and maybe boomerang back often with newly acquired skills

New skills

Its efficient said Cathy Clonts president of Alumni Web Services which designs alumni networks for corporate clients Members update their contact information and any new skills they acquire Companies in turn can data-mine to find the skills theyre looking for

Its also a way a company can promote its own brand to a group that is already loyal Clonts said Deloitte likes to refer to the members of its AlumNet as ldquocolleagues for liferdquo said Coleman Rowland a partner in energy and resource practices in Houston He said Deloittes alumni network has become such an important business imperative that the firm has seven regional alumni network coordinators around the nation who keep up with the entries Of the 100000 alumni nationwide who left the firm in good standing and are eligible to join Deloittes network 56000 have registered Of those 4000 are in Houston

No more ledgers

In the past the firm kept up with its former employees by updating addresses in ledgers and spreadsheets But that wasnt easy especially when people move so frequently Roth for example moved from Houston to Minnesota to Florida and back to Houston in a series of corporate transfers ldquoDeloitte lost track of me raising three kidsrdquo she said with a laugh It took

running into Rowland who mentioned the network for Roth to reconnect with her old firm Clients and other ldquofriends of the firmrdquo cant get onto the network to troll for possible job candidates but the firm does list its job openings as a courtesy Thats how one of its clients a non-profit found its controller Rowland said And it didnt have to pay any recruiting fees

The Deloitte network which is more LinkedIn than Facebook isnt set up as a chat site or a place to extol the pleasures of retirement Members however can send e-mails to each other through the Deloitte server ldquoIts a way to really expand your networkrdquo Roth said

CONCLUSION

A company alumni network is made to remain in contact and maintain relationships with former employees This offers organizations a new resource for enhancing organizational capabilities Though making formal corporate alumni networks has recently become very important they have been loosely formed and utilized since as long as there have been companies and employees who leave them ndash by letter mailings volunteer groups gatherings etc

Adding to this social networking is redefining the way we interact with colleagues corporate alumni and business partners Forward-thinking employers recognize that investing in life-long relationships through comprehensive alumni programs carries measurable value in recruitment employment branding and new business development

Companies have realised that alumni provide an inside track to new business opportunities It can also be highlighted that alumni who are re-hired stay longer and cost less to onboard than talent new to the organization Also Alumni provide great referrals and are excellent often proactive ambassadors for the company brand

In short these networks are very beneficial to the companies as well as the alumnis due to which its becoming more popular and very important Few companies that have seen the trend and adapted to it are ndash Deloitte Ernst amp Young McKinsey amp Company and Bain amp Company

Thus Alumni networks are seen as

- A key potential driver of competitive advantage for employers- A rich untapped source of innovation human talent and business relationships- Still emergent (in most sectors) and hence demanding clear management focus

AKNOWLEDGEMENT

We would like to thank Ms Yesha Sheth for giving us this topic We would also like to thank her for her guidance and support throughout the project

BIBLIOGRAPHY

wwwselectmindscom

wwwclcexecutiveboardcom

wwwxingcom

wwwfirsttuesdaych

wwwwikipediacom

wwwencyclopediacom

ALUMNI NETWORKS AND EMPLOYEE RECRUITMENT

Building and maintaining a strong human resource capability within an organization starts with the attraction of high quality good fit potential employees Recruitment serves as a primary means of attracting future employees along with targeting specific applicant pools and offering signing incentives (Rynes amp Barber 1990) Key to a successful recruitment strategy are the sources used by organizations to recruit potential employees (Noe et al 2006) The use of internal sources defined as filling vacancies with current employees offers several advantages including (1) the firmrsquos familiarity with internal candidates (2) the applicantrsquos knowledge of the firm and (3) the lower recruiting costs (Noe et al 2006) Recruiting from an alumni pool would be expected to generate the same advantages as promoting from within Yet additional benefits may also be accrued As former employees have gone on to gain additional knowledge skills abilities and insights by way of other experiences these potential rehires represent potentially higher octane employees able to generate performance results better and faster than a new hire without previous experience with the firm Organizational alums may also serve as valuable referral sources given their knowledge of ldquogood fitrdquo with the former employer and their interest in maintaining connections to those within that organization

In light of an organizationrsquos specific labor needs and anticipated tight labor markets organizations can benefit from maintaining a bond with former employees Stewart (2003) suggests employers could be faced with an estimated 25 annual turnover of employees as labor trends indicate workers are likely to change jobs up to eight times in their working careers according to the US Bureau of Labor Statistics Hence keeping in touch with former employees through an alumni network represents a valuable recruitment tool for organizational success

WHY DO COMPANIES MAINTAIN CORPORATE ALUMNI NETWORKS

Organizations typically build corporate alumni networks with the sole purpose of re-recruiting however investing in such a network can bring ancillary benefits as well for example an increased number of high-quality referrals from alumni in the network and new business opportunities

1048707 High-performing corporate alumni represent a valuable talent pool mdashIn a 2005 survey of 100 US organizations 54 of respondents stated that they had actively sought to rehire former employees because they bring the following benefits123

Quick time-to-productivitymdashThe onboarding period and time-to-productivity is relatively short for alumni as they are already familiar with the companyrsquos people politics and processes

Experience and insight from other organizationsmdashReturning corporate alumni often bring back new skills and competencies that can make them more effective in their roles or a new perspective that enables them to see processsystem inefficiencies in their alumni employer They may also bring information about how competitors do business

1048707 Corporate alumni are relatively cost-effective to rehire mdashPursuing corporate alumni rehires may be a cost effective supplement to using contingency search firms particularly for highly technical or specialized positions where talent is in high demand Organizations with an established corporate alumni network may not need to hire an external party for assistance with the first phase of the recruitment cycle (eg generating ldquonamesrdquo)

1048707 Corporate alumni can be a good source of candidate referrals mdashEven if they do not return as employees corporate alumni who feel connected to the organization may be more likely to refer other potential hires With their understanding of the corporate culture and certain job roles they are likely to recommend quality referrals with strong organization and job fit 4 Strategies for converting these referrals into hires include building a competitive employment value proposition (EVP) and leveraging current employees to communicate the EVP Further Council research on the importance of crafting a compelling EVP is available in our study titled Attracting and Retaining Critical Talent Segments5

1048707 Alumni provide new business opportunities mdashOrganizations such as McKinsey amp Company and Bain amp Company report that alumni often provide new business opportunities through some of the activities listed below

Purchasing goods or services from their former organization Facilitating strategic alliances between their former employer and their current

employer Referring (directly or indirectly) potential customers resources and vendors to their

former employer

BUSINESS DEVELOPMENT AS A CONTACT SPORT

ldquoBusiness development is a contact sportrdquo says Attorney Tarlow ldquoYou send your business to the last person with whom you had positive contact Whoever has the best strategy and the tools for developing and maintaining their contacts winsrdquo

ldquoIn the legal world as in other arenas contact with alumni delivers business referrals an important asset particularly in these times of slow or moderate growthrdquo Tarlow says ldquoPeople simply feel more confident hiring someone they know or someone personally recommendedrdquo

Alumni networks also help law firms track the progress of a former employeersquos career If the individual developed a specific expertise the firm requires it would have an opportunity to tap into the individualrsquos knowledge form a business alliance or perhaps lure the individual back

ldquoEmployers secure a competitive advantage when they are able to track their alumnirdquo he says In that regard Tarlow sees that a strong alumni network could help lower recruiting costs Firms that need to expand their staff with attorneys with specific skills and experience usually enlist the help of a recruiter at placement fees of 25 - or more depending on the position On an annual salary of $100000 the recruiter would get $25000 ldquoThatrsquos not insignificantrdquo Tarlow says

To understand the magnitude of the expense imagine that if a professional firm hires eight new staff members each year at a base salary of $100000 recruiter fees alone would total at least $200000

Excluding situations that require placement fees the average cost of replacing an employee is about $10000 per position according to the Employment Management Association The Society for Human Resources Management estimates the average cost of a rehire to be $5000 ndash and rehires tend to stay twice as long

On the other hand a firm can hire a former employee or candidate recommended by a former employee and save tens of thousands of dollars per hire Further studies show that new hires are 40 less productive than rehires during the first few months of employment Therefore rehiring former employees or enlisting the assistance of former employees to recruit new employees should not be ignored

Human Resource expert Arte Nathan New Products Thought Leader for Mellon HR Solutions advocates the creation of communities to build a companyrsquos success and sees alumni networks as facilitating that effort

ldquoBelonging to a corporate community makes sense for both the individual and the corporation When you facilitate people coming and going and assist your community in staying connected companies will be able to take advantage of great resources that would otherwise walk out the door and drop off the radar screenrdquo Nathan says

Nathan sees that industries experiencing growth or facing labor shortages such as healthcare would gain a competitive advantage via connections with a community of former employees However that advantage could be experienced by any organization whose success in the marketplace is a result of the quality of its workforce

ldquoThe important thing here is to build up communities of prospective employees current employees and former employees These communities can give your company a competitive edge by continuing to add value to your company in conventional -- and unconventional -- waysrdquo

Nathan points out that alumni include not just people at the start or middle of their careers but retirees Keeping in touch with this group is appropriate because most will maintain some kind of connection simply because of benefits and investment in the organization Companies that embrace a connection with their retirees will earn their loyalty and the opportunity to rely on the retiree as a source of information inspiration and knowledge Additionally the retiree may serve as a referral for new business and potential employees

In a report on ldquolost knowledgerdquo in the global chemical industry worldwide consulting firm Accenture discusses how the retirement or departure of senior scientists poses a costly and potentially devastating blow to chemical companies According to the February 2002 report these senior scientists had over the years saved their companies literally millions of dollars each because of their knowledge about certain processes that came from experience not textbooks

As these scientists retired or left the chemical company they took with them information that they had accumulated over the years

Accenture recommended that chemical companies maintain a tight relationship with their expertsndash even hiring them as consultants or retaining them on an as-needed basis -- to transfer information serve as mentors and be available as sources of knowledge and advice as needed

Research Fellow David DeLong writes ldquoIn the current economy it will be tempting for leaders to give in to the demands for short-term financial performance But savvy executives recognize that they also must champion more costly knowledge retention strategies because some of their units could be headed for a point of no return in a few yearsrdquo

The lesson could well be applied to many other knowledge-based industries

While itrsquos clear that alumni networks can play a key role in an organizationrsquos success itrsquos important to remember that not just any kind of network will do The costs of running a manual or unstructured alumni network can be high Alumni networks that automate repetitive tasks and shift the maintenance of contact information to former employees will deliver a return on your investment

The methods most companies have used to keep in touch with their alumni have until recently been primarily informal inefficient and left to individuals to create ndash rather than a company-wide initiative But as Tarlow says ldquoIf you donrsquot have the database or tools itrsquos very time-consuming Therersquos no immediate return on your investmentrdquo

Tarlow cites the act of sending a holiday card to former employees as a simple gesture that shows employees you remember them and valued their service It can have positive results as long as sending the card isnrsquot a time-consuming costly process

Automated alumni networks can also handle registration event management job postings and news publication with minimal staff intervention

ACTIVITIES CONTRIBUTING TO AN EFFECTIVE CORPORATE ALUMNI NETWORK

Organizations face three main challenges when managing their alumni hiring programs gaining the active participation of alumni in the network targeting re-recruiting efforts at the alumni segments most likely to drive quality of hire and monitoring the health of and returns from the network Listed below are a few guidelines that companies may wish to consider as they confront these challenges

Dr i v e A c t i v e Participation in the Ne t w ork

1 Highlight compelling value proposition for participation in the networkmdashOrganizations often spend a significant amount of timeresources creating their corporate alumni network but underinvest in marketing strategies to increase participation rates One method for driving interest in the initiative is to highlight the benefits of joining the network some of which include following

Access to a group that engages in social events professional training volunteering andor provides an opportunity for alumni to share information on jobs and careers as well as leads and references for business ventures

Discounts on products or services

2 Make employees aware of the corporate alumni network during the exit processmdashInternal analysis from organizations such as Ernst amp Young suggests that the vast majority of alumni return to the organization soon after their initial departure thus organizations may want to provide employees with the following information during the exit proces sign-up procedures network benefits and scope of the network (see page 3 for further details from Ernst amp Young alumnirecruiting outreach program)

Target the Al umni Segments Most Likel y to Dri ve Q uality of Hire

3 Focus on high-value corporate alumni segmentsmdashFocusing efforts on former employees who were top performers or those who demonstrated a strong commitment to the job or company helps ensure a higher quality of network members In addition some organizations extend the scope of their corporate alumni program to include those who were not permanent full-time employees such as interns or contractors The list below suggests employee segments to target for the program

Top performers who left voluntarily Individuals who occupied key positions Individuals with key skills contacts or experience Individuals leaving to pursue further education in disciplinescritical to company

operations Retirees who may wish to return to employment High-performing interns or contractors

Build a D a shboard to M easure O v e r all Program Success and Track A lumni S e gments that Generate Large Number of Qua l ity Re-hires

4 Build and monitor metrics specific to the alumni network programmdashBuilding a dashboard with program-specific qualitative and quantitative metrics helps companies to monitor the overall health of their network and also make principled decisions on where to over- or under-invest in the future (eg former high performing internscontractors may have a higher conversion rate than top performers who left voluntarily so companies would therefore host more events for this segment) A list of potential metrics is included in the table below

Table 1 Checklist of Alumni Network Metrics

Quantitative Metrics

Qualitative Metrics

9 Cost per hire of corporate alumni vs regular hires9 Time to fill for corporate alumni vs regular hires9 Number of corporate alumni entered in program database9 Number of corporate alumni hired9 Number of referrals made by corporate alumni9 Number of hires generated by corporate alumni referrals9 Retention rate for corporate alumni

9 Employee engagement levels of corporate alumni vs hires from other channels

9 Additional skills and experiences brought to the

organization as a result of rehiring corporate alumni

CASE STUDY

Alumni linked in to old firms

This is a summary of an article originally published by LM SIXEL in the Houston Chronicle on Feb 3rd 2010

Janet Roth wasnt looking for a new job But her neighbour a former colleague at Deloitte encouraged Roth to join the firms online network for former employees and retirees Roth had worked at Deloitte for seven years leaving in 1996 to join one of its clients Late one night Roth was scrolling through Deloittes alumni site and saw a job opening that sounded interesting She applied went through a streamlined interview process and rejoined Deloitte in 2007 She joined the network mostly for social reasons ldquobut I ended up with a jobrdquo said Roth who is now senior manager in the mergers and acquisitions group in Houston It used to be that when you walked out the door that was it The working relationship was over once you turned in your ID badge and collected your last paycheck

But many companies are reconsidering that strategy After all skilled employees arent that easy to find especially ones who know the corporate culture So companies have taken a page from social sites and launched their own alumni networks The online sites which typically are controlled by individual companies like Deloitte are a way for ex-employees to connect with their former bosses and former co-workers mdash and maybe boomerang back often with newly acquired skills

New skills

Its efficient said Cathy Clonts president of Alumni Web Services which designs alumni networks for corporate clients Members update their contact information and any new skills they acquire Companies in turn can data-mine to find the skills theyre looking for

Its also a way a company can promote its own brand to a group that is already loyal Clonts said Deloitte likes to refer to the members of its AlumNet as ldquocolleagues for liferdquo said Coleman Rowland a partner in energy and resource practices in Houston He said Deloittes alumni network has become such an important business imperative that the firm has seven regional alumni network coordinators around the nation who keep up with the entries Of the 100000 alumni nationwide who left the firm in good standing and are eligible to join Deloittes network 56000 have registered Of those 4000 are in Houston

No more ledgers

In the past the firm kept up with its former employees by updating addresses in ledgers and spreadsheets But that wasnt easy especially when people move so frequently Roth for example moved from Houston to Minnesota to Florida and back to Houston in a series of corporate transfers ldquoDeloitte lost track of me raising three kidsrdquo she said with a laugh It took

running into Rowland who mentioned the network for Roth to reconnect with her old firm Clients and other ldquofriends of the firmrdquo cant get onto the network to troll for possible job candidates but the firm does list its job openings as a courtesy Thats how one of its clients a non-profit found its controller Rowland said And it didnt have to pay any recruiting fees

The Deloitte network which is more LinkedIn than Facebook isnt set up as a chat site or a place to extol the pleasures of retirement Members however can send e-mails to each other through the Deloitte server ldquoIts a way to really expand your networkrdquo Roth said

CONCLUSION

A company alumni network is made to remain in contact and maintain relationships with former employees This offers organizations a new resource for enhancing organizational capabilities Though making formal corporate alumni networks has recently become very important they have been loosely formed and utilized since as long as there have been companies and employees who leave them ndash by letter mailings volunteer groups gatherings etc

Adding to this social networking is redefining the way we interact with colleagues corporate alumni and business partners Forward-thinking employers recognize that investing in life-long relationships through comprehensive alumni programs carries measurable value in recruitment employment branding and new business development

Companies have realised that alumni provide an inside track to new business opportunities It can also be highlighted that alumni who are re-hired stay longer and cost less to onboard than talent new to the organization Also Alumni provide great referrals and are excellent often proactive ambassadors for the company brand

In short these networks are very beneficial to the companies as well as the alumnis due to which its becoming more popular and very important Few companies that have seen the trend and adapted to it are ndash Deloitte Ernst amp Young McKinsey amp Company and Bain amp Company

Thus Alumni networks are seen as

- A key potential driver of competitive advantage for employers- A rich untapped source of innovation human talent and business relationships- Still emergent (in most sectors) and hence demanding clear management focus

AKNOWLEDGEMENT

We would like to thank Ms Yesha Sheth for giving us this topic We would also like to thank her for her guidance and support throughout the project

BIBLIOGRAPHY

wwwselectmindscom

wwwclcexecutiveboardcom

wwwxingcom

wwwfirsttuesdaych

wwwwikipediacom

wwwencyclopediacom

WHY DO COMPANIES MAINTAIN CORPORATE ALUMNI NETWORKS

Organizations typically build corporate alumni networks with the sole purpose of re-recruiting however investing in such a network can bring ancillary benefits as well for example an increased number of high-quality referrals from alumni in the network and new business opportunities

1048707 High-performing corporate alumni represent a valuable talent pool mdashIn a 2005 survey of 100 US organizations 54 of respondents stated that they had actively sought to rehire former employees because they bring the following benefits123

Quick time-to-productivitymdashThe onboarding period and time-to-productivity is relatively short for alumni as they are already familiar with the companyrsquos people politics and processes

Experience and insight from other organizationsmdashReturning corporate alumni often bring back new skills and competencies that can make them more effective in their roles or a new perspective that enables them to see processsystem inefficiencies in their alumni employer They may also bring information about how competitors do business

1048707 Corporate alumni are relatively cost-effective to rehire mdashPursuing corporate alumni rehires may be a cost effective supplement to using contingency search firms particularly for highly technical or specialized positions where talent is in high demand Organizations with an established corporate alumni network may not need to hire an external party for assistance with the first phase of the recruitment cycle (eg generating ldquonamesrdquo)

1048707 Corporate alumni can be a good source of candidate referrals mdashEven if they do not return as employees corporate alumni who feel connected to the organization may be more likely to refer other potential hires With their understanding of the corporate culture and certain job roles they are likely to recommend quality referrals with strong organization and job fit 4 Strategies for converting these referrals into hires include building a competitive employment value proposition (EVP) and leveraging current employees to communicate the EVP Further Council research on the importance of crafting a compelling EVP is available in our study titled Attracting and Retaining Critical Talent Segments5

1048707 Alumni provide new business opportunities mdashOrganizations such as McKinsey amp Company and Bain amp Company report that alumni often provide new business opportunities through some of the activities listed below

Purchasing goods or services from their former organization Facilitating strategic alliances between their former employer and their current

employer Referring (directly or indirectly) potential customers resources and vendors to their

former employer

BUSINESS DEVELOPMENT AS A CONTACT SPORT

ldquoBusiness development is a contact sportrdquo says Attorney Tarlow ldquoYou send your business to the last person with whom you had positive contact Whoever has the best strategy and the tools for developing and maintaining their contacts winsrdquo

ldquoIn the legal world as in other arenas contact with alumni delivers business referrals an important asset particularly in these times of slow or moderate growthrdquo Tarlow says ldquoPeople simply feel more confident hiring someone they know or someone personally recommendedrdquo

Alumni networks also help law firms track the progress of a former employeersquos career If the individual developed a specific expertise the firm requires it would have an opportunity to tap into the individualrsquos knowledge form a business alliance or perhaps lure the individual back

ldquoEmployers secure a competitive advantage when they are able to track their alumnirdquo he says In that regard Tarlow sees that a strong alumni network could help lower recruiting costs Firms that need to expand their staff with attorneys with specific skills and experience usually enlist the help of a recruiter at placement fees of 25 - or more depending on the position On an annual salary of $100000 the recruiter would get $25000 ldquoThatrsquos not insignificantrdquo Tarlow says

To understand the magnitude of the expense imagine that if a professional firm hires eight new staff members each year at a base salary of $100000 recruiter fees alone would total at least $200000

Excluding situations that require placement fees the average cost of replacing an employee is about $10000 per position according to the Employment Management Association The Society for Human Resources Management estimates the average cost of a rehire to be $5000 ndash and rehires tend to stay twice as long

On the other hand a firm can hire a former employee or candidate recommended by a former employee and save tens of thousands of dollars per hire Further studies show that new hires are 40 less productive than rehires during the first few months of employment Therefore rehiring former employees or enlisting the assistance of former employees to recruit new employees should not be ignored

Human Resource expert Arte Nathan New Products Thought Leader for Mellon HR Solutions advocates the creation of communities to build a companyrsquos success and sees alumni networks as facilitating that effort

ldquoBelonging to a corporate community makes sense for both the individual and the corporation When you facilitate people coming and going and assist your community in staying connected companies will be able to take advantage of great resources that would otherwise walk out the door and drop off the radar screenrdquo Nathan says

Nathan sees that industries experiencing growth or facing labor shortages such as healthcare would gain a competitive advantage via connections with a community of former employees However that advantage could be experienced by any organization whose success in the marketplace is a result of the quality of its workforce

ldquoThe important thing here is to build up communities of prospective employees current employees and former employees These communities can give your company a competitive edge by continuing to add value to your company in conventional -- and unconventional -- waysrdquo

Nathan points out that alumni include not just people at the start or middle of their careers but retirees Keeping in touch with this group is appropriate because most will maintain some kind of connection simply because of benefits and investment in the organization Companies that embrace a connection with their retirees will earn their loyalty and the opportunity to rely on the retiree as a source of information inspiration and knowledge Additionally the retiree may serve as a referral for new business and potential employees

In a report on ldquolost knowledgerdquo in the global chemical industry worldwide consulting firm Accenture discusses how the retirement or departure of senior scientists poses a costly and potentially devastating blow to chemical companies According to the February 2002 report these senior scientists had over the years saved their companies literally millions of dollars each because of their knowledge about certain processes that came from experience not textbooks

As these scientists retired or left the chemical company they took with them information that they had accumulated over the years

Accenture recommended that chemical companies maintain a tight relationship with their expertsndash even hiring them as consultants or retaining them on an as-needed basis -- to transfer information serve as mentors and be available as sources of knowledge and advice as needed

Research Fellow David DeLong writes ldquoIn the current economy it will be tempting for leaders to give in to the demands for short-term financial performance But savvy executives recognize that they also must champion more costly knowledge retention strategies because some of their units could be headed for a point of no return in a few yearsrdquo

The lesson could well be applied to many other knowledge-based industries

While itrsquos clear that alumni networks can play a key role in an organizationrsquos success itrsquos important to remember that not just any kind of network will do The costs of running a manual or unstructured alumni network can be high Alumni networks that automate repetitive tasks and shift the maintenance of contact information to former employees will deliver a return on your investment

The methods most companies have used to keep in touch with their alumni have until recently been primarily informal inefficient and left to individuals to create ndash rather than a company-wide initiative But as Tarlow says ldquoIf you donrsquot have the database or tools itrsquos very time-consuming Therersquos no immediate return on your investmentrdquo

Tarlow cites the act of sending a holiday card to former employees as a simple gesture that shows employees you remember them and valued their service It can have positive results as long as sending the card isnrsquot a time-consuming costly process

Automated alumni networks can also handle registration event management job postings and news publication with minimal staff intervention

ACTIVITIES CONTRIBUTING TO AN EFFECTIVE CORPORATE ALUMNI NETWORK

Organizations face three main challenges when managing their alumni hiring programs gaining the active participation of alumni in the network targeting re-recruiting efforts at the alumni segments most likely to drive quality of hire and monitoring the health of and returns from the network Listed below are a few guidelines that companies may wish to consider as they confront these challenges

Dr i v e A c t i v e Participation in the Ne t w ork

1 Highlight compelling value proposition for participation in the networkmdashOrganizations often spend a significant amount of timeresources creating their corporate alumni network but underinvest in marketing strategies to increase participation rates One method for driving interest in the initiative is to highlight the benefits of joining the network some of which include following

Access to a group that engages in social events professional training volunteering andor provides an opportunity for alumni to share information on jobs and careers as well as leads and references for business ventures

Discounts on products or services

2 Make employees aware of the corporate alumni network during the exit processmdashInternal analysis from organizations such as Ernst amp Young suggests that the vast majority of alumni return to the organization soon after their initial departure thus organizations may want to provide employees with the following information during the exit proces sign-up procedures network benefits and scope of the network (see page 3 for further details from Ernst amp Young alumnirecruiting outreach program)

Target the Al umni Segments Most Likel y to Dri ve Q uality of Hire

3 Focus on high-value corporate alumni segmentsmdashFocusing efforts on former employees who were top performers or those who demonstrated a strong commitment to the job or company helps ensure a higher quality of network members In addition some organizations extend the scope of their corporate alumni program to include those who were not permanent full-time employees such as interns or contractors The list below suggests employee segments to target for the program

Top performers who left voluntarily Individuals who occupied key positions Individuals with key skills contacts or experience Individuals leaving to pursue further education in disciplinescritical to company

operations Retirees who may wish to return to employment High-performing interns or contractors

Build a D a shboard to M easure O v e r all Program Success and Track A lumni S e gments that Generate Large Number of Qua l ity Re-hires

4 Build and monitor metrics specific to the alumni network programmdashBuilding a dashboard with program-specific qualitative and quantitative metrics helps companies to monitor the overall health of their network and also make principled decisions on where to over- or under-invest in the future (eg former high performing internscontractors may have a higher conversion rate than top performers who left voluntarily so companies would therefore host more events for this segment) A list of potential metrics is included in the table below

Table 1 Checklist of Alumni Network Metrics

Quantitative Metrics

Qualitative Metrics

9 Cost per hire of corporate alumni vs regular hires9 Time to fill for corporate alumni vs regular hires9 Number of corporate alumni entered in program database9 Number of corporate alumni hired9 Number of referrals made by corporate alumni9 Number of hires generated by corporate alumni referrals9 Retention rate for corporate alumni

9 Employee engagement levels of corporate alumni vs hires from other channels

9 Additional skills and experiences brought to the

organization as a result of rehiring corporate alumni

CASE STUDY

Alumni linked in to old firms

This is a summary of an article originally published by LM SIXEL in the Houston Chronicle on Feb 3rd 2010

Janet Roth wasnt looking for a new job But her neighbour a former colleague at Deloitte encouraged Roth to join the firms online network for former employees and retirees Roth had worked at Deloitte for seven years leaving in 1996 to join one of its clients Late one night Roth was scrolling through Deloittes alumni site and saw a job opening that sounded interesting She applied went through a streamlined interview process and rejoined Deloitte in 2007 She joined the network mostly for social reasons ldquobut I ended up with a jobrdquo said Roth who is now senior manager in the mergers and acquisitions group in Houston It used to be that when you walked out the door that was it The working relationship was over once you turned in your ID badge and collected your last paycheck

But many companies are reconsidering that strategy After all skilled employees arent that easy to find especially ones who know the corporate culture So companies have taken a page from social sites and launched their own alumni networks The online sites which typically are controlled by individual companies like Deloitte are a way for ex-employees to connect with their former bosses and former co-workers mdash and maybe boomerang back often with newly acquired skills

New skills

Its efficient said Cathy Clonts president of Alumni Web Services which designs alumni networks for corporate clients Members update their contact information and any new skills they acquire Companies in turn can data-mine to find the skills theyre looking for

Its also a way a company can promote its own brand to a group that is already loyal Clonts said Deloitte likes to refer to the members of its AlumNet as ldquocolleagues for liferdquo said Coleman Rowland a partner in energy and resource practices in Houston He said Deloittes alumni network has become such an important business imperative that the firm has seven regional alumni network coordinators around the nation who keep up with the entries Of the 100000 alumni nationwide who left the firm in good standing and are eligible to join Deloittes network 56000 have registered Of those 4000 are in Houston

No more ledgers

In the past the firm kept up with its former employees by updating addresses in ledgers and spreadsheets But that wasnt easy especially when people move so frequently Roth for example moved from Houston to Minnesota to Florida and back to Houston in a series of corporate transfers ldquoDeloitte lost track of me raising three kidsrdquo she said with a laugh It took

running into Rowland who mentioned the network for Roth to reconnect with her old firm Clients and other ldquofriends of the firmrdquo cant get onto the network to troll for possible job candidates but the firm does list its job openings as a courtesy Thats how one of its clients a non-profit found its controller Rowland said And it didnt have to pay any recruiting fees

The Deloitte network which is more LinkedIn than Facebook isnt set up as a chat site or a place to extol the pleasures of retirement Members however can send e-mails to each other through the Deloitte server ldquoIts a way to really expand your networkrdquo Roth said

CONCLUSION

A company alumni network is made to remain in contact and maintain relationships with former employees This offers organizations a new resource for enhancing organizational capabilities Though making formal corporate alumni networks has recently become very important they have been loosely formed and utilized since as long as there have been companies and employees who leave them ndash by letter mailings volunteer groups gatherings etc

Adding to this social networking is redefining the way we interact with colleagues corporate alumni and business partners Forward-thinking employers recognize that investing in life-long relationships through comprehensive alumni programs carries measurable value in recruitment employment branding and new business development

Companies have realised that alumni provide an inside track to new business opportunities It can also be highlighted that alumni who are re-hired stay longer and cost less to onboard than talent new to the organization Also Alumni provide great referrals and are excellent often proactive ambassadors for the company brand

In short these networks are very beneficial to the companies as well as the alumnis due to which its becoming more popular and very important Few companies that have seen the trend and adapted to it are ndash Deloitte Ernst amp Young McKinsey amp Company and Bain amp Company

Thus Alumni networks are seen as

- A key potential driver of competitive advantage for employers- A rich untapped source of innovation human talent and business relationships- Still emergent (in most sectors) and hence demanding clear management focus

AKNOWLEDGEMENT

We would like to thank Ms Yesha Sheth for giving us this topic We would also like to thank her for her guidance and support throughout the project

BIBLIOGRAPHY

wwwselectmindscom

wwwclcexecutiveboardcom

wwwxingcom

wwwfirsttuesdaych

wwwwikipediacom

wwwencyclopediacom

1048707 Alumni provide new business opportunities mdashOrganizations such as McKinsey amp Company and Bain amp Company report that alumni often provide new business opportunities through some of the activities listed below

Purchasing goods or services from their former organization Facilitating strategic alliances between their former employer and their current

employer Referring (directly or indirectly) potential customers resources and vendors to their

former employer

BUSINESS DEVELOPMENT AS A CONTACT SPORT

ldquoBusiness development is a contact sportrdquo says Attorney Tarlow ldquoYou send your business to the last person with whom you had positive contact Whoever has the best strategy and the tools for developing and maintaining their contacts winsrdquo

ldquoIn the legal world as in other arenas contact with alumni delivers business referrals an important asset particularly in these times of slow or moderate growthrdquo Tarlow says ldquoPeople simply feel more confident hiring someone they know or someone personally recommendedrdquo

Alumni networks also help law firms track the progress of a former employeersquos career If the individual developed a specific expertise the firm requires it would have an opportunity to tap into the individualrsquos knowledge form a business alliance or perhaps lure the individual back

ldquoEmployers secure a competitive advantage when they are able to track their alumnirdquo he says In that regard Tarlow sees that a strong alumni network could help lower recruiting costs Firms that need to expand their staff with attorneys with specific skills and experience usually enlist the help of a recruiter at placement fees of 25 - or more depending on the position On an annual salary of $100000 the recruiter would get $25000 ldquoThatrsquos not insignificantrdquo Tarlow says

To understand the magnitude of the expense imagine that if a professional firm hires eight new staff members each year at a base salary of $100000 recruiter fees alone would total at least $200000

Excluding situations that require placement fees the average cost of replacing an employee is about $10000 per position according to the Employment Management Association The Society for Human Resources Management estimates the average cost of a rehire to be $5000 ndash and rehires tend to stay twice as long

On the other hand a firm can hire a former employee or candidate recommended by a former employee and save tens of thousands of dollars per hire Further studies show that new hires are 40 less productive than rehires during the first few months of employment Therefore rehiring former employees or enlisting the assistance of former employees to recruit new employees should not be ignored

Human Resource expert Arte Nathan New Products Thought Leader for Mellon HR Solutions advocates the creation of communities to build a companyrsquos success and sees alumni networks as facilitating that effort

ldquoBelonging to a corporate community makes sense for both the individual and the corporation When you facilitate people coming and going and assist your community in staying connected companies will be able to take advantage of great resources that would otherwise walk out the door and drop off the radar screenrdquo Nathan says

Nathan sees that industries experiencing growth or facing labor shortages such as healthcare would gain a competitive advantage via connections with a community of former employees However that advantage could be experienced by any organization whose success in the marketplace is a result of the quality of its workforce

ldquoThe important thing here is to build up communities of prospective employees current employees and former employees These communities can give your company a competitive edge by continuing to add value to your company in conventional -- and unconventional -- waysrdquo

Nathan points out that alumni include not just people at the start or middle of their careers but retirees Keeping in touch with this group is appropriate because most will maintain some kind of connection simply because of benefits and investment in the organization Companies that embrace a connection with their retirees will earn their loyalty and the opportunity to rely on the retiree as a source of information inspiration and knowledge Additionally the retiree may serve as a referral for new business and potential employees

In a report on ldquolost knowledgerdquo in the global chemical industry worldwide consulting firm Accenture discusses how the retirement or departure of senior scientists poses a costly and potentially devastating blow to chemical companies According to the February 2002 report these senior scientists had over the years saved their companies literally millions of dollars each because of their knowledge about certain processes that came from experience not textbooks

As these scientists retired or left the chemical company they took with them information that they had accumulated over the years

Accenture recommended that chemical companies maintain a tight relationship with their expertsndash even hiring them as consultants or retaining them on an as-needed basis -- to transfer information serve as mentors and be available as sources of knowledge and advice as needed

Research Fellow David DeLong writes ldquoIn the current economy it will be tempting for leaders to give in to the demands for short-term financial performance But savvy executives recognize that they also must champion more costly knowledge retention strategies because some of their units could be headed for a point of no return in a few yearsrdquo

The lesson could well be applied to many other knowledge-based industries

While itrsquos clear that alumni networks can play a key role in an organizationrsquos success itrsquos important to remember that not just any kind of network will do The costs of running a manual or unstructured alumni network can be high Alumni networks that automate repetitive tasks and shift the maintenance of contact information to former employees will deliver a return on your investment

The methods most companies have used to keep in touch with their alumni have until recently been primarily informal inefficient and left to individuals to create ndash rather than a company-wide initiative But as Tarlow says ldquoIf you donrsquot have the database or tools itrsquos very time-consuming Therersquos no immediate return on your investmentrdquo

Tarlow cites the act of sending a holiday card to former employees as a simple gesture that shows employees you remember them and valued their service It can have positive results as long as sending the card isnrsquot a time-consuming costly process

Automated alumni networks can also handle registration event management job postings and news publication with minimal staff intervention

ACTIVITIES CONTRIBUTING TO AN EFFECTIVE CORPORATE ALUMNI NETWORK

Organizations face three main challenges when managing their alumni hiring programs gaining the active participation of alumni in the network targeting re-recruiting efforts at the alumni segments most likely to drive quality of hire and monitoring the health of and returns from the network Listed below are a few guidelines that companies may wish to consider as they confront these challenges

Dr i v e A c t i v e Participation in the Ne t w ork

1 Highlight compelling value proposition for participation in the networkmdashOrganizations often spend a significant amount of timeresources creating their corporate alumni network but underinvest in marketing strategies to increase participation rates One method for driving interest in the initiative is to highlight the benefits of joining the network some of which include following

Access to a group that engages in social events professional training volunteering andor provides an opportunity for alumni to share information on jobs and careers as well as leads and references for business ventures

Discounts on products or services

2 Make employees aware of the corporate alumni network during the exit processmdashInternal analysis from organizations such as Ernst amp Young suggests that the vast majority of alumni return to the organization soon after their initial departure thus organizations may want to provide employees with the following information during the exit proces sign-up procedures network benefits and scope of the network (see page 3 for further details from Ernst amp Young alumnirecruiting outreach program)

Target the Al umni Segments Most Likel y to Dri ve Q uality of Hire

3 Focus on high-value corporate alumni segmentsmdashFocusing efforts on former employees who were top performers or those who demonstrated a strong commitment to the job or company helps ensure a higher quality of network members In addition some organizations extend the scope of their corporate alumni program to include those who were not permanent full-time employees such as interns or contractors The list below suggests employee segments to target for the program

Top performers who left voluntarily Individuals who occupied key positions Individuals with key skills contacts or experience Individuals leaving to pursue further education in disciplinescritical to company

operations Retirees who may wish to return to employment High-performing interns or contractors

Build a D a shboard to M easure O v e r all Program Success and Track A lumni S e gments that Generate Large Number of Qua l ity Re-hires

4 Build and monitor metrics specific to the alumni network programmdashBuilding a dashboard with program-specific qualitative and quantitative metrics helps companies to monitor the overall health of their network and also make principled decisions on where to over- or under-invest in the future (eg former high performing internscontractors may have a higher conversion rate than top performers who left voluntarily so companies would therefore host more events for this segment) A list of potential metrics is included in the table below

Table 1 Checklist of Alumni Network Metrics

Quantitative Metrics

Qualitative Metrics

9 Cost per hire of corporate alumni vs regular hires9 Time to fill for corporate alumni vs regular hires9 Number of corporate alumni entered in program database9 Number of corporate alumni hired9 Number of referrals made by corporate alumni9 Number of hires generated by corporate alumni referrals9 Retention rate for corporate alumni

9 Employee engagement levels of corporate alumni vs hires from other channels

9 Additional skills and experiences brought to the

organization as a result of rehiring corporate alumni

CASE STUDY

Alumni linked in to old firms

This is a summary of an article originally published by LM SIXEL in the Houston Chronicle on Feb 3rd 2010

Janet Roth wasnt looking for a new job But her neighbour a former colleague at Deloitte encouraged Roth to join the firms online network for former employees and retirees Roth had worked at Deloitte for seven years leaving in 1996 to join one of its clients Late one night Roth was scrolling through Deloittes alumni site and saw a job opening that sounded interesting She applied went through a streamlined interview process and rejoined Deloitte in 2007 She joined the network mostly for social reasons ldquobut I ended up with a jobrdquo said Roth who is now senior manager in the mergers and acquisitions group in Houston It used to be that when you walked out the door that was it The working relationship was over once you turned in your ID badge and collected your last paycheck

But many companies are reconsidering that strategy After all skilled employees arent that easy to find especially ones who know the corporate culture So companies have taken a page from social sites and launched their own alumni networks The online sites which typically are controlled by individual companies like Deloitte are a way for ex-employees to connect with their former bosses and former co-workers mdash and maybe boomerang back often with newly acquired skills

New skills

Its efficient said Cathy Clonts president of Alumni Web Services which designs alumni networks for corporate clients Members update their contact information and any new skills they acquire Companies in turn can data-mine to find the skills theyre looking for

Its also a way a company can promote its own brand to a group that is already loyal Clonts said Deloitte likes to refer to the members of its AlumNet as ldquocolleagues for liferdquo said Coleman Rowland a partner in energy and resource practices in Houston He said Deloittes alumni network has become such an important business imperative that the firm has seven regional alumni network coordinators around the nation who keep up with the entries Of the 100000 alumni nationwide who left the firm in good standing and are eligible to join Deloittes network 56000 have registered Of those 4000 are in Houston

No more ledgers

In the past the firm kept up with its former employees by updating addresses in ledgers and spreadsheets But that wasnt easy especially when people move so frequently Roth for example moved from Houston to Minnesota to Florida and back to Houston in a series of corporate transfers ldquoDeloitte lost track of me raising three kidsrdquo she said with a laugh It took

running into Rowland who mentioned the network for Roth to reconnect with her old firm Clients and other ldquofriends of the firmrdquo cant get onto the network to troll for possible job candidates but the firm does list its job openings as a courtesy Thats how one of its clients a non-profit found its controller Rowland said And it didnt have to pay any recruiting fees

The Deloitte network which is more LinkedIn than Facebook isnt set up as a chat site or a place to extol the pleasures of retirement Members however can send e-mails to each other through the Deloitte server ldquoIts a way to really expand your networkrdquo Roth said

CONCLUSION

A company alumni network is made to remain in contact and maintain relationships with former employees This offers organizations a new resource for enhancing organizational capabilities Though making formal corporate alumni networks has recently become very important they have been loosely formed and utilized since as long as there have been companies and employees who leave them ndash by letter mailings volunteer groups gatherings etc

Adding to this social networking is redefining the way we interact with colleagues corporate alumni and business partners Forward-thinking employers recognize that investing in life-long relationships through comprehensive alumni programs carries measurable value in recruitment employment branding and new business development

Companies have realised that alumni provide an inside track to new business opportunities It can also be highlighted that alumni who are re-hired stay longer and cost less to onboard than talent new to the organization Also Alumni provide great referrals and are excellent often proactive ambassadors for the company brand

In short these networks are very beneficial to the companies as well as the alumnis due to which its becoming more popular and very important Few companies that have seen the trend and adapted to it are ndash Deloitte Ernst amp Young McKinsey amp Company and Bain amp Company

Thus Alumni networks are seen as

- A key potential driver of competitive advantage for employers- A rich untapped source of innovation human talent and business relationships- Still emergent (in most sectors) and hence demanding clear management focus

AKNOWLEDGEMENT

We would like to thank Ms Yesha Sheth for giving us this topic We would also like to thank her for her guidance and support throughout the project

BIBLIOGRAPHY

wwwselectmindscom

wwwclcexecutiveboardcom

wwwxingcom

wwwfirsttuesdaych

wwwwikipediacom

wwwencyclopediacom

BUSINESS DEVELOPMENT AS A CONTACT SPORT

ldquoBusiness development is a contact sportrdquo says Attorney Tarlow ldquoYou send your business to the last person with whom you had positive contact Whoever has the best strategy and the tools for developing and maintaining their contacts winsrdquo

ldquoIn the legal world as in other arenas contact with alumni delivers business referrals an important asset particularly in these times of slow or moderate growthrdquo Tarlow says ldquoPeople simply feel more confident hiring someone they know or someone personally recommendedrdquo

Alumni networks also help law firms track the progress of a former employeersquos career If the individual developed a specific expertise the firm requires it would have an opportunity to tap into the individualrsquos knowledge form a business alliance or perhaps lure the individual back

ldquoEmployers secure a competitive advantage when they are able to track their alumnirdquo he says In that regard Tarlow sees that a strong alumni network could help lower recruiting costs Firms that need to expand their staff with attorneys with specific skills and experience usually enlist the help of a recruiter at placement fees of 25 - or more depending on the position On an annual salary of $100000 the recruiter would get $25000 ldquoThatrsquos not insignificantrdquo Tarlow says

To understand the magnitude of the expense imagine that if a professional firm hires eight new staff members each year at a base salary of $100000 recruiter fees alone would total at least $200000

Excluding situations that require placement fees the average cost of replacing an employee is about $10000 per position according to the Employment Management Association The Society for Human Resources Management estimates the average cost of a rehire to be $5000 ndash and rehires tend to stay twice as long

On the other hand a firm can hire a former employee or candidate recommended by a former employee and save tens of thousands of dollars per hire Further studies show that new hires are 40 less productive than rehires during the first few months of employment Therefore rehiring former employees or enlisting the assistance of former employees to recruit new employees should not be ignored

Human Resource expert Arte Nathan New Products Thought Leader for Mellon HR Solutions advocates the creation of communities to build a companyrsquos success and sees alumni networks as facilitating that effort

ldquoBelonging to a corporate community makes sense for both the individual and the corporation When you facilitate people coming and going and assist your community in staying connected companies will be able to take advantage of great resources that would otherwise walk out the door and drop off the radar screenrdquo Nathan says

Nathan sees that industries experiencing growth or facing labor shortages such as healthcare would gain a competitive advantage via connections with a community of former employees However that advantage could be experienced by any organization whose success in the marketplace is a result of the quality of its workforce

ldquoThe important thing here is to build up communities of prospective employees current employees and former employees These communities can give your company a competitive edge by continuing to add value to your company in conventional -- and unconventional -- waysrdquo

Nathan points out that alumni include not just people at the start or middle of their careers but retirees Keeping in touch with this group is appropriate because most will maintain some kind of connection simply because of benefits and investment in the organization Companies that embrace a connection with their retirees will earn their loyalty and the opportunity to rely on the retiree as a source of information inspiration and knowledge Additionally the retiree may serve as a referral for new business and potential employees

In a report on ldquolost knowledgerdquo in the global chemical industry worldwide consulting firm Accenture discusses how the retirement or departure of senior scientists poses a costly and potentially devastating blow to chemical companies According to the February 2002 report these senior scientists had over the years saved their companies literally millions of dollars each because of their knowledge about certain processes that came from experience not textbooks

As these scientists retired or left the chemical company they took with them information that they had accumulated over the years

Accenture recommended that chemical companies maintain a tight relationship with their expertsndash even hiring them as consultants or retaining them on an as-needed basis -- to transfer information serve as mentors and be available as sources of knowledge and advice as needed

Research Fellow David DeLong writes ldquoIn the current economy it will be tempting for leaders to give in to the demands for short-term financial performance But savvy executives recognize that they also must champion more costly knowledge retention strategies because some of their units could be headed for a point of no return in a few yearsrdquo

The lesson could well be applied to many other knowledge-based industries

While itrsquos clear that alumni networks can play a key role in an organizationrsquos success itrsquos important to remember that not just any kind of network will do The costs of running a manual or unstructured alumni network can be high Alumni networks that automate repetitive tasks and shift the maintenance of contact information to former employees will deliver a return on your investment

The methods most companies have used to keep in touch with their alumni have until recently been primarily informal inefficient and left to individuals to create ndash rather than a company-wide initiative But as Tarlow says ldquoIf you donrsquot have the database or tools itrsquos very time-consuming Therersquos no immediate return on your investmentrdquo

Tarlow cites the act of sending a holiday card to former employees as a simple gesture that shows employees you remember them and valued their service It can have positive results as long as sending the card isnrsquot a time-consuming costly process

Automated alumni networks can also handle registration event management job postings and news publication with minimal staff intervention

ACTIVITIES CONTRIBUTING TO AN EFFECTIVE CORPORATE ALUMNI NETWORK

Organizations face three main challenges when managing their alumni hiring programs gaining the active participation of alumni in the network targeting re-recruiting efforts at the alumni segments most likely to drive quality of hire and monitoring the health of and returns from the network Listed below are a few guidelines that companies may wish to consider as they confront these challenges

Dr i v e A c t i v e Participation in the Ne t w ork

1 Highlight compelling value proposition for participation in the networkmdashOrganizations often spend a significant amount of timeresources creating their corporate alumni network but underinvest in marketing strategies to increase participation rates One method for driving interest in the initiative is to highlight the benefits of joining the network some of which include following

Access to a group that engages in social events professional training volunteering andor provides an opportunity for alumni to share information on jobs and careers as well as leads and references for business ventures

Discounts on products or services

2 Make employees aware of the corporate alumni network during the exit processmdashInternal analysis from organizations such as Ernst amp Young suggests that the vast majority of alumni return to the organization soon after their initial departure thus organizations may want to provide employees with the following information during the exit proces sign-up procedures network benefits and scope of the network (see page 3 for further details from Ernst amp Young alumnirecruiting outreach program)

Target the Al umni Segments Most Likel y to Dri ve Q uality of Hire

3 Focus on high-value corporate alumni segmentsmdashFocusing efforts on former employees who were top performers or those who demonstrated a strong commitment to the job or company helps ensure a higher quality of network members In addition some organizations extend the scope of their corporate alumni program to include those who were not permanent full-time employees such as interns or contractors The list below suggests employee segments to target for the program

Top performers who left voluntarily Individuals who occupied key positions Individuals with key skills contacts or experience Individuals leaving to pursue further education in disciplinescritical to company

operations Retirees who may wish to return to employment High-performing interns or contractors

Build a D a shboard to M easure O v e r all Program Success and Track A lumni S e gments that Generate Large Number of Qua l ity Re-hires

4 Build and monitor metrics specific to the alumni network programmdashBuilding a dashboard with program-specific qualitative and quantitative metrics helps companies to monitor the overall health of their network and also make principled decisions on where to over- or under-invest in the future (eg former high performing internscontractors may have a higher conversion rate than top performers who left voluntarily so companies would therefore host more events for this segment) A list of potential metrics is included in the table below

Table 1 Checklist of Alumni Network Metrics

Quantitative Metrics

Qualitative Metrics

9 Cost per hire of corporate alumni vs regular hires9 Time to fill for corporate alumni vs regular hires9 Number of corporate alumni entered in program database9 Number of corporate alumni hired9 Number of referrals made by corporate alumni9 Number of hires generated by corporate alumni referrals9 Retention rate for corporate alumni

9 Employee engagement levels of corporate alumni vs hires from other channels

9 Additional skills and experiences brought to the

organization as a result of rehiring corporate alumni

CASE STUDY

Alumni linked in to old firms

This is a summary of an article originally published by LM SIXEL in the Houston Chronicle on Feb 3rd 2010

Janet Roth wasnt looking for a new job But her neighbour a former colleague at Deloitte encouraged Roth to join the firms online network for former employees and retirees Roth had worked at Deloitte for seven years leaving in 1996 to join one of its clients Late one night Roth was scrolling through Deloittes alumni site and saw a job opening that sounded interesting She applied went through a streamlined interview process and rejoined Deloitte in 2007 She joined the network mostly for social reasons ldquobut I ended up with a jobrdquo said Roth who is now senior manager in the mergers and acquisitions group in Houston It used to be that when you walked out the door that was it The working relationship was over once you turned in your ID badge and collected your last paycheck

But many companies are reconsidering that strategy After all skilled employees arent that easy to find especially ones who know the corporate culture So companies have taken a page from social sites and launched their own alumni networks The online sites which typically are controlled by individual companies like Deloitte are a way for ex-employees to connect with their former bosses and former co-workers mdash and maybe boomerang back often with newly acquired skills

New skills

Its efficient said Cathy Clonts president of Alumni Web Services which designs alumni networks for corporate clients Members update their contact information and any new skills they acquire Companies in turn can data-mine to find the skills theyre looking for

Its also a way a company can promote its own brand to a group that is already loyal Clonts said Deloitte likes to refer to the members of its AlumNet as ldquocolleagues for liferdquo said Coleman Rowland a partner in energy and resource practices in Houston He said Deloittes alumni network has become such an important business imperative that the firm has seven regional alumni network coordinators around the nation who keep up with the entries Of the 100000 alumni nationwide who left the firm in good standing and are eligible to join Deloittes network 56000 have registered Of those 4000 are in Houston

No more ledgers

In the past the firm kept up with its former employees by updating addresses in ledgers and spreadsheets But that wasnt easy especially when people move so frequently Roth for example moved from Houston to Minnesota to Florida and back to Houston in a series of corporate transfers ldquoDeloitte lost track of me raising three kidsrdquo she said with a laugh It took

running into Rowland who mentioned the network for Roth to reconnect with her old firm Clients and other ldquofriends of the firmrdquo cant get onto the network to troll for possible job candidates but the firm does list its job openings as a courtesy Thats how one of its clients a non-profit found its controller Rowland said And it didnt have to pay any recruiting fees

The Deloitte network which is more LinkedIn than Facebook isnt set up as a chat site or a place to extol the pleasures of retirement Members however can send e-mails to each other through the Deloitte server ldquoIts a way to really expand your networkrdquo Roth said

CONCLUSION

A company alumni network is made to remain in contact and maintain relationships with former employees This offers organizations a new resource for enhancing organizational capabilities Though making formal corporate alumni networks has recently become very important they have been loosely formed and utilized since as long as there have been companies and employees who leave them ndash by letter mailings volunteer groups gatherings etc

Adding to this social networking is redefining the way we interact with colleagues corporate alumni and business partners Forward-thinking employers recognize that investing in life-long relationships through comprehensive alumni programs carries measurable value in recruitment employment branding and new business development

Companies have realised that alumni provide an inside track to new business opportunities It can also be highlighted that alumni who are re-hired stay longer and cost less to onboard than talent new to the organization Also Alumni provide great referrals and are excellent often proactive ambassadors for the company brand

In short these networks are very beneficial to the companies as well as the alumnis due to which its becoming more popular and very important Few companies that have seen the trend and adapted to it are ndash Deloitte Ernst amp Young McKinsey amp Company and Bain amp Company

Thus Alumni networks are seen as

- A key potential driver of competitive advantage for employers- A rich untapped source of innovation human talent and business relationships- Still emergent (in most sectors) and hence demanding clear management focus

AKNOWLEDGEMENT

We would like to thank Ms Yesha Sheth for giving us this topic We would also like to thank her for her guidance and support throughout the project

BIBLIOGRAPHY

wwwselectmindscom

wwwclcexecutiveboardcom

wwwxingcom

wwwfirsttuesdaych

wwwwikipediacom

wwwencyclopediacom

ldquoBelonging to a corporate community makes sense for both the individual and the corporation When you facilitate people coming and going and assist your community in staying connected companies will be able to take advantage of great resources that would otherwise walk out the door and drop off the radar screenrdquo Nathan says

Nathan sees that industries experiencing growth or facing labor shortages such as healthcare would gain a competitive advantage via connections with a community of former employees However that advantage could be experienced by any organization whose success in the marketplace is a result of the quality of its workforce

ldquoThe important thing here is to build up communities of prospective employees current employees and former employees These communities can give your company a competitive edge by continuing to add value to your company in conventional -- and unconventional -- waysrdquo

Nathan points out that alumni include not just people at the start or middle of their careers but retirees Keeping in touch with this group is appropriate because most will maintain some kind of connection simply because of benefits and investment in the organization Companies that embrace a connection with their retirees will earn their loyalty and the opportunity to rely on the retiree as a source of information inspiration and knowledge Additionally the retiree may serve as a referral for new business and potential employees

In a report on ldquolost knowledgerdquo in the global chemical industry worldwide consulting firm Accenture discusses how the retirement or departure of senior scientists poses a costly and potentially devastating blow to chemical companies According to the February 2002 report these senior scientists had over the years saved their companies literally millions of dollars each because of their knowledge about certain processes that came from experience not textbooks

As these scientists retired or left the chemical company they took with them information that they had accumulated over the years

Accenture recommended that chemical companies maintain a tight relationship with their expertsndash even hiring them as consultants or retaining them on an as-needed basis -- to transfer information serve as mentors and be available as sources of knowledge and advice as needed

Research Fellow David DeLong writes ldquoIn the current economy it will be tempting for leaders to give in to the demands for short-term financial performance But savvy executives recognize that they also must champion more costly knowledge retention strategies because some of their units could be headed for a point of no return in a few yearsrdquo

The lesson could well be applied to many other knowledge-based industries

While itrsquos clear that alumni networks can play a key role in an organizationrsquos success itrsquos important to remember that not just any kind of network will do The costs of running a manual or unstructured alumni network can be high Alumni networks that automate repetitive tasks and shift the maintenance of contact information to former employees will deliver a return on your investment

The methods most companies have used to keep in touch with their alumni have until recently been primarily informal inefficient and left to individuals to create ndash rather than a company-wide initiative But as Tarlow says ldquoIf you donrsquot have the database or tools itrsquos very time-consuming Therersquos no immediate return on your investmentrdquo

Tarlow cites the act of sending a holiday card to former employees as a simple gesture that shows employees you remember them and valued their service It can have positive results as long as sending the card isnrsquot a time-consuming costly process

Automated alumni networks can also handle registration event management job postings and news publication with minimal staff intervention

ACTIVITIES CONTRIBUTING TO AN EFFECTIVE CORPORATE ALUMNI NETWORK

Organizations face three main challenges when managing their alumni hiring programs gaining the active participation of alumni in the network targeting re-recruiting efforts at the alumni segments most likely to drive quality of hire and monitoring the health of and returns from the network Listed below are a few guidelines that companies may wish to consider as they confront these challenges

Dr i v e A c t i v e Participation in the Ne t w ork

1 Highlight compelling value proposition for participation in the networkmdashOrganizations often spend a significant amount of timeresources creating their corporate alumni network but underinvest in marketing strategies to increase participation rates One method for driving interest in the initiative is to highlight the benefits of joining the network some of which include following

Access to a group that engages in social events professional training volunteering andor provides an opportunity for alumni to share information on jobs and careers as well as leads and references for business ventures

Discounts on products or services

2 Make employees aware of the corporate alumni network during the exit processmdashInternal analysis from organizations such as Ernst amp Young suggests that the vast majority of alumni return to the organization soon after their initial departure thus organizations may want to provide employees with the following information during the exit proces sign-up procedures network benefits and scope of the network (see page 3 for further details from Ernst amp Young alumnirecruiting outreach program)

Target the Al umni Segments Most Likel y to Dri ve Q uality of Hire

3 Focus on high-value corporate alumni segmentsmdashFocusing efforts on former employees who were top performers or those who demonstrated a strong commitment to the job or company helps ensure a higher quality of network members In addition some organizations extend the scope of their corporate alumni program to include those who were not permanent full-time employees such as interns or contractors The list below suggests employee segments to target for the program

Top performers who left voluntarily Individuals who occupied key positions Individuals with key skills contacts or experience Individuals leaving to pursue further education in disciplinescritical to company

operations Retirees who may wish to return to employment High-performing interns or contractors

Build a D a shboard to M easure O v e r all Program Success and Track A lumni S e gments that Generate Large Number of Qua l ity Re-hires

4 Build and monitor metrics specific to the alumni network programmdashBuilding a dashboard with program-specific qualitative and quantitative metrics helps companies to monitor the overall health of their network and also make principled decisions on where to over- or under-invest in the future (eg former high performing internscontractors may have a higher conversion rate than top performers who left voluntarily so companies would therefore host more events for this segment) A list of potential metrics is included in the table below

Table 1 Checklist of Alumni Network Metrics

Quantitative Metrics

Qualitative Metrics

9 Cost per hire of corporate alumni vs regular hires9 Time to fill for corporate alumni vs regular hires9 Number of corporate alumni entered in program database9 Number of corporate alumni hired9 Number of referrals made by corporate alumni9 Number of hires generated by corporate alumni referrals9 Retention rate for corporate alumni

9 Employee engagement levels of corporate alumni vs hires from other channels

9 Additional skills and experiences brought to the

organization as a result of rehiring corporate alumni

CASE STUDY

Alumni linked in to old firms

This is a summary of an article originally published by LM SIXEL in the Houston Chronicle on Feb 3rd 2010

Janet Roth wasnt looking for a new job But her neighbour a former colleague at Deloitte encouraged Roth to join the firms online network for former employees and retirees Roth had worked at Deloitte for seven years leaving in 1996 to join one of its clients Late one night Roth was scrolling through Deloittes alumni site and saw a job opening that sounded interesting She applied went through a streamlined interview process and rejoined Deloitte in 2007 She joined the network mostly for social reasons ldquobut I ended up with a jobrdquo said Roth who is now senior manager in the mergers and acquisitions group in Houston It used to be that when you walked out the door that was it The working relationship was over once you turned in your ID badge and collected your last paycheck

But many companies are reconsidering that strategy After all skilled employees arent that easy to find especially ones who know the corporate culture So companies have taken a page from social sites and launched their own alumni networks The online sites which typically are controlled by individual companies like Deloitte are a way for ex-employees to connect with their former bosses and former co-workers mdash and maybe boomerang back often with newly acquired skills

New skills

Its efficient said Cathy Clonts president of Alumni Web Services which designs alumni networks for corporate clients Members update their contact information and any new skills they acquire Companies in turn can data-mine to find the skills theyre looking for

Its also a way a company can promote its own brand to a group that is already loyal Clonts said Deloitte likes to refer to the members of its AlumNet as ldquocolleagues for liferdquo said Coleman Rowland a partner in energy and resource practices in Houston He said Deloittes alumni network has become such an important business imperative that the firm has seven regional alumni network coordinators around the nation who keep up with the entries Of the 100000 alumni nationwide who left the firm in good standing and are eligible to join Deloittes network 56000 have registered Of those 4000 are in Houston

No more ledgers

In the past the firm kept up with its former employees by updating addresses in ledgers and spreadsheets But that wasnt easy especially when people move so frequently Roth for example moved from Houston to Minnesota to Florida and back to Houston in a series of corporate transfers ldquoDeloitte lost track of me raising three kidsrdquo she said with a laugh It took

running into Rowland who mentioned the network for Roth to reconnect with her old firm Clients and other ldquofriends of the firmrdquo cant get onto the network to troll for possible job candidates but the firm does list its job openings as a courtesy Thats how one of its clients a non-profit found its controller Rowland said And it didnt have to pay any recruiting fees

The Deloitte network which is more LinkedIn than Facebook isnt set up as a chat site or a place to extol the pleasures of retirement Members however can send e-mails to each other through the Deloitte server ldquoIts a way to really expand your networkrdquo Roth said

CONCLUSION

A company alumni network is made to remain in contact and maintain relationships with former employees This offers organizations a new resource for enhancing organizational capabilities Though making formal corporate alumni networks has recently become very important they have been loosely formed and utilized since as long as there have been companies and employees who leave them ndash by letter mailings volunteer groups gatherings etc

Adding to this social networking is redefining the way we interact with colleagues corporate alumni and business partners Forward-thinking employers recognize that investing in life-long relationships through comprehensive alumni programs carries measurable value in recruitment employment branding and new business development

Companies have realised that alumni provide an inside track to new business opportunities It can also be highlighted that alumni who are re-hired stay longer and cost less to onboard than talent new to the organization Also Alumni provide great referrals and are excellent often proactive ambassadors for the company brand

In short these networks are very beneficial to the companies as well as the alumnis due to which its becoming more popular and very important Few companies that have seen the trend and adapted to it are ndash Deloitte Ernst amp Young McKinsey amp Company and Bain amp Company

Thus Alumni networks are seen as

- A key potential driver of competitive advantage for employers- A rich untapped source of innovation human talent and business relationships- Still emergent (in most sectors) and hence demanding clear management focus

AKNOWLEDGEMENT

We would like to thank Ms Yesha Sheth for giving us this topic We would also like to thank her for her guidance and support throughout the project

BIBLIOGRAPHY

wwwselectmindscom

wwwclcexecutiveboardcom

wwwxingcom

wwwfirsttuesdaych

wwwwikipediacom

wwwencyclopediacom

The lesson could well be applied to many other knowledge-based industries

While itrsquos clear that alumni networks can play a key role in an organizationrsquos success itrsquos important to remember that not just any kind of network will do The costs of running a manual or unstructured alumni network can be high Alumni networks that automate repetitive tasks and shift the maintenance of contact information to former employees will deliver a return on your investment

The methods most companies have used to keep in touch with their alumni have until recently been primarily informal inefficient and left to individuals to create ndash rather than a company-wide initiative But as Tarlow says ldquoIf you donrsquot have the database or tools itrsquos very time-consuming Therersquos no immediate return on your investmentrdquo

Tarlow cites the act of sending a holiday card to former employees as a simple gesture that shows employees you remember them and valued their service It can have positive results as long as sending the card isnrsquot a time-consuming costly process

Automated alumni networks can also handle registration event management job postings and news publication with minimal staff intervention

ACTIVITIES CONTRIBUTING TO AN EFFECTIVE CORPORATE ALUMNI NETWORK

Organizations face three main challenges when managing their alumni hiring programs gaining the active participation of alumni in the network targeting re-recruiting efforts at the alumni segments most likely to drive quality of hire and monitoring the health of and returns from the network Listed below are a few guidelines that companies may wish to consider as they confront these challenges

Dr i v e A c t i v e Participation in the Ne t w ork

1 Highlight compelling value proposition for participation in the networkmdashOrganizations often spend a significant amount of timeresources creating their corporate alumni network but underinvest in marketing strategies to increase participation rates One method for driving interest in the initiative is to highlight the benefits of joining the network some of which include following

Access to a group that engages in social events professional training volunteering andor provides an opportunity for alumni to share information on jobs and careers as well as leads and references for business ventures

Discounts on products or services

2 Make employees aware of the corporate alumni network during the exit processmdashInternal analysis from organizations such as Ernst amp Young suggests that the vast majority of alumni return to the organization soon after their initial departure thus organizations may want to provide employees with the following information during the exit proces sign-up procedures network benefits and scope of the network (see page 3 for further details from Ernst amp Young alumnirecruiting outreach program)

Target the Al umni Segments Most Likel y to Dri ve Q uality of Hire

3 Focus on high-value corporate alumni segmentsmdashFocusing efforts on former employees who were top performers or those who demonstrated a strong commitment to the job or company helps ensure a higher quality of network members In addition some organizations extend the scope of their corporate alumni program to include those who were not permanent full-time employees such as interns or contractors The list below suggests employee segments to target for the program

Top performers who left voluntarily Individuals who occupied key positions Individuals with key skills contacts or experience Individuals leaving to pursue further education in disciplinescritical to company

operations Retirees who may wish to return to employment High-performing interns or contractors

Build a D a shboard to M easure O v e r all Program Success and Track A lumni S e gments that Generate Large Number of Qua l ity Re-hires

4 Build and monitor metrics specific to the alumni network programmdashBuilding a dashboard with program-specific qualitative and quantitative metrics helps companies to monitor the overall health of their network and also make principled decisions on where to over- or under-invest in the future (eg former high performing internscontractors may have a higher conversion rate than top performers who left voluntarily so companies would therefore host more events for this segment) A list of potential metrics is included in the table below

Table 1 Checklist of Alumni Network Metrics

Quantitative Metrics

Qualitative Metrics

9 Cost per hire of corporate alumni vs regular hires9 Time to fill for corporate alumni vs regular hires9 Number of corporate alumni entered in program database9 Number of corporate alumni hired9 Number of referrals made by corporate alumni9 Number of hires generated by corporate alumni referrals9 Retention rate for corporate alumni

9 Employee engagement levels of corporate alumni vs hires from other channels

9 Additional skills and experiences brought to the

organization as a result of rehiring corporate alumni

CASE STUDY

Alumni linked in to old firms

This is a summary of an article originally published by LM SIXEL in the Houston Chronicle on Feb 3rd 2010

Janet Roth wasnt looking for a new job But her neighbour a former colleague at Deloitte encouraged Roth to join the firms online network for former employees and retirees Roth had worked at Deloitte for seven years leaving in 1996 to join one of its clients Late one night Roth was scrolling through Deloittes alumni site and saw a job opening that sounded interesting She applied went through a streamlined interview process and rejoined Deloitte in 2007 She joined the network mostly for social reasons ldquobut I ended up with a jobrdquo said Roth who is now senior manager in the mergers and acquisitions group in Houston It used to be that when you walked out the door that was it The working relationship was over once you turned in your ID badge and collected your last paycheck

But many companies are reconsidering that strategy After all skilled employees arent that easy to find especially ones who know the corporate culture So companies have taken a page from social sites and launched their own alumni networks The online sites which typically are controlled by individual companies like Deloitte are a way for ex-employees to connect with their former bosses and former co-workers mdash and maybe boomerang back often with newly acquired skills

New skills

Its efficient said Cathy Clonts president of Alumni Web Services which designs alumni networks for corporate clients Members update their contact information and any new skills they acquire Companies in turn can data-mine to find the skills theyre looking for

Its also a way a company can promote its own brand to a group that is already loyal Clonts said Deloitte likes to refer to the members of its AlumNet as ldquocolleagues for liferdquo said Coleman Rowland a partner in energy and resource practices in Houston He said Deloittes alumni network has become such an important business imperative that the firm has seven regional alumni network coordinators around the nation who keep up with the entries Of the 100000 alumni nationwide who left the firm in good standing and are eligible to join Deloittes network 56000 have registered Of those 4000 are in Houston

No more ledgers

In the past the firm kept up with its former employees by updating addresses in ledgers and spreadsheets But that wasnt easy especially when people move so frequently Roth for example moved from Houston to Minnesota to Florida and back to Houston in a series of corporate transfers ldquoDeloitte lost track of me raising three kidsrdquo she said with a laugh It took

running into Rowland who mentioned the network for Roth to reconnect with her old firm Clients and other ldquofriends of the firmrdquo cant get onto the network to troll for possible job candidates but the firm does list its job openings as a courtesy Thats how one of its clients a non-profit found its controller Rowland said And it didnt have to pay any recruiting fees

The Deloitte network which is more LinkedIn than Facebook isnt set up as a chat site or a place to extol the pleasures of retirement Members however can send e-mails to each other through the Deloitte server ldquoIts a way to really expand your networkrdquo Roth said

CONCLUSION

A company alumni network is made to remain in contact and maintain relationships with former employees This offers organizations a new resource for enhancing organizational capabilities Though making formal corporate alumni networks has recently become very important they have been loosely formed and utilized since as long as there have been companies and employees who leave them ndash by letter mailings volunteer groups gatherings etc

Adding to this social networking is redefining the way we interact with colleagues corporate alumni and business partners Forward-thinking employers recognize that investing in life-long relationships through comprehensive alumni programs carries measurable value in recruitment employment branding and new business development

Companies have realised that alumni provide an inside track to new business opportunities It can also be highlighted that alumni who are re-hired stay longer and cost less to onboard than talent new to the organization Also Alumni provide great referrals and are excellent often proactive ambassadors for the company brand

In short these networks are very beneficial to the companies as well as the alumnis due to which its becoming more popular and very important Few companies that have seen the trend and adapted to it are ndash Deloitte Ernst amp Young McKinsey amp Company and Bain amp Company

Thus Alumni networks are seen as

- A key potential driver of competitive advantage for employers- A rich untapped source of innovation human talent and business relationships- Still emergent (in most sectors) and hence demanding clear management focus

AKNOWLEDGEMENT

We would like to thank Ms Yesha Sheth for giving us this topic We would also like to thank her for her guidance and support throughout the project

BIBLIOGRAPHY

wwwselectmindscom

wwwclcexecutiveboardcom

wwwxingcom

wwwfirsttuesdaych

wwwwikipediacom

wwwencyclopediacom

ACTIVITIES CONTRIBUTING TO AN EFFECTIVE CORPORATE ALUMNI NETWORK

Organizations face three main challenges when managing their alumni hiring programs gaining the active participation of alumni in the network targeting re-recruiting efforts at the alumni segments most likely to drive quality of hire and monitoring the health of and returns from the network Listed below are a few guidelines that companies may wish to consider as they confront these challenges

Dr i v e A c t i v e Participation in the Ne t w ork

1 Highlight compelling value proposition for participation in the networkmdashOrganizations often spend a significant amount of timeresources creating their corporate alumni network but underinvest in marketing strategies to increase participation rates One method for driving interest in the initiative is to highlight the benefits of joining the network some of which include following

Access to a group that engages in social events professional training volunteering andor provides an opportunity for alumni to share information on jobs and careers as well as leads and references for business ventures

Discounts on products or services

2 Make employees aware of the corporate alumni network during the exit processmdashInternal analysis from organizations such as Ernst amp Young suggests that the vast majority of alumni return to the organization soon after their initial departure thus organizations may want to provide employees with the following information during the exit proces sign-up procedures network benefits and scope of the network (see page 3 for further details from Ernst amp Young alumnirecruiting outreach program)

Target the Al umni Segments Most Likel y to Dri ve Q uality of Hire

3 Focus on high-value corporate alumni segmentsmdashFocusing efforts on former employees who were top performers or those who demonstrated a strong commitment to the job or company helps ensure a higher quality of network members In addition some organizations extend the scope of their corporate alumni program to include those who were not permanent full-time employees such as interns or contractors The list below suggests employee segments to target for the program

Top performers who left voluntarily Individuals who occupied key positions Individuals with key skills contacts or experience Individuals leaving to pursue further education in disciplinescritical to company

operations Retirees who may wish to return to employment High-performing interns or contractors

Build a D a shboard to M easure O v e r all Program Success and Track A lumni S e gments that Generate Large Number of Qua l ity Re-hires

4 Build and monitor metrics specific to the alumni network programmdashBuilding a dashboard with program-specific qualitative and quantitative metrics helps companies to monitor the overall health of their network and also make principled decisions on where to over- or under-invest in the future (eg former high performing internscontractors may have a higher conversion rate than top performers who left voluntarily so companies would therefore host more events for this segment) A list of potential metrics is included in the table below

Table 1 Checklist of Alumni Network Metrics

Quantitative Metrics

Qualitative Metrics

9 Cost per hire of corporate alumni vs regular hires9 Time to fill for corporate alumni vs regular hires9 Number of corporate alumni entered in program database9 Number of corporate alumni hired9 Number of referrals made by corporate alumni9 Number of hires generated by corporate alumni referrals9 Retention rate for corporate alumni

9 Employee engagement levels of corporate alumni vs hires from other channels

9 Additional skills and experiences brought to the

organization as a result of rehiring corporate alumni

CASE STUDY

Alumni linked in to old firms

This is a summary of an article originally published by LM SIXEL in the Houston Chronicle on Feb 3rd 2010

Janet Roth wasnt looking for a new job But her neighbour a former colleague at Deloitte encouraged Roth to join the firms online network for former employees and retirees Roth had worked at Deloitte for seven years leaving in 1996 to join one of its clients Late one night Roth was scrolling through Deloittes alumni site and saw a job opening that sounded interesting She applied went through a streamlined interview process and rejoined Deloitte in 2007 She joined the network mostly for social reasons ldquobut I ended up with a jobrdquo said Roth who is now senior manager in the mergers and acquisitions group in Houston It used to be that when you walked out the door that was it The working relationship was over once you turned in your ID badge and collected your last paycheck

But many companies are reconsidering that strategy After all skilled employees arent that easy to find especially ones who know the corporate culture So companies have taken a page from social sites and launched their own alumni networks The online sites which typically are controlled by individual companies like Deloitte are a way for ex-employees to connect with their former bosses and former co-workers mdash and maybe boomerang back often with newly acquired skills

New skills

Its efficient said Cathy Clonts president of Alumni Web Services which designs alumni networks for corporate clients Members update their contact information and any new skills they acquire Companies in turn can data-mine to find the skills theyre looking for

Its also a way a company can promote its own brand to a group that is already loyal Clonts said Deloitte likes to refer to the members of its AlumNet as ldquocolleagues for liferdquo said Coleman Rowland a partner in energy and resource practices in Houston He said Deloittes alumni network has become such an important business imperative that the firm has seven regional alumni network coordinators around the nation who keep up with the entries Of the 100000 alumni nationwide who left the firm in good standing and are eligible to join Deloittes network 56000 have registered Of those 4000 are in Houston

No more ledgers

In the past the firm kept up with its former employees by updating addresses in ledgers and spreadsheets But that wasnt easy especially when people move so frequently Roth for example moved from Houston to Minnesota to Florida and back to Houston in a series of corporate transfers ldquoDeloitte lost track of me raising three kidsrdquo she said with a laugh It took

running into Rowland who mentioned the network for Roth to reconnect with her old firm Clients and other ldquofriends of the firmrdquo cant get onto the network to troll for possible job candidates but the firm does list its job openings as a courtesy Thats how one of its clients a non-profit found its controller Rowland said And it didnt have to pay any recruiting fees

The Deloitte network which is more LinkedIn than Facebook isnt set up as a chat site or a place to extol the pleasures of retirement Members however can send e-mails to each other through the Deloitte server ldquoIts a way to really expand your networkrdquo Roth said

CONCLUSION

A company alumni network is made to remain in contact and maintain relationships with former employees This offers organizations a new resource for enhancing organizational capabilities Though making formal corporate alumni networks has recently become very important they have been loosely formed and utilized since as long as there have been companies and employees who leave them ndash by letter mailings volunteer groups gatherings etc

Adding to this social networking is redefining the way we interact with colleagues corporate alumni and business partners Forward-thinking employers recognize that investing in life-long relationships through comprehensive alumni programs carries measurable value in recruitment employment branding and new business development

Companies have realised that alumni provide an inside track to new business opportunities It can also be highlighted that alumni who are re-hired stay longer and cost less to onboard than talent new to the organization Also Alumni provide great referrals and are excellent often proactive ambassadors for the company brand

In short these networks are very beneficial to the companies as well as the alumnis due to which its becoming more popular and very important Few companies that have seen the trend and adapted to it are ndash Deloitte Ernst amp Young McKinsey amp Company and Bain amp Company

Thus Alumni networks are seen as

- A key potential driver of competitive advantage for employers- A rich untapped source of innovation human talent and business relationships- Still emergent (in most sectors) and hence demanding clear management focus

AKNOWLEDGEMENT

We would like to thank Ms Yesha Sheth for giving us this topic We would also like to thank her for her guidance and support throughout the project

BIBLIOGRAPHY

wwwselectmindscom

wwwclcexecutiveboardcom

wwwxingcom

wwwfirsttuesdaych

wwwwikipediacom

wwwencyclopediacom

Top performers who left voluntarily Individuals who occupied key positions Individuals with key skills contacts or experience Individuals leaving to pursue further education in disciplinescritical to company

operations Retirees who may wish to return to employment High-performing interns or contractors

Build a D a shboard to M easure O v e r all Program Success and Track A lumni S e gments that Generate Large Number of Qua l ity Re-hires

4 Build and monitor metrics specific to the alumni network programmdashBuilding a dashboard with program-specific qualitative and quantitative metrics helps companies to monitor the overall health of their network and also make principled decisions on where to over- or under-invest in the future (eg former high performing internscontractors may have a higher conversion rate than top performers who left voluntarily so companies would therefore host more events for this segment) A list of potential metrics is included in the table below

Table 1 Checklist of Alumni Network Metrics

Quantitative Metrics

Qualitative Metrics

9 Cost per hire of corporate alumni vs regular hires9 Time to fill for corporate alumni vs regular hires9 Number of corporate alumni entered in program database9 Number of corporate alumni hired9 Number of referrals made by corporate alumni9 Number of hires generated by corporate alumni referrals9 Retention rate for corporate alumni

9 Employee engagement levels of corporate alumni vs hires from other channels

9 Additional skills and experiences brought to the

organization as a result of rehiring corporate alumni

CASE STUDY

Alumni linked in to old firms

This is a summary of an article originally published by LM SIXEL in the Houston Chronicle on Feb 3rd 2010

Janet Roth wasnt looking for a new job But her neighbour a former colleague at Deloitte encouraged Roth to join the firms online network for former employees and retirees Roth had worked at Deloitte for seven years leaving in 1996 to join one of its clients Late one night Roth was scrolling through Deloittes alumni site and saw a job opening that sounded interesting She applied went through a streamlined interview process and rejoined Deloitte in 2007 She joined the network mostly for social reasons ldquobut I ended up with a jobrdquo said Roth who is now senior manager in the mergers and acquisitions group in Houston It used to be that when you walked out the door that was it The working relationship was over once you turned in your ID badge and collected your last paycheck

But many companies are reconsidering that strategy After all skilled employees arent that easy to find especially ones who know the corporate culture So companies have taken a page from social sites and launched their own alumni networks The online sites which typically are controlled by individual companies like Deloitte are a way for ex-employees to connect with their former bosses and former co-workers mdash and maybe boomerang back often with newly acquired skills

New skills

Its efficient said Cathy Clonts president of Alumni Web Services which designs alumni networks for corporate clients Members update their contact information and any new skills they acquire Companies in turn can data-mine to find the skills theyre looking for

Its also a way a company can promote its own brand to a group that is already loyal Clonts said Deloitte likes to refer to the members of its AlumNet as ldquocolleagues for liferdquo said Coleman Rowland a partner in energy and resource practices in Houston He said Deloittes alumni network has become such an important business imperative that the firm has seven regional alumni network coordinators around the nation who keep up with the entries Of the 100000 alumni nationwide who left the firm in good standing and are eligible to join Deloittes network 56000 have registered Of those 4000 are in Houston

No more ledgers

In the past the firm kept up with its former employees by updating addresses in ledgers and spreadsheets But that wasnt easy especially when people move so frequently Roth for example moved from Houston to Minnesota to Florida and back to Houston in a series of corporate transfers ldquoDeloitte lost track of me raising three kidsrdquo she said with a laugh It took

running into Rowland who mentioned the network for Roth to reconnect with her old firm Clients and other ldquofriends of the firmrdquo cant get onto the network to troll for possible job candidates but the firm does list its job openings as a courtesy Thats how one of its clients a non-profit found its controller Rowland said And it didnt have to pay any recruiting fees

The Deloitte network which is more LinkedIn than Facebook isnt set up as a chat site or a place to extol the pleasures of retirement Members however can send e-mails to each other through the Deloitte server ldquoIts a way to really expand your networkrdquo Roth said

CONCLUSION

A company alumni network is made to remain in contact and maintain relationships with former employees This offers organizations a new resource for enhancing organizational capabilities Though making formal corporate alumni networks has recently become very important they have been loosely formed and utilized since as long as there have been companies and employees who leave them ndash by letter mailings volunteer groups gatherings etc

Adding to this social networking is redefining the way we interact with colleagues corporate alumni and business partners Forward-thinking employers recognize that investing in life-long relationships through comprehensive alumni programs carries measurable value in recruitment employment branding and new business development

Companies have realised that alumni provide an inside track to new business opportunities It can also be highlighted that alumni who are re-hired stay longer and cost less to onboard than talent new to the organization Also Alumni provide great referrals and are excellent often proactive ambassadors for the company brand

In short these networks are very beneficial to the companies as well as the alumnis due to which its becoming more popular and very important Few companies that have seen the trend and adapted to it are ndash Deloitte Ernst amp Young McKinsey amp Company and Bain amp Company

Thus Alumni networks are seen as

- A key potential driver of competitive advantage for employers- A rich untapped source of innovation human talent and business relationships- Still emergent (in most sectors) and hence demanding clear management focus

AKNOWLEDGEMENT

We would like to thank Ms Yesha Sheth for giving us this topic We would also like to thank her for her guidance and support throughout the project

BIBLIOGRAPHY

wwwselectmindscom

wwwclcexecutiveboardcom

wwwxingcom

wwwfirsttuesdaych

wwwwikipediacom

wwwencyclopediacom

CASE STUDY

Alumni linked in to old firms

This is a summary of an article originally published by LM SIXEL in the Houston Chronicle on Feb 3rd 2010

Janet Roth wasnt looking for a new job But her neighbour a former colleague at Deloitte encouraged Roth to join the firms online network for former employees and retirees Roth had worked at Deloitte for seven years leaving in 1996 to join one of its clients Late one night Roth was scrolling through Deloittes alumni site and saw a job opening that sounded interesting She applied went through a streamlined interview process and rejoined Deloitte in 2007 She joined the network mostly for social reasons ldquobut I ended up with a jobrdquo said Roth who is now senior manager in the mergers and acquisitions group in Houston It used to be that when you walked out the door that was it The working relationship was over once you turned in your ID badge and collected your last paycheck

But many companies are reconsidering that strategy After all skilled employees arent that easy to find especially ones who know the corporate culture So companies have taken a page from social sites and launched their own alumni networks The online sites which typically are controlled by individual companies like Deloitte are a way for ex-employees to connect with their former bosses and former co-workers mdash and maybe boomerang back often with newly acquired skills

New skills

Its efficient said Cathy Clonts president of Alumni Web Services which designs alumni networks for corporate clients Members update their contact information and any new skills they acquire Companies in turn can data-mine to find the skills theyre looking for

Its also a way a company can promote its own brand to a group that is already loyal Clonts said Deloitte likes to refer to the members of its AlumNet as ldquocolleagues for liferdquo said Coleman Rowland a partner in energy and resource practices in Houston He said Deloittes alumni network has become such an important business imperative that the firm has seven regional alumni network coordinators around the nation who keep up with the entries Of the 100000 alumni nationwide who left the firm in good standing and are eligible to join Deloittes network 56000 have registered Of those 4000 are in Houston

No more ledgers

In the past the firm kept up with its former employees by updating addresses in ledgers and spreadsheets But that wasnt easy especially when people move so frequently Roth for example moved from Houston to Minnesota to Florida and back to Houston in a series of corporate transfers ldquoDeloitte lost track of me raising three kidsrdquo she said with a laugh It took

running into Rowland who mentioned the network for Roth to reconnect with her old firm Clients and other ldquofriends of the firmrdquo cant get onto the network to troll for possible job candidates but the firm does list its job openings as a courtesy Thats how one of its clients a non-profit found its controller Rowland said And it didnt have to pay any recruiting fees

The Deloitte network which is more LinkedIn than Facebook isnt set up as a chat site or a place to extol the pleasures of retirement Members however can send e-mails to each other through the Deloitte server ldquoIts a way to really expand your networkrdquo Roth said

CONCLUSION

A company alumni network is made to remain in contact and maintain relationships with former employees This offers organizations a new resource for enhancing organizational capabilities Though making formal corporate alumni networks has recently become very important they have been loosely formed and utilized since as long as there have been companies and employees who leave them ndash by letter mailings volunteer groups gatherings etc

Adding to this social networking is redefining the way we interact with colleagues corporate alumni and business partners Forward-thinking employers recognize that investing in life-long relationships through comprehensive alumni programs carries measurable value in recruitment employment branding and new business development

Companies have realised that alumni provide an inside track to new business opportunities It can also be highlighted that alumni who are re-hired stay longer and cost less to onboard than talent new to the organization Also Alumni provide great referrals and are excellent often proactive ambassadors for the company brand

In short these networks are very beneficial to the companies as well as the alumnis due to which its becoming more popular and very important Few companies that have seen the trend and adapted to it are ndash Deloitte Ernst amp Young McKinsey amp Company and Bain amp Company

Thus Alumni networks are seen as

- A key potential driver of competitive advantage for employers- A rich untapped source of innovation human talent and business relationships- Still emergent (in most sectors) and hence demanding clear management focus

AKNOWLEDGEMENT

We would like to thank Ms Yesha Sheth for giving us this topic We would also like to thank her for her guidance and support throughout the project

BIBLIOGRAPHY

wwwselectmindscom

wwwclcexecutiveboardcom

wwwxingcom

wwwfirsttuesdaych

wwwwikipediacom

wwwencyclopediacom

running into Rowland who mentioned the network for Roth to reconnect with her old firm Clients and other ldquofriends of the firmrdquo cant get onto the network to troll for possible job candidates but the firm does list its job openings as a courtesy Thats how one of its clients a non-profit found its controller Rowland said And it didnt have to pay any recruiting fees

The Deloitte network which is more LinkedIn than Facebook isnt set up as a chat site or a place to extol the pleasures of retirement Members however can send e-mails to each other through the Deloitte server ldquoIts a way to really expand your networkrdquo Roth said

CONCLUSION

A company alumni network is made to remain in contact and maintain relationships with former employees This offers organizations a new resource for enhancing organizational capabilities Though making formal corporate alumni networks has recently become very important they have been loosely formed and utilized since as long as there have been companies and employees who leave them ndash by letter mailings volunteer groups gatherings etc

Adding to this social networking is redefining the way we interact with colleagues corporate alumni and business partners Forward-thinking employers recognize that investing in life-long relationships through comprehensive alumni programs carries measurable value in recruitment employment branding and new business development

Companies have realised that alumni provide an inside track to new business opportunities It can also be highlighted that alumni who are re-hired stay longer and cost less to onboard than talent new to the organization Also Alumni provide great referrals and are excellent often proactive ambassadors for the company brand

In short these networks are very beneficial to the companies as well as the alumnis due to which its becoming more popular and very important Few companies that have seen the trend and adapted to it are ndash Deloitte Ernst amp Young McKinsey amp Company and Bain amp Company

Thus Alumni networks are seen as

- A key potential driver of competitive advantage for employers- A rich untapped source of innovation human talent and business relationships- Still emergent (in most sectors) and hence demanding clear management focus

AKNOWLEDGEMENT

We would like to thank Ms Yesha Sheth for giving us this topic We would also like to thank her for her guidance and support throughout the project

BIBLIOGRAPHY

wwwselectmindscom

wwwclcexecutiveboardcom

wwwxingcom

wwwfirsttuesdaych

wwwwikipediacom

wwwencyclopediacom

CONCLUSION

A company alumni network is made to remain in contact and maintain relationships with former employees This offers organizations a new resource for enhancing organizational capabilities Though making formal corporate alumni networks has recently become very important they have been loosely formed and utilized since as long as there have been companies and employees who leave them ndash by letter mailings volunteer groups gatherings etc

Adding to this social networking is redefining the way we interact with colleagues corporate alumni and business partners Forward-thinking employers recognize that investing in life-long relationships through comprehensive alumni programs carries measurable value in recruitment employment branding and new business development

Companies have realised that alumni provide an inside track to new business opportunities It can also be highlighted that alumni who are re-hired stay longer and cost less to onboard than talent new to the organization Also Alumni provide great referrals and are excellent often proactive ambassadors for the company brand

In short these networks are very beneficial to the companies as well as the alumnis due to which its becoming more popular and very important Few companies that have seen the trend and adapted to it are ndash Deloitte Ernst amp Young McKinsey amp Company and Bain amp Company

Thus Alumni networks are seen as

- A key potential driver of competitive advantage for employers- A rich untapped source of innovation human talent and business relationships- Still emergent (in most sectors) and hence demanding clear management focus

AKNOWLEDGEMENT

We would like to thank Ms Yesha Sheth for giving us this topic We would also like to thank her for her guidance and support throughout the project

BIBLIOGRAPHY

wwwselectmindscom

wwwclcexecutiveboardcom

wwwxingcom

wwwfirsttuesdaych

wwwwikipediacom

wwwencyclopediacom

AKNOWLEDGEMENT

We would like to thank Ms Yesha Sheth for giving us this topic We would also like to thank her for her guidance and support throughout the project

BIBLIOGRAPHY

wwwselectmindscom

wwwclcexecutiveboardcom

wwwxingcom

wwwfirsttuesdaych

wwwwikipediacom

wwwencyclopediacom

CREDITS

YASH AGARWAL ndash 62

PAWAN

KINNARI MEHTA

VINAYAK RAJPUROHIT

NIYAM HARIA

MILONI SHAH - 106

• BUSINESS DEVELOPMENT AS A CONTACT SPORT