Economic downturns, mergers, and acquisitions all place pressure on organizations to curb labor costs. No time in the last decade has that tenet been more apparent than right now.
Layoffs, large or small, force organizations to cut loose the talent in which they have invested salary and training dollars. While talent released during a layoff today may seem like little more than an expense, tomorrow it could be the difference between success and failure.
World-class organizations need to develop a process that will allow the organization to quickly and easily “re-recruit” alumni with proven track records of success when economic conditions warrant hiring.
The solution that makes re-recruiting possible is a corporate alumni program. Alumni programs allow you to maintain a mutually beneficial relationship with former employees who may someday provide significant value again, providing you with an excuse to remain in contact and a mechanism to recruit them back quickly when needed.
Because so much great talent is being released into the labor market right now, it is a great time to either start a formal program or upgrade your existing corporate alumni or “boomerang” program.
Corporate Alumni Programs Can Also Increase Revenues
While the primary reason organizations develop alumni programs is recruiting-related, lots of research demonstrates that investing in corporate alumni programs increases the sales lead generation and deal closing capability of the organization.
As many sales professionals are seeing their jobs evaporate today, it makes perfect sense to partner with sales leaders to build a program that is designed to support both the recruiting and sales organizations mutually.
Leveraging sales professionals who have been let go as lead generators, brand builders, and in some cases, as customers provides added capability to the organization in a time of budget cuts and hiring freezes.
If you treat them right, former employees (i.e., corporate alumni) can be converted into “ambassadors” for your organization. Despite being laid-off, odds are that a significant number of former employees remain loyal and committed to your organization.
If you proactively build and maintain a relationship with them after they leave, they will continue to “talk up your firm” and maybe even become a customer when they land in a new role.
Program Goals and Benefits
Well-designed corporate alumni programs can benefit the organization in many ways. Some of the possible goals of corporate alumni programs include:
- To improve the quality of hires by rehiring top performers and innovators (boomerang rehires are low-cost, typically have higher retention rates and reach minimum productivity much more quickly than most external hires).
- To increase the number and the quality of employee referrals by expanding the program to include alumni.
- To strengthen the employer brand image throughout the industry.
- To increase retention rates among current employees by developing a stronger positive image.
- To increase the number of mentors available to current employees.
- To generate direct sales by making alumni customers.
- To increase the number of leads generated (customer referrals).
- To capture ideas and innovations from alumni.
- To get product assessment help.
- To get benchmarking help and to learn about industry best practices.
- To gather competitive intelligence.
- To get help from alumni in building strategic partnerships.
What Differentiates Great Programs From Average?
Firms like McKinsey and Microsoft were pioneers in formalizing relationships with their former employees. Other firms, like Deloitte, Ernst & Young, Booz Allen, and Bain, join the pioneers in operating successful corporate alumni programs with features that set them miles apart from the typical alumni program.
After years of research, I’ve identified 14 factors that clearly differentiate great programs. Whether you’re starting your own, upgrading your current program, or considering using a vendor to operate your program, it is important to incorporate these key differentiators:
- A strong business case. The most important differentiator is the perception of the program as a business initiative, not just another HR fad. Establishing the program as a business initiative requires that it be supported and budgeted by leaders because a clear connection has been made between operating a successful program and increased revenue/profit. At the best firms, the program manager works with the CFO’s office both to demonstrate the ROI of the program in terms of “dollar impact.” That means that the dollar value of bringing back top performers and the economic impact of having your former employees act as “brand and product ambassadors” has been quantified. In fact, at least one firm has made the argument that the corporate alumni program should be housed in business development rather than recruiting.
- It prioritizes alumni and treats them differently. While most programs treat all corporate alumni equally, the very best prioritize their alumni based on their future value to the organization. For example, if both Homer Simpson and Tiger Woods were both corporate alumni, it would not make sense to treat them both equally because one you would want to return and the other you wouldn’t. Obviously, Tiger would be more influential and well-connected and thus he could more effectively spread the word about the firm and its products. Target top performers, individuals with key skills, and innovators as potential boomerang rehires.
- They use technology. The days of running corporate alumni programs off of Excel spreadsheets are gone. The best firms and vendors use either customer-relationship management software or emerging social networking tools to keep track of alumni and effectively maintain the relationship. Alumni are contacted periodically with personalized information based on their individual needs and expectations. Web-based “alerts” are utilized to keep up with the activities and accomplishments of alumni.
- Dual goals of recruiting and development. The very best corporate alumni programs have a dual focus. While almost all programs focus on rehiring alumni, the very best also commit major resources into building an alumni network for business development purposes. The second focus is impactful because not every former employee can or would want to return but they can all help make referrals and positively spread the word. This business development component is especially important in tight-knit industries where most employees stay within the industry throughout their career.
- They utilize social networks. It’s been true for a long time that social networks are effective mechanisms for building and maintaining relationships. As a result, most corporate alumni programs leverage either public social networks or build private social networks to expand the scope of their program. The best programs leverage both, just as great recruiting organizations use multiple channels to reach target talent.
- They use metrics to continually improve. Traditionally, these programs were allowed to operate because they made logical sense. However, in a fast-changing world, the best programs have learned to use metrics to drive continuous improvement. The shift to “fact-based decisions” means that program emphasis and resources are continually shifted toward areas with a higher impact.
- Above 10% rehire rate. The very best programs produce exceptional results, which means that between 10% and 20% of all hires should be boomerangs. A significant percentage of business leads and sales should also be directly traced to your corporate alumni network.
- 100% electronic capability. Although face-to-face meetings are still necessary, the very best programs have the capability of working 24/7 around the world. That means that every key program element must be Web-based. Legacy paper-based systems are simply too slow and expensive.
- A dedicated alumni webpage. The very best alumni programs feature a webpage designed exclusively for corporate alumni. It might include forums, FAQs, blogs, learning wikis, podcasts, videos, and an alumni directory that can be sorted by name, location, and interests.
- It has a diversity and a global component. The best programs understand that diverse alumni and those with international backgrounds have needs that might differ from the average. As a result, they offer a range of information and options that can be tailored to fit individual needs.
- It utilizes a broad definition of alumni. In traditional programs, participants were exclusively full-time employees who voluntarily left. However, the best programs realize that there are a wide range of individuals who can act as firm ambassadors, so consider including laid-off workers; retired workers; former part-timers; contractors; interns; applicants who declined the position; and spouses of former employees.
- An onboarding component. Firms that want to excel begin educating employees during orientation about the firm’s expectation that this is a “lifelong” relationship. They build on that expectation by involving current employees with alumni. And should they leave the firm they participate in a “welcome interview” that welcomes them to the next phase of their relationship with the firm.
- A dedicated staff. The best firms have a dedicated staff that allows for continuity and allows the firm’s program to become a competitive advantage.
- Proactively improve the reasons for leaving. Rather than paying lip service to the under-lying causes that convinced some of the top employees to leave (bad managers; a lack of challenge/growth), the best programs confront these issues head on. So postpone exit interviews until well after separation. This way, you can identify the real cause of turnover, develop a formal process to minimize future turnover, and remove obstacles that may inhibit former employees from returning.
It’s unfortunate that the current economic climate is forcing firms to release so many valuable employees.
However, you can look at this as an opportunity to turn “lemons into lemonade” if you can maintain their interest in returning and if while they’re away, they continue to drive business to your firm.
Due to advances in technology and social networking, the cost of operating alumni programs is low while the ROI of alumni programs is higher than ever. Instead of considering those who have been forced to leave your firm as value-less, and those who opt to leave as traitors, simply look at departures not as a goodbye, but rather, as an “I will see you later.”