Good Riddance or Good Business - How Should Companies Manage Alumni Relationships?
Should employers invest to keep alumni close, or simply let them go once they walk out the door?
In a world where employers face significant shortages in their critical workforce segments, some organizations are investing in structured alumni programs designed to keep former employees engaged and loyal after they leave. These kinds of programs take considerable effort and commitment. Are they worth the trouble?
Here’s the debate.
An alumni program can be a smart investment.
The value of keeping ex-workers close has a long- term payoff.
|You’ve already invested in recruiting and training your workforce. The incremental cost of keeping ex-employees close is a smart way to extend their value. You never know when you’ll need them back. Or when they might turn into a customer, client or supplier relationship.||Employees left for one reason or another. Their residual value is minimal. Let them leave and cut your losses.|
|Alumni can be valuable customers and advocates. You’ll be glad you kept up with them when they end up in the position of being able to buy your products and services.||For every ex-employee who might turn out to be a loyal advocate, there are three who won’t. Not very good odds.|
|The networking benefits of an alumni program can be an important part of your employee value proposition. For the most sought-after employees, it’s a proven recruiting tool.||What happens to people when they leave is not your problem – and it’s not your business.|
Alumni programs aren’t worth the trouble.
This may have value for some companies, but not many.
|An effective program requires buy-in at all levels of the organization – and who needs one more initiative right now. Put resources into current employees, not those who are walking out the door.||There’s a good chance your former employees are already creating an informal alumni program using online social networking. You need to get out ahead of this.|
|Where’s the payback? This requires a long-term view and our Board is looking for short-term returns.||If half of your former employees were loyal customers and allies today, you’d be well ahead of the game. That’s what a smart alumni program can do.|
|We’re doing just fine without it.||Maybe you’re doing fine now, but where will you be in two years when the business environment is completely reset? Alumni programs are effective innovations that can drive sustainable value. Alumni programs are proven ways of building your organization’s network – one that generates business and generates qualified leads on recruits with minimal investment.|
Ken Horner, Retired Principal, Advisor to the Deloitte Alumni Program
Guy Budinscak, Partner, Deloitte & Touche LLP
When it comes to alumni programs, there’s no “one size fits all” approach. Effectiveness varies greatly by industry, sector and company. That said, you might be surprised to learn about the wide range of programs already in place.
One client I work with uses an alumni program to reduce hiring costs for its seasonal, low-wage workforce. This company does physical inventory tracking and is able to re-recruit its best workers year after year. A large, global shipping company takes a similar approach, recouping millions in training costs by tapping into former employees for seasonal demand spikes.
At the other end of the spectrum, employers in the services sector – accounting, banking, consulting, healthcare, real estate, technology and others – routinely use alumni programs to support their efforts in both recruiting and sales. Wouldn’t you be happy to find out that the prospective customer you’re selling to is one of your most loyal former employees? A well-executed alumni program is one of the most effective ways to ensure that loyalty is sustained.
For companies in other industries, the case of an alumni program may not be so straightforward. Businesses where workers are largely interchangeable and easily replaced, for example, may not be good candidates for structured alumni initiatives. On the other hand, organizations with huge workforces, such as food services companies and retailers, would do well to build relationships with former employees to keep them coming back – as customers.
It’s also important to remember that you may have an alumni program and not even know about it. Social networking through sites like Facebook or LinkedIn are only the tip of the iceberg for former employees who want to connect with others who have moved out. Nature abhors a vacuum and if you’re not filling the gaps with a proactive alumni program, there’s a good chance your ex-employees will fill it for you and leave you out when it comes to shaping opinions.
Finally, don’t discount the potential value of an alumni program to workers you’re recruiting today. New employees are rarely ready to make life-long commitments and that means planning for their eventual departure even as they’re walking in the door. In our own organization, more than 20 percent of the people we hire each year are what we call “boomerangs.” The reason they’re willing to come back into our firm is simple: we treat them fairly and make personal connections while they’re here and our alumni program builds the bridges necessary to keep them engaged.
Mike Moore, ArcView Associates, Senior Partner
If your organization is a professional services business where employees can easily become future clients, managing the separation process and alumni relations is vital to your firm’s reputation. Companies spend millions on marketing to create new relationships with executives who are not familiar with their firms. Why not invest to make sure that your former employees have a good impression of their careers with your organization – and continue the feeling that your firm cares about them?
The best model I’ve seen is one in which there is a close linkage between the HR and alumni relations staff. When professionals begin to fall short on their promotion track, HR can be alerted to identify potential outside opportunities for them. These employees get the message that the firm cares about them enough to offer good job leads where other alumni have been successful. These individuals leave with continued allegiance to the firm.
The model is simple. Create a firm of professionals who believe they are members of an elite family. Establish a strong outplacement organization within your HR function. Invest in an alumni relations program that features events, email newsletters, social media and networking groups established by your firm. Then you can expect to count on selling services to your alumni.
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