Company Alumni Networks Maintain Connections
Corinne Marasco		Printer-friendly version

In July 2001, a Wall Street Journal article announced that Procter & Gamble was cutting 16% of its 110,000 worldwide workforce. The rest of the two-paragraph item announced the formation of the P&G Alumni Network, noting that many of the people leaving P&G have never worked elsewhere since the company usually hires straight out of school and promotes heavily from within.

The success of P&G's alumni network seems to be more the exception than the rule. Most companies don't give their ex-employees much thought; they seem to be more concerned about talent drain and how to hang on to the good employees they currently have. In fact, the number of distinguished P&G alumni that have moved on to bigger things—including Meg Whitman of eBay; Steve Case of AOL; Scott Cook of Intuit; Jeffrey Immelt of General Electric; and W. James McNerney of 3M—has led the company to realize that they are a good source of recruiting public relations.

Company alumni networks have long been popular with the professional services industry, based on the university model of alumni relations. This is probably due to the fact that some sectors, like professional services, recognize the benefits more than others, like manufacturing firms.

One of the few manufacturing firms to establish an alumni network is Agilent Technologies. In 2001, Agilent launched its own comprehensive, online alumni network via SelectMinds.com as a pilot project. The site attracted about 1,000 former Agilent employees, 280 of whom were retirees.

"It was a great start," says Vicki Lynn, Manager of Global Staffing Programs for Agilent. "The initial plan was to develop the network as a recruiting channel and to build our brand through increased goodwill with alumni."

Agilent never realized its original goal for the site because the economy turned and hiring dropped. The site has been suspended for now but, Lynn says, the economic downturn has given her the opportunity to put a strategy in place to respond when the economic situation improves.

Now, the focus of Agilent's alumni program will be to continue to build the Agilent brand, re-recruit star former employees, and focus on more strategic hiring areas like marketing, sales, and R&D. "We are eager to pick up where we left off when we restart the program," Lynn says.

In a knowledge economy, people—and ideas—are more mobile than ever. It's essential for people to stay in touch with each other and their former employers, regardless of the industry where they work, because of the many benefits to maintaining those relationships:

Rehires and referrals - Alumni are a valuable source of new employee referrals because they can judge whether or not a potential employee is a good fit. Alumni may also choose to return to the company some day; such rehires are referred to as "boomerangs." It costs half as much to rehire an employee as it does a brand new employee and rehires are also more productive initially. In both cases, the risk of mishire is greatly reduced.

Returning the investment in human capital - Companies and employees make an investment in each other. Alumni networks are a way for businesses to get value from people even after they've left the company by tapping the brainpower of former employees—which is now driving innovation at other companies. Also, alumni who find new jobs or start their own ventures are more likely to look first to their previous employers when they're seeking business partners or opportunities.

Ideas and intelligence - Alumni can help their ex-employers stay ahead of trends and new technologies as well as understanding what their competitors are doing.

Ambassadors, marketers, and lobbyists - Alumni can end up in places where they have influence regarding their former company's products and services.

Investors - Alumni hold company stock in their retirement plans, so good relations with company alumni will increase the likelihood that they'll hold on to those shares for the long run—and maybe even buy more. The same theory applies to their friends and relatives who have their own stock portfolios, too.

There are many ways to establish an alumni network. It can be an official company initiative; for example, the management-consulting firm Bain & Company manages its own alumni network, BAINWeb, as do Deloitte Consulting and McKinsey & Company. All of them offer similar services, such as alumni profiles and updates, alumni directories, calendar of events, and other benefits. Not only do these companies believe that it's worthwhile staying in touch with former employees, it also sends the message to potential employees that these companies are good training grounds for future success.

In contrast, P&G's network represents a grassroots networking effort. The original concept was a Web site where former employees could keep in touch with each other. The downsizing in 2001 led to the creation of a job-search area since there were many former P&G employees who were in a position to hire their former colleagues. The Web site has no formal affiliation with P&G although the company supports the alumni's efforts and a number of former P&G executives also serve on the Advisory Board.

Then there are third-party solutions. Two major players in this area are CorporateAlumni.com and SelectMinds.com. Both companies build, manage, and host online alumni communities featuring services such as alumni directories, information posting, content creation, and messaging systems. These solutions allow the company to take a hands-off approach to alumni networking. CorporateAlumni.com has been around since 1998; SelectMinds.com since 1999.

Yahoo! Groups is another third-party solution for establishing alumni networks. For example hp_alumni is the Hewlett Packard Alumni Association, which was established in February 2000 and has more than 2000 members. Its goal is to facilitate professional networking and communication among its membership through an online membership database, e-mail exchange, job and resume postings, and periodic networking meetings. (It is not affiliated with Hewlett-Packard.)

Regardless of how it's done, continued communications with alumni keeps people working with a company even after they move on—for whatever reason—resulting in a competitive advantage, lower recruiting and hiring costs, and new business opportunities for both sides.