Alumni Networks Redefine Loyalty

There was a time when leaving a job meant your company might spring for a party—or maybe a gold watch if you’d been there long enough. You’d likely get a few hugs and a promise that you’ll be missed, but both employer and employee knew they’d likely never speak to each other again. Former employees were just that—people whose post-job connection with the company was limited to their retirement benefits. They were gone and mostly forgotten.

Nowadays, companies are realizing that there’s no need for such a clean breakup. Rather, they are treating ex-employees as “alumni” in the hopes that those people will think about their previous employer with the same fondness many have for their beloved alma maters.

In today’s day and age, it’s a relationship worth keeping. Companies can use alumni to get referrals, client business and input on issues that only someone who has been on the inside can understand. And former workers can get advice and job leads out of the bargain. They may even return to work at the company, armed with more experience and a greater number of connections.

“People and talent are not disposable goods,” says Angela Hills, executive vice president and managing director of North America at Cielo, a global talent acquisition and management solutions company based in Brookfield, Wis. “The old way was, once you’ve left, you’re gone,” she says. “There needs to be a change to the historically negative stigma many organizations had over people who have left,” says Hills, who serves on the board of directors for the Human Resources Management Association of Chicago.

Keeping in touch with former workers is, in itself, nothing new. Large corporations—especially consulting firms—have been maintaining ties with former workers for years to grow their client base and perhaps welcome previous workers back into the fold at higher levels. But with a changing global economy and shifting demographics, job-hopping has become more the rule than the exception, and companies of all sizes have gotten savvier, and more creative, about staying connected. Many offer ex-employees entry to formal alumni networks with tangible perks such as access to special events, referral incentives, and social networks or e-newsletters.

Indeed, the modern alumni network underscores the way that both workers and employers are redefining their relationship as the old model of lifetime employment at one company becomes a thing of the past. HR professionals must adapt by viewing workers as both transient resources as well as part of their larger community. It’s not unlike the philosophy behind school-based alumni networks, which are used to raise money and promote an institution’s brand by highlighting successful alumni and facilitating communication.

“Companies can no longer afford to treat their employees as family members [in terms of guaranteed work and benefits]. They can no longer afford to offer lifetime employment,” says Ben Casnocha, co-author, with LinkedIn co-founder Reid Hoffman and Chris Yeh, of The Alliance: Managing Talent in the Networked Age (Harvard Business Review Press, 2014). “At the same time, you actually need to have more-substantive relationships, and have real trust in your employees, if you want them to do great work.”

A New Employment Model

The reality is that companies are no longer a reliable source of long-term health and welfare benefits. A Towers Watson study in September 2014 showed that only 1 in 4 large employers continue to offer a pension plan to new employees. And the percentage of large firms offering retiree health care dropped from 66 percent in 1988 to 28 percent in 2013. Moreover, fewer than 1 in 5 workers are employed by a company offering those benefits, according to a study by the Kaiser Family Foundation.

Meanwhile, workers are feeling less tethered to one company. Members of the Millennial generation, born between roughly 1981 and 2000, will hold 12 to 15 jobs in their lifetimes, according to Forrester Research. Millennials view their work lives as encompassing not just numerous employers but also myriad careers.

Casnocha offers a modern model for the employer-employee relationship, moving from long stretches of work to what he calls “tours of duty”—a commitment for an employee to spend two to five years on a specific area of work. When LinkedIn executive chairman Hoffman founded the company, he set the tour at four years, with a discussion after two. After the tour, the worker might decide to do another tour at LinkedIn, or it might be decided, by mutual agreement, that his or her professional journey will continue somewhere else. That employee might well come back for another tour at LinkedIn after gaining experience elsewhere.

The concept changes the old compact between employer and employee—there isn’t lifelong devotion, but there’s no ill will upon departure, either. The model reflects a realistic mutual understanding of how the relationship between company and worker has changed. “We can reclaim the ideal of loyalty, commitment and follow-through,” Casnocha says, “but it does not mean you become a company man or view leaving as a betrayal.”

Meanwhile, changes in the economy have made for a more volatile and open employment market for both companies and workers. Globalization offers a broader talent pool to companies but also increases competition for that talent, according to a white paper prepared for XING, a social software platform based in Hamburg, Germany. While many companies had previously adopted a “fortress” policy that discouraged connections with former workers, those same employers are finding that such behavior can be self-defeating in today’s environment. With advances in information technology removing communication barriers among workers and their former employers, there’s simply no good reason not to keep in touch—and a lot of reasons why it makes sense to do so.

Why Alumni Networks Work

Benefits of creating a corporate alumni network include:

Branding. As “brand ambassadors,” former employees can help or harm the company by the way they talk about their work experience after leaving. This is why it’s so important to leave on good terms. Treating workers well during employment is a must, and helping them transition to other employment will encourage them to spread positive feedback to their networks on LinkedIn and Facebook and on company review sites such as Glassdoor.

New business. An employee may leave the company but come back as a client. That’s a benefit to both employer and worker, since the trust relationship is already there. “I consider my alumni folk to be one of my most important constituencies from a marketing perspective—someone we have a lifelong relationship with,” says Miki Tsusaka, senior partner in Boston Consulting Group’s (BCG’s) Tokyo office and head of the company’s global alumni department.

Industry intelligence. Former staffers can provide industry insight if they maintain friendly relationships with former employers. If Deloitte, which has 64,884 staffers worldwide, was putting together a proposal for a contract with another company and a Deloitte alumnus worked there, “we could pick up the phone and say, ‘Hi, what kind of information are you willing to give us?’ ” says Katie Weiser, a career coach who was previously the director of global alumni relations at Deloitte.

“Boomerangs.” Former employees may return to your company at some point with more diverse experience as well as insider knowledge that allows them to hit the ground running. Nina McQueen, senior director of benefits at LinkedIn and architect of the firm’s alumni network, knows this to be true because she’s done it. When she left Yahoo in the 1990s, it was still a small company with 1,300 workers. The then-head of HR, former Society for Human Resource Management board chair Libby Sartain, didn’t want her to go, but she kept in touch for five years. When another opportunity arose (Yahoo had 15,000 workers by then), Sartain re-recruited McQueen for a second tour of duty.

Employee referrals. Who better to recommend a candidate for an open position than someone who has worked at the company and knows the terrain? When Weiser was at Deloitte, the company gave alums a referral bonus if the recommended person stayed more than a year, she says.

Former workers, too, draw benefits from participating in an alumni network, including:

Job help. David Twitchell, SHRM-SCP, vice president of HR at New Hampshire Catholic Charities, says his former boss at a health care operation helped him find work after he was downsized. Alumni may also benefit from a job bank; Cindy Jackson, former global director of career development and alumni relations at Bain & Company, implemented one at Bain that advertised not just positions in the company but also jobs at other firms.

Jackson helped former employees with resume and career advice and still goes to Bain alumni get-togethers, although she now works as director of professional development at Foley Hoag, a Boston-based law firm.

Social interaction. George Boué, vice president of Stiles, a Fort Lauderdale, Fla.-based real estate company, still participates in a corporate alumni group from Nortel, a now-defunct telecommunications equipment manufacturer, 20 years after he first started working there. The group meets for happy hours. “There are people friendships,” Boué says, “but at the core, it’s [about] networking.”

These networks can help in people’s personal lives as well. Weiser, who participates in Deloitte’s alumni network, says if she was traveling to Australia, she wouldn’t hesitate to call a Deloitte receptionist there and ask for hotel recommendations. “They’re part of an extended network, part of a family that never, ever goes away,” she says.

Professional development. Keeping in touch through an alumni network means getting invites to company events and access to webcasts, which can help former workers keep apprised of what’s happening in their industry.

Who’s Doing It

BCG, which has 9,700 employees worldwide, has a motto: “Bleed BCG Green” (the company’s signature color). It’s a lifetime loyalty that is about mutual support and assistance, not necessarily direct employment, Tsusaka says. BCG has an alumni network that is 16,000 strong. Tsusaka calls members of the group “graduates” instead of ex-employees. Consulting by nature has always been fairly fluid, she acknowledges, and new employees understand they may stay just a few years and move on. Maintaining the alumni network serves the company well—many members end up being clients—and fills a need for connection among former employees, especially younger ones who are accustomed to staying in touch via social networking.

Employees might feel less inclined to keep in touch after they’ve been downsized, as many workers were during the Great Recession. But the offer of an alumni network can be welcome if the laid-off worker is treated with compassion and support. After Deloitte laid off 1,000 people in 2001, the company decided to help them deal with their shock and anger instead of just giving them pink slips, Weiser says. It provided career coaches to counsel people and help them find new jobs. And when Stiles let some people go in 2009, it encouraged them to keep in touch and wound up rehiring a lot of the same people further down the line, Boué says.

LinkedIn has made networking its business, and the company extends that approach to its 6,000 workers. Prior to a worker’s last day, the person receives an e-mail stating, “We’re sorry to hear you have decided to leave LinkedIn. We can’t wait to hear about your next play!” It’s followed by a personal invitation from Hoffman to join the alumni network. (He participates in the network himself.) Soon-to-be ex-employees are given a free LinkedIn professional membership; if they are active on the network, the gratis subscription is extended. Alumni are also provided access to a dedicated LinkedIn candidate referral service and invited to special, alumni-only events. Lotteries are held for alumni to attend a speaker series, while company-sponsored beer bashes and cocktail parties keep alumni connected.

McQueen wasn’t sure, at first, how an alumni network would be received. LinkedIn, after all, already provided a great forum through its site for people to form their own employee and alumni groups. And she worried that people would see the company network as Big Brother, usurping employees’ own private connections with each other. Fortunately, people were happy to let LinkedIn build its own alumni network, although informal groups still exist.

It has worked out well on both sides. Departing employees get “the white glove treatment,” where the exit interview has been transformed from a recitation of COBRA and 401(k) details to a warm, “thanks for what you did for us; we’re better off for your having been here.” For their part, former employees have recommended new workers to LinkedIn and have helped out when someone has wanted to trace the history of an ongoing project.

“I’ve only had two people quit, and I remember thinking, ‘OK, don’t take this personally,’ ” McQueen says. “And it was a good choice I made, not to feel betrayed or bitter. They ended up working for me again.” And that’s no surprise—boomerang employees are one hallmark of a successful alumni network.

Susan Milligan is a freelance writer based in Washington, D.C.