Boomerang Employees More Companies Tap Into Alumni Networks to Re-Recruit Best of Former Workers

Boomerang Employees: More Companies Tap Into Alumni Networks to Re-Recruit Best of Former Workers - Wall Street Journal, 10/24/11

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By MELISSA KORN

Corporate alumni networks can make it easier for former employees to become future employees.

Though formal alumni networks have existed for years—consulting firm McKinsey & Co. has coordinated activities for its ex-employees since the 1960s, for example—they have made a resurgence as professional-services and technology companies, among others, struggle to find skilled workers to fill their ranks.

Former employees also are cheaper to hire because firms can avoid external recruiters and a prolonged slog through résumés.

Though companies that provide professional and business services, such as consulting, hired the most employees of any industry in August—839,000—it still had the highest number of openings—623,000—at the end of that month, according to the Bureau of Labor Statistics.

The earliest corporate alumni networks were mostly social in nature, rarely an integral part of corporate strategy, says Anne Berkowitch, chief executive of SelectMinds Inc., a company that hosts such network websites. Now, she says, these alumni initiatives provide a channel for recruiting, client development and branding.

The latest online networks, often password-protected, can include message boards, blogs from executives, profiles of prominent alumni and both internal and external job postings. Companies usually also set up face-to-face activities, which can double as recruiting opportunities.

Credit Suisse Group AG launched the Credit Suisse Alumni Network last October in the Americas, and has since expanded into Asia, Europe, the Middle East and Africa, formalizing its more casual Facebook and LinkedIn groups.

The system allows it to recruit former employees or get referrals for other talent, as former staffers can view job openings on the site and share links with contacts via LinkedIn, Facebook, Twitter and email.

Neal Wendel, a managing director, says he has "definitely seen rehires directly attributed to the site." He points out that former employees are attractive because they are more productive than completely new hires and easier to re-integrate into the firm. "We know them, and they know us," he says.

Credit Suisse says the network also helps it spot new business opportunities as ex-employees move to client firms, giving the bank an "in" when pitching projects.

Such sites let a firm focus on ex-employees with the most potential, rather than spread itself thin among former staffers with little promise, says Christopher Collins, an associate professor of human-resource management at Cornell University's School of Industrial and Labor Relations.

Even the most rigorous interview process and entrance exams can only provide "a very small snapshot of how a person performs in the organization," says Mr. Collins, while actual experience at the company can speak volumes.

Former employees also are cheaper to hire because firms can avoid external recruiters and a prolonged slog through résumés of unqualified applicants. And so-called boomerang employees tend to have better retention rates upon return as they have seen other less-attractive options.

Tony Audino, chief executive of workplace-networking company Conenza Inc., says that talent acquisition is the main driver to start alumni networks for about 80% of his clients, which include Accenture PLC and Roche Holding AG's Genentech. When it's not the primary reason, he says, it's at least among the top three.

Strategy and technology consulting firm Booz Allen Hamilton, which has had a formal alumni group for years, is in the process of "refreshing" it to build better relationships with former employees and identify possible return talent, says Christopher Carlson, a senior associate who helps oversee the network of more than 38,000. The company currently hosts in-person hiring events, for which it will contact alums in a given functional or geographic area, and has an online jobs site. Over the next three to six months, it will roll out more features including social networking, local reunions and webcasts.

Mr. Carlson says Booz Allen Hamilton is making the changes now as it prepares to re-enter some commercial and international markets, to ensure that alumni are aware of possible job openings or business-development opportunities.

Even without a job-search function on its alumni site, Corporate Executive Board, a business research and advisory firm, has doubled its re-hire rate to about 10% since starting to roll out the CEB Alumni Network about two years ago. The company plans to add that feature next year.

For now, the 500-person alumni group has online member updates and in-person networking events with former and current staffers. And while the network has LinkedIn and Facebook pages, the private site also allows the company to collect more employee data in a secure setting.

Melody Jones, chief human resources officer, likens Corporate Executive Board to Hotel California: "You can check out but you can never leave," she jokes.

Write to Melissa Korn at melissa.korn@dowjones.com