Corporate alumni networks have been our focus from day one, starting more than 10 years ago. In fact, we live and breathe corporate alumni programs so that we can share our knowledge with you.
The Modern Workplace: Converting Former Employees to Employees for Life – Part 1: Why now?
This post is the first
in a three-part series that explains the motivation for converting former
employees to employees for life and the incredible value realized.
When employees leave, the conventional practice is to say
goodbye and move on. But dynamic market conditions create the impetus for of
staying connected to former employees. For example, leading organizations such
as Duke Energy and Bridgewater Associates are fostering
brand ambassadors, lowering recruitment costs and uncovering new business
opportunities through their robust Alumni Programs.
At Conenza, we refer to this initiative as engaging
employees for life™. Although corporate alumni
programs have been around for decades, mostly among professional services firms,
there is a shift underway in every major sector to recognize the value of
employees after they leave. Today,
leading companies are taking steps to engage employees for life. Why
is this happening now?
Four market forces combine
to blow-up traditional employment models
Four macro trends create the perfect conditions for this paradigm
shift: the acceleration in the retirement of boomers, the decreasing tenure of
younger generations in the workforce, the automation revolution, and the impact
of employer review sites.
1. Boomers are tapping out
Approximately 10,000 boomers retire every single day. The
trend is expected to continue into the 2030s. The impact of this brain drain on
the labor force is dramatic within individual companies and across market sectors.
See the chart below for proof of the decline of boomers in recent years.
2. Younger workers are on the move
Millennials have risen to the top of the labor force in the
last few years, bringing with them different attitudes about loyalty to
employers and work/life balance (see the chart below). According to the Bureau
of Labor Statistics, the average job tenure for millennials is only 2.8 years. The
Deloitte Millennial Survey 2018 warns that “Loyalty must be earned, and
the vast majority of millennials are prepared to move, and move quickly, for a
better workplace experience.” Post-millennials are likely to continue this
The workforce in most organizations is hit at both ends of
the spectrum, old and young. And the impact of these long-term forces is
compounded by an extremely tight labor market with the unemployment rate below four
percent. However, there is a silver lining. Some boomers continue to work past
retirement age in either a full-time or part-time capacity. In fact, retiree
rehire programs are gaining traction. And in a similar vein, almost 50 percent of
the younger generation say they are willing to return to their former employers
for another tour of duty. But the only way boomers, millennials or any
professionals want to return to their former employers is if those companies
have maintained connections and engaged with them over the long term.
3. The automation revolution is transforming industries
The automation revolution will undoubtedly have a tremendous
impact on not only the global workforce, but every aspect of our world as we
know it. The McKinsey Global Institute’s recent study, Jobs
Lost, Jobs Gained: Workforce Transitions in a Time of Automation, estimates
that artificial intelligence (AI) and robots could automate as much as 30
percent of jobs by 2030. At the same time as this massive displacement, new
jobs are being created that require new skills. As business leaders everywhere
begin planning for these tectonic shifts in the world of work, some recognize
that reskilling their current and former employees is the most cost-effective
means of preparing for the future. Last year AT&T
initiated a $1 billion retraining effort after its research indicated that only
about half of their 250,000 employees had the skills needed for the business
While helping current and former employees upskill is
arguably the right thing to do, there are compelling economics behind it as
well. The median cost to hire for a new position is 21 percent of compensation
and goes up as base salary increases. New hires take five to nine months to
reach full productivity; whereas, existing or former employees are 40 percent faster
at getting up-to-speed and more likely to stay longer. Lastly, retraining
workers enables companies to retain access to valuable intellectual capital.
4. Employer review sites impact employer brand and hiring talent
The final element leading organizations to engage their
employees for life is the increasing role that employer review sites, such as
Glassdoor, and social media in general, play in shaping an employer brand. According
to a 2016
Glassdoor survey, 70 percent of people now look to employer reviews before
they make a career decision and the majority read six reviews before forming an
opinion. What’s more surprising is that former employees write 40 percent of
these reviews. So, two or three out of the six reviews read by job candidates
on Glassdoor have been written by the company’s alumni. Who do you think will
be a better brand ambassador on Glassdoor, the former employee that you haven’t
spoken to since the day she/he left or the one that you have engaged with
through an active Alumni Program?
Real benefits from
In summary, retirement, shorter tenures and automation will
result in the acceleration of the number of employee transitions across all company
sizes, organizational types and industry sectors. Social media has given all employees –
current and former – an amplified and influential voice in the talent
marketplace as they share “what it’s really like to work there.” These dynamics
have caused many organizations, especially the market leaders, to rethink their
approach to employees as they exit. By
engaging employees for life through a robust Alumni Program, organizations
provide a valuable community and resource for former employees and receive an
incredible return in the form of brand ambassadors, boomerangs, and business
Next up in the series:
Our next post elaborates on what a robust Alumni Program looks like. Finally,
we cover the quantitative research performed by Cornell’s ILR School that
shines a light on what motivates alumni to join and how to design a program
that addresses these motivations.