The former Managing Director in Citibank’s Corporate and Investment Bank shares his experiences building the company’s EMEA alumni program.Read more
Leveraging Your Corporate Alumni Program To Drive Recruiting
Alumni Programs are making their case for a workable budget, despite the incredible returns they deliver to companies investing in boomerang employees.
The practice of investing in Known Person recruiting - as opposed to Stranger recruiting - is becoming the norm for organizations.
PwC’s CEO survey reports that chief executives view the unavailability of talent and skills as the biggest threat to their business. The data shows it is nearly impossible to glean sufficient information about an applicant’s past performance to predict success in your organization - and more applicants in the funnel is not the solution!
The value of a Corporate Alumni Program and how it can fundamentally drive recruitment, referrals, and new business, is not simply a matter of opinion. Hundreds of companies (98% of the Fortune 500 have some sort of returnship program), thought leaders, and HR experts across the globe have measured and released the results showing the overwhelming benefits engaging former employees can have.
Your organization, just like everyone else's, is investing in technology, people, resources, sponsored listings, recruitment fees, and leaps of faith to try and find a candidate who has no affinity to your brand with the hope that your interview and selection process can foresee their applicability to your business.
A candidate coming in off the web knows very little about the inner workings of your organization. Yet former employees who performed incredibly, and who you flagged as regrettable losses, have gone to work at your competitors, customers, or partners, have gathered new skills, contacts, and perspectives.
The significant investment that companies place into finding a needle in a haystack is not only the standard position for many organizations, but is significantly antiquated, underwhelming in results and a legacy method of Stranger vs. Known Person recruiting.
Here are some numbers for you:50% of all stranger recruits end up being mistakes.
A mistake doesn’t have to mean a total flop: it might mean a moderate performer, someone on a performance improvement plan, someone who left soon after hire, or just didn’t deliver at the level expected.Stranger Recruiting (via Job Boards and Career Sites) is the #6 source of quality candidates.
The #6 source of quality candidates is also likely your primary or secondary source (by volume) of external hires.Investment into recruiters who chase passive candidates on average only fill 11% of their positions.
Of the more than 20,000 talent professionals who responded to a LinkedIn survey, 86% said their recruiting organizations focused “very much so” or “to some extent” on passive candidates.
What percentage of your applicants actually convert into employees? National data suggests only about 2%. Most organizations cannot directly tie their hiring practices to good employees, and even fewer track the cost or time to hire. Instead, the focus seems to be more budget to get more applicants in the funnel and a string of tools promising data science to help you better identify the “fit.” In reality most organizations cannot actually show what methods produce the best hires, and would be better served with fewer applicants in the funnel.
Looking at the data from Alumni programs globally shows:
- 72% of past employees would return to their former company
- 24% of leavers regret their job change (imagine if you knew who and could reach out to them!)
- Alumni & Alumni Referral programs can fill 20% of your external hires annually
- Boomerangs have a 44% higher retention rate over three years
- Alumni rehire is the #1 source of quality hires.
Organizations have a heavy focus and budget to find the Stranger that has a 50% chance of being a low-quality hire. If they do find that person, they only stay on average 4.2 years and can take on average 60-90 days to become productive in the organization.
Based purely on the quality source of hire matrix, the same dollar investment would be 6x more powerful when driven into an Alumni program that actively targets former employees looking to return.
Why start your Alumni program now?
Because your competitors are doing it, and they're just starting. In two years they will have taken their Alumni Engagement budget and turned it from a cost center to a profit center, because while the leading reason organizations develop Alumni programs is recruitment-driven – the research shows that investing in your Alumni drives revenue: increasing not just efficiency, but sales lead generation and the closing capability of the organization.