In early 2004, Joel J. Cohen and Herald L. "Hal" Ritch set out to build a new investment bank.
The pair, both former top executives of Donaldson, Lufkin & Jenrette, turned to their address books. By the time that they launched Sagent Advisors Inc. a few months later, Cohen and Ritch had signed on 25 of their former coworkers.
That's the power of a corporate alumni network.
Sagent has steadily grown to at least 90 workers and is one of a few finance shops in the country that's hiring. Don't you wish you knew those guys then?
The Corporate Alumni Advantage
In a tight job market, networking can make all of the difference. Connections with former coworkers, in either a formal or informal forum, should not be underestimated. They are as transferable as a 401k, and may even hold their value better.
The most proactive companies have full-time staff and separate proprietary Web sites dedicated to alumni networks. Most offer a directory with contact information of current and former employees, a schedule of social events and company news and a job board where open positions are often posted first.
Some of the sites even let recruiters and headhunters register to connect with alumni.
Bain & Co., a Boston-based consultancy, has a particularly robust alumni network as old as the firm -- 26 years. It has grown to about 6,500. In addition to the typical features like a directory, Bain's network gives members access to the company's proprietary research and training programs, including Webinars. Bain has staff in its corporate headquarters dedicated to cultivating the project and has one or two employees in each of its 40 offices that work on the network as well.
Its managers even seek out job opportunities outside of Bain for current and former employees.
"It's a very strong culture and we do everything we can to help our alumni be successful wherever they decide to go," said Wendy Miller, a partner that oversees the network, along with other duties. "You want to stay connected to these folks, because they tend to be real movers and shakers."
The Bain alumni job-board has been three times more active than usual since the economic storm-front arrived in the fall, with both more listings and more queries from workers on the hunt for a new position.
Using the proprietary research that some alumni networks provide can give job seekers a significant leg up in the market.
The Revolving Door
The desire to connect with former co-workers is abundantly evident at JPMorgan. The firm launched its alumni network slightly more than a year ago. Despite a lack of marketing, the group already has 9,000 members, according to Catherine Coluzzi, executive director of global alumni relations at the big bank.
While alumni get access to job postings and proprietary research, companies also find value in networks. The groups strengthen the corporate brand, help catalyze deals with former workers and help bring talent back into the fold, according to Coluzzi.
"Rehires tend to be higher performers; they stay longer and they ramp up faster," she explained.
Coluzzi is speaking from experience. A former investment banker, she was rehired by JPMorgan in June 2007 after a five-year hiatus. She is currently working to slice the network into a series of Facebook-style "groups," where employees can separate themselves based on their former role at the firm and their current interests.
The Job Hotline
Job seekers should look beyond official corporate alumni networks. The number of corporate-sponsored networks is dwarfed by a rash of less formal alumni groups on the site and other social-networking forums like Yahoo and LinkedIn.
A search on Facebook for "Bear Stearns" for instance, turns up about 500 results, from "Bear Stearns Employees" (485 members) to "Bear Stearns Summer Interns 2008" (38 members).
Stephen Chen originally created "Bear Stearns Employees" as a way to facilitate work-flow while the bank was a going concern. When Bear went bust, the group became a forum to commiserate. These days, it functions as a sort of job hotline.
"People go to recruiters looking for jobs and a lot of times the jobs don't fit them, so they'll forward the positions that don't work to Facebook," Chen said.
When we talked to Chen in the early-afternoon, he had already received four e-mails from members looking to post jobs that day. Chen said Facebook, and the "tagging," "messaging" and other interactive features that it offers, are more useful than a typical alumni network.
"A lot of corporate networks are basically just one big html sheet where you enter your name," he said. "It's not a living way for people to communicate."
Chen's group even provided a platform for a former employee looking to sue Bear Stearns.
"Once you get a group of people put together, they do whatever they want," he said.
Companies Want to Be Where You Are
Dev Khare, a venture capitalist at Venrock, set up a Facebook group for his DLJ coworkers years after the firm was acquired and years after he left investment banking altogether. Listed as "chief janitor" for the 338-person group, Khare said he was primarily trying to keep his former coworkers in touch, as opposed to advancing his career.
Khare, who is also members of Facebook alumni groups for Harvard Business School and the University of Pennsylvania's Wharton school, said more networking and resource-sharing is done on LinkedIn than on other social sites.
"From a corporate alumni point of view that is a much more trusted and powerful brand for professionals," he said. "On Facebook, it's more of a social expression, like 'yes I was at this firm' or 'yes, I like this author,' as opposed to usage of the group."
Bain, in addition to its massive in-house platform, has cultivated groups at almost every social-networking forum available.
"We want to be where our alumni are and that's where they are," Miller said. "There are companies that don't have that philosophy, but they're awful short-sighted."
Job candidates that are already engaging with their corporate alumni networks might want to try the following:
-- Join niche-specific subgroups in each network.
-- Recruiters will partner with specific alumni networks. Connecting with them through the network can be a great way to make an introduction.
-- Attend alumni social events. Networking never hurts -- even for the currently employed.
In any economy, job seekers should use all the safety nets they can get -- and personal networks are among the best. Keeping in touch with these valuable networks means that wherever you go in the world of finance, you'll never be alone.
-- Kyle Stock
Email Kyle about this article here. Please make sure to include the title of the article in the email subject line.
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