Professional Service Firms Dabble in Alumni Relations

[Tom Spencer]

Actively maintaining alumni relations has long been practiced by universities, and leading firms like McKinsey & Co. McKinsey gives its alumni special treatment, for example, by sharing with them information about attractive job vacancies and giving them free presentations on industry trends.

 

According to a recent Economist article, other professional services firms are now "trying to stay in touch with departed workers, hoping to turn them into brand ambassadors, recruiters and salespeople."

 

The Economist provides examples of the efforts to which professional service firms are now going:

• Deloitte helps departing employees update their CV
• Linklaters provides former staff with discounts to cultural events 
• Citigroup has held more than 150 alumni gatherings since its alumni relations program started in 2011

The surge in alumni relations programs appears to be driven by the relatively low cost of maintaining connections via social media.

 

However, we believe that the prevailing notion that the value of alumni relations should be assessed in terms of "return on investment" is a mistake. Case in point, The Economist notes that Paul Meehan, executive at Bain, describes former staff as “an untapped, hidden asset that isn’t fully exploited”. Meehan is missing the point entirely. 

 

"Profit" and "return on investment" are short term concepts.  They are meaningful over the course of a year, or a small number of years, as a measure of performance.  But forecast even half a decade into the future, and if you are assuming a discount rate of anything more than zero (which is typical), then valuable long term projects can begin to look costly.

 

An investment in alumni relations is an investment in the long term. Organisations that are interested in long term survival, should consider embracing long term concepts.  

 

Religions and Universities, which traditionally have not embraced capitalist tools like the "discount rate", have never had any trouble seeing their members and alumni as assets. Religions don't apply a discount rate to the value of their followers over time, and Universities generally understand that their alumni increase in value over the course of their careers.