More Companies Use Alumni Networks to Rehire, Work with Former Employees

The Yomiuri Shimbun
SMBC Nikko Securities Inc. holds its first face-to-face social event for alumni in Tokyo in December

More and more companies have been introducing alumni systems to strengthen ties with former employees. In doing so, the companies aim to rehire them as skilled workers or create new businesses in collaboration with their current employers.

As job changes become more common, a view of former employees as “partners” has gradually taken root. Some of those rehired have even become presidents or top executives at companies.

Gratitude to former workplace

Junichi Tomomatsu, 30, who quit his job at SMBC Nikko Securities Inc. in 2018 and now works for a consulting firm, attended a social event held by the company in Tokyo in December. All of the 40 or so participants at the event used to work for the company.

“I’m grateful to the company for training me to be what I am now. If there is anything I can do from the outside as a former employee, I’d like to do it,” said Tomomatsu.

In May last year, the company began building a network of former employees, which now has about 300 registered members. The company has maintained the network by providing information and organizing get-togethers.“We will try to rehire former employees and create business opportunities with them [through the network],” said an official of SMBC Nikko Securities.

Sumitomo Corp. started organizing similar social events with former employees in 2019. The company has also set up a dedicated website for its former workers. About 110 people, including current employees, attended a get-together in January this year.

There is a growing understanding that former employees are “our company’s partners,” Sumitomo Corp. says. It is already using its alumni system for rehires and business collaborations.

Fewer job mismatches

As competition for skilled workers intensifies, there are high hopes that former employees with new experience can be of immediate use. And since they are already familiar with the company’s culture and business, there is less chance of a job mismatch.

According to a survey of corporate recruiters conducted last year by Recruit Co., about 12% of client companies had hired employees from an alumni network. The financial industry, which is looking to diversify revenue sources amid low interest rates, is especially active in seeking alumni, with 19% of companies having hired former employees.

Mitsui Sumitomo Insurance Co. hired 10 former employees after introducing an alumni system in 2022.“Now that I know the world outside, I see how good my old workplace is,” said Shoichiro Yokomoto, 39, who was rehired by the company in April last year after working for a consulting firm and a startup. “I wanted to test my skills, which I believe improved while I was away.” He is now mainly in charge of overseas business planning, the same job he had before.

Koji Omori of Hackazouk Inc., a startup in Tokyo that helps companies introduce alumni systems, said: “Rehiring former employees has great advantages, and can lead to change in the company.”

Reducing costs

When recruiting through an agency, companies are usually required to pay about 30% of the annual salary of each new employee to that agency. Alumni networks can cut down on such costs.

However, since employee data is usually deleted when someone leaves the company to protect personal information, it becomes difficult to learn about their current situation.

Tomoki Kaneda, who helps run an alumni system-related business at Recruit Co., said: “To rehire former employees smoothly, you need to prepare by, for example, getting their permission and saving information such as their personnel evaluations and contact information when they leave the company.”