Stars of the ex files

Former employees may find their old firm keeping tabs on them.

So you've found a new job. You hand in your resignation, serve your notice and leave for pastures new, end of story. But should it be? In an increasingly mobile - and expensive - job market, more emphasis should be placed on maintaining links with ex-employees, a growing number of firms believe.

"Once someone announces their resignation, the majority of employers simply shrug their shoulders and accept it. But there are economic factors why they should not do so automatically," says Laurence Rosen, the chairman of Office Angels.

"For some, resignation is a cri de coeur - they might not necessarily want to leave but feel it's their only option because of a particular situation," he explains. At current prices, however, it is a costly decision. In central London, it can cost up to pounds 4,200 in administration, recruitment fees and time spent breaking in new a employee at junior admin level; that can rise to pounds 9,000 if specialist skills are involved.

With personnel and human resource departments drastically reduced since the recession, only a minority of companies now conduct exit interviews as a matter of course. Fewer still make any attempts to stay in contact with former employees.

Yet there are other strong arguments for cultivating contacts with ex- employees. These include the increasingly mobile work-force and the growth in short-term contracts, says Angela Baron of the Institute of Personnel Development.

"While the average time someone stays with one employer remains around seven years, short-term contract working is shifting the balance," she says. "It makes sense for an employer to stay in touch with staff if they are likely to return to work for them again in the future."

They might end up as customers, too. Management consultancies - notably McKinsey & Co and Bain & Co - are only too conscious that today's consultant could be tomorrow's client.

"If you are running a professional services firm, the biggest asset you have is your clients, the second biggest is your staff and the third is your alumni - the old boys and girls," David Murrell, a KPMG partner, says.

Given that consultancies recruit extensively from them, business schools have long used alumni associations as a way of keeping in touch with past students - for marketing and, increasingly, for consulting purposes. Now businesses are adopting practices previously associated with the likes of Paris-based Insead, the London Business School and the rest. KPMG has an alumni programme involving 13,000 former employees in the UK. Every two years, reunion parties are held across the nation - 2,000 people attended the last south east regional event in London in early June.

A twice-yearly magazine is circulated, updating alumni on former colleagues now working in a broad range of other businesses. Former KPMG staff include Martin Broughton, the group chief executive and deputy chairman of BAT Industries, and the Virgin group's managing director, Trevor Abbott. Reunions are also held for people who worked for the firm 10, 15 and 20 years ago, along with seminars and evening workshops on a range of subjects including tax self-assessment and accounting.

"Ninety per cent are extremely loyal to us, which is why it is worth putting in all this effort," Mr Murrell says.

Updating the database's thousands of names and addresses may be time- consuming. But of the top 1,000 companies, 450 have a chief executive, finance director or other senior executive who is ex-KPMG.

"We ignore our former employees at our peril," Mr Murrell adds. "In any industry, you tend to find a number of people will stay in that industry when they move from one employer to another. With an organisation like ours, this is even more important as we span so many different business areas."

But few firms adopt such a structured approach. In the marketing and advertising industries, for example, many executives jump backwards and forwards across the fence.

The London agency Ammirati Puris Lintas recruited Sholto Douglas-Home before he swapped sides to become the head of consumer advertising at one of the UK's biggest advertisers, BT. The flow works in reverse, too. A number of senior advertising agency executives were trained in brand management by big advertisers such as Procter & Gamble, Pepsi and SmithKline Beecham.

But few agencies have any formal structures in place to precipitate this. "In an industry likes ours which is so people-based, it's commonplace although unstructured and informal," one senior executive confides. "We lack both the time and resources to do it in any other way."

Not that the KPMG approach is the only solution. According to Laurence Rosen, foresight and planning can make up for limited time and money. "Enlightened companies do things like write to a former employee three months after their departure - which we do - saying they're still thought of and, should their circumstances change, do call," he says.

By boosting the self-esteem of the individual, a degree of loyalty can be maintained, he stresses. And this delivers economic benefits, toon