Sunday, November 05, 2006

Externship – Vital Tool in Strategic Human Capital Management

In today’s business world – employee attrition has been viewed as a BIG problem. A common reason for star employee to leave is often in search of better job opportunity which is other wise not available in his/her current organization. This forces them to look at opportunities outside the company.

In most small/medium sized firms employees often reach the ceiling in their career growth. Few employees will be content with this status quo – and settle down for a mediocre work; hardly progressing in the organization. Ambitious employees will always seek ways to break this status quo – either by recognizing their weakness & improve their skills or work in areas which complement their strengths. When this fails, they seek gainful employment elsewhere – even outside the current organization – which places a greater value on their abilities.

Attrition is thus becomes dangerous for a small/medium sized firm – as it loses valuable employees and those who remain loyal are mediocre performers. To solve this problem, a few innovative firms are developing a concept of “externship”.

What is Externship?

Externship is similar to internship – but it works in the reverse way. As with internship, a student (usually) is employed for a pre-determined short period. The company gains by maintaining good relationship with the university and has the first choice to employee that candidate. Similarly, an externship is a technique of placing a company employee in another firm – for a short period of time, and enabling that candidate to return (often with a promotion). The employee actually leaves the company (A) – works at another firm (B) and then returns to the original firm (A). And in this process, the employee learns on the new job, gains meaningful experience, and enables him to grow within an organization – which was otherwise not possible. To explain, consider this hypothetical example:

Vijay, a star engineer at a silicon valley based start up company - Nova Systems. He joined the company straight from the college. After three years Vijay has become a senior design engineer and aspires to become a project manager. But all the project managers at Nova Systems have PMP (Project Management Professional) certification and have experience in developing cutting edge technology at other fortune-500 firms. Vijay cannot be directly promoted as he lacks wider industry experience and Nova Systems lacks a formal training system to train Vijay for the PMP certification.

One fine morning, Vijay’s manager Parag drops off a copy of the ‘Appointments’ section – highlighting job opportunity for Vijay at a Fortune-500 firm - ADS. Vijay is uncomfortable with this offer, later he and Parag discuss this offer. Parag encourages him to tryout for opportunities at a Fortune-500 firm – as that company can offers a wider experience and has extensive training program which will help Vijay get PMP certification. Vijay takes up this offer and joins ADS.

Vijay and Parag keep in touch over next few years, and during this time, Vijay grows in his career at ADS, he gains valuable experience working in US & Europe, gets his PMP certification and grows rapidly at ADS. After two years, Parag encourages Vijay to join back Nova Systems as project manager – now that Vijay has the requisite experience and qualifications for that role. Given the friendship between Vijay & Parag – Vijay jumps on this offer and returns back to Nova Systems.

Benefits of Externship

For small & medium sized firms, loss of high performing employees has become inevitable. But such losses also long term impact. Having an externship system enables all the former employees to remain in touch with the company & its managers – and former employees can bring in referrals to their previous employer – thus lowering the cost of recruitment. The company also gains when the employee returns after gaining meaningful experience.

Small firms can also gain by lowering their recruitment costs when they recruit their former employees. The company now has an employee with expanded skills and experience without having to pay for it. Start up firms can also gain from networking with its former employees – who might help the company to discover newer markets, win new clients and get more business.

Closing Thoughts

When a high performing or a valuable employee leaves a start up or small/medium sized firm, company loses, but such a situation can be turned around with an “externship” program. By having a well defined process in place to recruit a former employee, former employees can be encouraged to rejoin the firm. Some managers maintain an informal friendly relationship with their former subordinates – and this network becomes handy for people at difficult times. When the former manager is in trouble, the former employee can help either by rejoining the firm or by using his/her connections to get new business to his/her former employer or by referring an promising candidate and helping out in recruitment.

Though companies have not developed a formal “externship” programs, a few managers and employees are developing an informal externship program. The newer social networking websites help in keeping employees in touch with the managers and colleagues – and people build this informal network which comes handy in the future.

In today’s fast paced world, externship program may become more common. The shortage of talent and lack of training abilities will force a few small/medium sized firms to tryout innovative HR practice called “Externship”.

Also See:

Retaining People in Technical Jobs
Retention of top managers
Use Marketing to Hire and Retain Talent
Accenture Experiments with Rural Outsourcing
Employee Churn is here to stay
Soft Skills For Global Managers
The Value of Talent
Giving Your Top Performers a Reason to Stay


Munaz Anjum said...

The scope of externship is very limited. Employees hardly return back to their previous organizations once they leave. What’s the probability that an employee after developing a requisite skill will return back to their previous organization. I don’t even thing that (p) = 0.5 in this case.

Further if an organization is big hand has a global brand name, he/she never turns back to his/her previous small organization. What do you think of this?

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Project Management Certification

Ella Mapple said...

PMI’s Project Management Professional (PMP) ® credential is the most important industry-recognized certification for project managers. Recently I went for a PMP prep course by the training provider mentioned above, the instructor was too good and I passed with relative ease. Looking forwards to apply what I learned in PMP class in my company.