One of the most significant challenges business leaders face is the transfer of knowledge from one generation of workers to the next. With 10,000 Baby Boomers retiring every day, there is extensive institutional value walking out the door. At Solutions 21, we have clients who are facing the loss of a combined 100+ years of knowledge when their tenured employees retire.
In the past, time has been on the side of employers. Climbing the corporate ladder was a given and allowed younger workers to watch, learn, and grow within the organization. Fast forward to today and this new-hire timeline ceases to exist. Less-experienced workers are stepping into management roles faster than ever before and need institutional knowledge and wisdom from their tenured colleagues in order to succeed.
Side note: Our Director of Strategy and Leadership Development, Rob Salome, developed this idea in greater detail in his latest blog. It’s worth the read.
In such a rapid and fast-paced business environment, capturing knowledge and effectively transferring it to future leaders is crucial for long-term success. Organizations that develop a plan to effectively pass on key knowledge are the ones who will have a competitive advantage.
The harsh reality: the majority of organizations don’t have a plan for transferring knowledge.
From SHRM’s “Shedding Light on Knowledge Management”
It’s estimated that poor knowledge-sharing practices cost Fortune 500 companies $31.5 billion annually.
From Express Employment “Boomers Staying in—and Returning to—the Workforce”
The majority of working boomers (57 percent) say they have shared half or less of the knowledge needed to perform their job responsibilities with those who will assume those responsibilities after they retire.
- 18 percent have shared all knowledge.
- 25 percent have shared more than half.
- 21 percent have shared about half.
- 16 percent have shared less than half.
- 21 percent have shared no knowledge.
From the book “Critical Knowledge Transfer”
53 percent of C-suite respondents said the knowledge-related costs of losing key employees falls somewhere between $50K-$299K per employee. Another 11 percent estimated it was more than $1 million. Others couldn’t provide a figure, saying that the cost was “incalculable” or “priceless.”
74 percent of organizations estimate that effective knowledge management disciplines increase company productivity by 10-40 percent.
Developing a strategy for knowledge transfer is crucial to ensuring that you are capturing the knowledge of your retiring team members before they head out the door. It is paramount. And your employees know it. So much so Boomers have reported that they are wanting to share knowledge with those who will fill in their positions, however, face impenetrable roadblocks because their organization does not have a formalized process in place.
Knowledge transfer must be a development priority for your team. After all, when you combine top-tier talent with institutional knowledge you will be maximizing the potential of your future leaders. Further, by fostering a culture of open dialogue, this will only help to enhance the relationship among employees in the organization, which will positively impact your company culture. It’s a win, win, win all the way around.