Addressing the Perils of Lost Knowledge and an Aging Workforce

» Posted by Jeanne Meister  » Posted on 12.03.07

Published February 2005

“Time waits for no one,” goes the old saying, but the march of time is soon going to be a problem for businesses and governments around the world. It’s one thing for individuals to get old—there’s no way around that, in spite of shows like “Extreme Makeover.” But it’s another thing when employees at entire businesses, industries and government agencies decide it’s time to retire. Then you have real problems.

The statistics are alarming. In the United States, more than 25 percent of the working-age population will reach retirement age by 2010, resulting in a potential worker shortage of nearly 10 million people. In the United Kingdom, by 2006, 45- to 59-year-olds will become the largest single group in the workforce.

Knowledge and experience that are vital to your company will be moving on. This spells performance problems that can impede growth. Knowledge retention problems ripple through companies. One major airline, for example, implemented a workforce reduction program in the mid-1990s that led to the loss of many experienced mechanics. Then the airline found that the remaining crews with less experience took longer to troubleshoot and repair aircraft, causing flight delays, cancellations, lower customer satisfaction scores and a dramatic increase in the company’s cost-of-seat per mile.

David DeLong, author of the book “Lost Knowledge: Confronting the Threat of an Aging Workforce,” recently pointed out that there are direct and indirect costs associated with lost knowledge. Direct costs occur through the loss of workers with specific knowledge through retirement and attrition. When these experts are no longer around, it underscores the indirect costs of knowledge loss: poor documentation and storage. DeLong recalled the story of one metal refining company that suffered millions of dollars in losses when a piece of its equipment malfunctioned after maintenance. An identical problem had occurred 15 years earlier, but the company had forgotten the lessons learned from that previous experience.

DeLong believes a holistic approach is necessary to deal with an aging workforce and knowledge retention problems. The approach combines effective knowledge transfer practices, knowledge recovery initiatives, strong knowledge management technologies and finally, more effective HR processes and practices to deal with the problem on a more systemic level.

Here are three things companies should be doing to deal with aging workforce problems:

  • Harvest critical information now and make it available at point-of-need. Companies should begin by identifying where they are most at risk from the loss of knowledge and experience. This involves, in part, establishing performance management and career development processes that identify employees with the most critical knowledge and expertise. For example, to sustain business after the 9/11 attacks, Delta Air Lines was forced to make workforce cuts to remain competitive. This meant that Delta had less than two months to identify which of the 11,000 laid-off employees had jobs for which no backups or replacements had been trained, and then capture that knowledge before it walked out the door. Supervisors worked with a team from Delta’s learning services unit to narrow the list down to those veterans whose departure would represent a critical job loss. Once these outstanding performers were identified, they were interviewed about their roles at the company. This way, Delta retained as much critical knowledge as possible on very short notice.
  • Use real-time collaboration tools to enable workers to interact with colleagues. As collaboration and knowledge management have grown, relevant technologies and tools have become increasingly sophisticated. Things like workspace portals are revolutionizing knowledge management and collaboration solutions by giving workers access to enterprise data and applications, productivity and virtual collaboration tools, and documented knowledge, all of it personalized.
  • Use advanced e-learning techniques. Performance simulation gives employees the opportunity to practice, in real time, the key skills and competencies they must acquire to address knowledge drain.

Employing better workforce planning and targeted knowledge retention initiatives to address the brain drain that now threatens entire industries is an essential component to maintain a competitive advantage.

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