Brain Drain: The Impact of High Turnover on Institutional Knowledge
In spite of the economic clouds that have shadowed the first few months of 2023, the quit rate is holding steady. According to the February JOLTs report out earlier this month, 4 million people quit their jobs in February, down from the high of September 2022, when 4.4 million people quit.
The 'Great Resignation,' the period between 2021-2022 when roughly 100 million US employees quit their jobs, has been examined from the recruitment angle and the employee experience angle, but what is less clear is the impact it had (and continues to have) on institutional knowledge. At a time when the average millennial tenure in a role is 2.9 years and Gen Z spend 2.3 years on average, the question of what happens to knowledge at a time of high turnover is more relevant than ever.
Building a Connected Workplace
Nathan Pieri, chief product officer and VP at Milwaukee-based Rockwell Automation, noted the affects of high worker turnover and changing preferences on the workplace and highlighted a few emerging trends.
These trends can be found in nearly every industry but are especially problematic for industrial enterprises that operate in critical manufacturing and infrastructure, such as energy providers, food and beverage producers, and manufacturers of high-tech microchips and semiconductors.
One is driven by aging populations. He noted the high number of older people retiring from the workforce are taking a great deal of industry knowledge and experience with them.
The second trend concerns the new generation of workers. These workers are digitally predisposed and want to use technology to achieve workplace goals.
“While knowledge loss is certainly a problem with the generational retirement enterprises face today, there is also the silver lining of increased technology adoption with the new generation,” he said.
The result, he said, is that successfully enabling the concept of the ‘Connected Worker’ becomes critical to business success. Digital tools and smart manufacturing solutions offer the ability to develop libraries of work instructions, standard operating procedures, how-to guides, and other resources that will store vital information and connect that information to future workforces.
"For the 'Connected Worker' strategy to truly be effective, these resources need to be stored in a single source of truth, which necessitates digital transformation and integration between business systems,” he said. “These sources of truth can also collect information around historic facility production and procurement operations for future analysis, ensuring that past knowledge isn't lost in the shuffle of workforce turnover."
Related Article: One Business Outcome of the Pandemic: Organizational Knowledge Loss
Sharing Knowledge via Mentorship
WorkReduce CEO Brian Dolan agreed. He said that we should be doing all we can to encourage mentorship and knowledge sharing across generations before we lose the valuable knowledge and skillsets of those leaving.
He also adds that saving, or preserving knowledge, is not enough. Newer workers need to be able to use the existing knowledge.
The best way to do this, he says, is the mentorship older workforce can provide to junior team members, especially those who want to advance in client facing roles. “The art and science of client communications is best learned from our older industry veterans,” he said. "That said, wanting to quit and having the guts to quit are very different. More people are employed in gross numbers than ever, and the labor force participation rate is climbing back up from a pandemic low."
However, organizations can adopt a number of other strategies to support the inevitable turnover in their future, said Chinmay Daflapurkar, digital marketing associate at Nagpur, India-based Arista Systems Pvt. Ltd. His suggestions include:
1. Professional Development and Growth
One of the main reasons why employees leave their jobs is because they feel stagnant and unchallenged. Daflapurkar believes that providing regular opportunities for learning and development can help employees feel engaged and valued, and therefore less likely to leave, while also increasing their skills and knowledge that can be applied to benefit the organization.
2. Document and share knowledge
To prevent the loss of valuable knowledge, it is important to document and share knowledge within the organization. This can involve creating a knowledge repository, providing training and resources to help employees capture and share their expertise, and encouraging cross-training and job shadowing to help spread knowledge throughout the organization.
Data-Driven Insights Pinpoints Skills Gaps
In the wake of the Great Resignation, organizations must think about adapting their hiring, onboarding and training processes to support the future workforce, which has to be "augmented and flexible," said Chris Kuntz, VP of strategic operations at Horsham, Pa.-based Augmentir. While there are many things organizations can do on a human level, technology solutions can also help.
“[Retaining knowledge] means adopting new software tools to support a more efficient ‘hire to retire’ process to enable companies to operate in a more flexible and resilient manner," he said.
It also means understanding your workforce at an individual level and using data to intelligently closes skills gaps at the moment of need and enables autonomous work. Here, workplace leaders can use data to gain insights into training, career guidance and support staff needs. In practical terms, he added, this mean investing in AI-powered connected worker technology to boost workplace operational efficiency.
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"As workers become more connected, employers have access to a new rich source of activity and execution data, and with proper AI tools can gain insights into areas where the largest improvement opportunities exist,” he said.
Artificial intelligence, he added, lays a data-driven foundation for continuous improvement in the areas of performance support, training and workforce development, setting the stage to address the needs of today’s constantly changing workforce.
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The Role of Off-Boarding
Caroline Reidy is managing director of the Dublin, Ireland-based human resources consultancy, HR Suite. She believes that the key method of protecting company knowledge is putting exiting staff through an extensive off-boarding process. A successful off-boarding process ensures that the person leaves the organization without failing to transfer knowledge, skills and insights about their position.
That way best practices, established processes and other crucial information will be accessible to whoever assumes the role if a robust knowledge transfer plan is in place, she continued.
Getting the employee to write down their key duties and selecting an employee that could best handle the task in the interim, then setting aside a day to transfer the knowledge for each task is key to having no knowledge loss.
“Before it gets to the point of employees handing in their notice, having a regular review process in place that keeps managers informed of employee's day to day duties and process for how their work is completed will ensure successful knowledge retention,” she said.
Related Article: Why Employers Should Focus More on Off-boarding
An Opportunity to Reassess Workplace Culture
While the impact of this loss of expertise and the time and resources required to hire and train new employees can lead to a decline in productivity and efficiency, there is one major positive consequence, said Chelsea Ashbrook, senior manager, corporate digital experience at San Francisco-based Genentech and founder of The Flexible Worker.
She said the 'Great Resignation' pushed organizations to reassess their workplace culture and practices, prompting a transition towards more flexible and inclusive environments. The shift has both short- and long-term consequences. In the short-term, companies may experience a temporary drop in productivity as they implement new policies and systems.
However, in the long run, these changes have the potential to create more satisfied, engaged and loyal employees, ultimately boosting productivity.
She also said the 'Great Resignation' has forced organizations to recognize the importance of work-life balance, mental health and overall employee well-being. As a result, companies are increasingly investing in resources and programs that support employees' needs as well as nurture their personal and professional development.
“In the digital workplace, this trend translates into a greater focus on collaboration and communication tools and training programs aimed at upskilling employees in areas like remote work, time management and digital literacy," she said. “The potential for increased productivity and innovation grows as workers become more adept at navigating the digital landscape."
About the Author
David is a European-based journalist of 35 years who has spent the last 15 following the development of workplace technologies, from the early days of document management, enterprise content management and content services. Now, with the development of new remote and hybrid work models, he covers the evolution of technologies that enable collaboration, communications and work and has recently spent a great deal of time exploring the far reaches of AI, generative AI and General AI.