Godfrey Parkin hits on the topic of knowledge retention in Knowledge managing the retirement brain drain
In most Western countries, the baby boomer bubble is causing concern for those planning pension and social security services. It should also be worrying employers. A quarter of current American employees will be retiring within the next five years. If the outgoing masses know anything of value and it is not being passed down to others in their companies, those organisations face a brain drain that could harm their ability to operate.
Godfrey bases his discussion on a Accenture survey (May 2005) on retirement expectations and the potential for "brain drain." As with all these surveys and conversations, there is plenty of warning that people are retiring. As my students noted this spring, there have not been quantitative demonstrations of the impact of these retirements. Yes, it will be bad if the XYZ expert retires (or otherwise vanishes from the company), but isn't this what organizations have been managing ever since organizations have been around? Maybe the problem is more in the quantity of retirements and that it is becoming difficult to hire intelligent / skilled replacements (hiring freezes, skills not taught anymore). But then we should expect the market for people with those missing skills to react appropriately.
A friend at a local technology firm said there are 30 senior people retiring in the space of a month this summer. Many are taking advantage of the early retirement package the firm has offered in attempts to trim the workforce. And they are not retiring, they are going to other firms or going into consulting to ply their trade in the wider world. In these cases, not only is the firm losing these skilled people, but they are also losing those skilled people to potential competitors. The firm is clearly more interested in its near-term bottom line than in the benefit these retirees could add to the top line before they hit a more natural retirement age.
This suggest to me that firms are doing the math and have decided that losing the skills and knowledge isn't as critical as the Accenture survey suggests. Or maybe they haven't done the math at all, yet no one else has been able to quantify the financial benefit of having those skills.
Bonus! Having just discovered David W. DeLong and his book on Lost Knowledge: Confronting the Threat of an Aging Workforce, I checked his website further. He's got a number of articles in the toolbox that give a little more meat to the discussion of knowledge retention. Specifically, the 2002 Uncovering the Hidden Costs of 'Lost Knowledge' in Global Chemical Companies (pdf), lists several directions on which this could be quantified:
- Reduced capacity to innovate: fewer "prepared minds" to connect the dots and create something new.
- Ability to pursue growth strategies threatened: expanding your current business requires people that understand your business and your technologies.
- More costly errors: fewer people around who have already made the mistake you are about to make.
- Less efficiency: loss of the knowledge of how to get things done within the organization.
On the other side of this equation there is Piers Young's suggestion that it's important to forget things too. Having entrenched people who know "how it has always been done" can sometimes get in the way of these same drivers that DeLong lists as dangers. A classic problem of balance, methinks.