Monday, June 13, 2005

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. While much of the work done in examining this issue is carried out by those seeking to market a solution of some kind, the workplace realities, on which they all seem to agree, are fascinating. It appears that finance departments have little regard for the enduring value of an employee’s lifetime of work.

Accenture recently surveyed several hundred employees who qualified as “approaching retirement” to find out what, if anything, their employers were going to do about retaining their knowledge before they left. (I personally found the sample demographics a little alarming: since when are people between the ages of 40 and 50 approaching retirement, unless of course they are in US government jobs?)

It seems that companies are doing very little to capture that knowledge. Could it be that companies simply don’t value what their “ageing” employees contribute? There’s plenty of anecdotal evidence to support that view. If faced with recruiting or promoting either an inexperienced 25-year-old MBA or a 50-year-old veteran, the MBA is always the odds-on favourite – even in a country where overt ageism is illegal.

What opportunities are offered to imminently retiring employees to pass on their wisdom? According to Accenture, one company in four makes no effort whatsoever to capture the workplace knowledge of retirees, and a further 16% of companies expect retirees to have an informal chat with colleagues before leaving. That’s more than 40% of companies that have no formal processes for retaining expertise.

When you think of the money and time that has been put into training and developing the expertise that is apparently seen as disposable, you have to wonder how serious companies are about the value they place on “human capital”. After all, what is human capital if not expertise? If it is disposable, it has no significant value. And if the expertise of your most experienced people has no significant value, why on earth are you wasting your time bandying about training ROI calculations? At the end of the day, the return on all that investment, in Kirkpatrick Level Four terms, is assumed to be not worth the trouble of securing. Or so your accountants will tell you.

Now, you can look at the other side of the coin and say that more than half of all companies do make an effort to hang onto that expertise. In fact 20% of companies claim to put their retirees through a knowledge transfer process that lasts several months. But I suspect that this is only in exceptional cases for particularly high-ranking employees.

It may be that the failure to make an effort to preserve workplace knowledge is not because such knowledge is undervalued but because the extent of the problem is not realised. In that case, how do we get senior management to sit up and take notice? And, once they do appreciate the scale of the impending problem, what can be done to move awareness to effective action? Perhaps this responsibility falls more squarely on the shoulders of HR management and human capital strategists, rather than on trainers. Or perhaps it is the responsibility of those charged with knowledge management.

Knowledge management (KM) has had a bit of a rough ride over the past 10 years, having made many of the same mistakes that e-learning made. Their focus was initially on building technology-based tools to extract, retain, and retrieve what was in the heads of employees, and their focus was on explicit knowledge rather than tacit knowledge. Nowadays tacit knowledge is recognised as being more relevant to performance, even if it is harder to capture. KM people are working more with informal approaches such as story-telling to capturing what this less tangibly expressed expertise.

The problem is that the less formal our processes become – in both training and knowledge capture – the less easy they are to sell to the corporate bean-counters. And the less tangible our activities are to those who like dealing with hard numbers, the less value they are assumed to have.

I sometimes think that accountants are the biggest obstacles to progress in corporate learning and knowledge management. They love structure and hierarchy and abhor ambiguity and fuzziness. If they can’t measure it, it has no value. How 20th century! We have all run more than our share of the mandatory “Finance for non-financial managers” courses. Perhaps it is time to lobby for some mandatory “knowledge for non-knowledge managers” courses…

1 comment:

Bill Bruck said...

Godfrey -

It's interesting that partially in response to the recognition of this trend, the federal government has been promoting communities of practice.

Jury's still out on how well this will work out, though.

-bb

Bill Bruck (Q2Learning)
bbruck@q2learning.com
Collaborative Learning Blog http:q2learning.blogs.com
Join our CoP at http://cop.collabhost.com