50%+ of retiring workers are in leadership positions: hereโs how to retain their institutional knowledge
Baby Boomers have been the mainstay of the American economy for decades. With 56% of them in leadership positions and a tendency to change jobs less frequently than their younger counterparts, they possess extensive institutional knowledge of the companies they work for.
This experience is critical for training and sharing knowledge and skills with new employees, and provides stability and consistency to organizations and their customers. And further, todayโs workers in their 60s and older tend to be healthier and work longer than similarly-aged counterparts from earlier times.
There are many tangible and intangible benefits for organizations to retain highly skilled workers with significant experience and subject matter expertise. Nonetheless, with 4 million leaving the workforce every year โ a rate of 10,000 eligible to retire per day โ the challenge of losing decades of institutional knowledge is sizeable.
The risks of losing institutional knowledge from retiring leaders and contributors
But before we dive into the broad topic, it helps to clarify what, exactly, is institutional knowledge. Frequently, people conflate institutional knowledge with explicit knowledge, such as company policies, processes, and values, or an individualโs โhardโ skills. However, institutional knowledge is much more than explicit knowledge.
A huge part โ at least 80% โ is tacit; the information that is held in peopleโs heads, and not captured in any formal system. This unique mix of personal beliefs, values, and experiences, and the knowledge of what makes teams and people tick, can represent a highly valuable, but difficult to quantify, competitive advantage, particularly in tenured, successful leaders. Losing institutional knowledge from these leaders (and employees) comes with a range of costs. This includes the time and money spent on finding and hiring a strong replacement, lower productivity in the time it takes for them to get up to speed in their new role, and frequently, time to recreate established internal processes.
Further, in situations where organizations have stood the test of time, and leaders within that organization have helped steer it through crises as well as good times over years or even decades, the institutional knowledge of these leaders is also deeply connected to the culture of the organization itself. This is something that is hard to put a dollar value on but, as the saying goes, culture eats strategy for breakfast.
“While the global population is growing older on average, we have not yet moved past our assumptions that long-tenured workers have less to offer, and that an aging population is a negative for society. The reality is very different. This generation of โeldersโ in the developed world will be the longest lived and most highly educated elder population in human history, which begs the question, โWhat will be the impact on society of this elder abundance?โ The reality is much more optimistic than the assumption. Todayโs 60-something workers are carriers of wisdom caring more about meaningful contributions and less about ego, motivated, knowledgeable, and adept at intergenerational collaboration.”
Chip Conley
Author, Wisdom@Work,
Modern Elder Academy (MEA) Founder,
and former Head of Global Hospitality and Strategy for Airbnb
What you can do to retain and share tenured workersโ institutional knowledge
While the risks are clear and ongoing, most organizations today are not tackling this in a proactive way. As gerontology scholar Paul Irving wrote in Harvard Business Review, โAging is affecting every aspect of business operations โ but the message just hasnโt gotten through. In general, corporate leaders have yet to invest the time and resources necessary to fully grasp the unprecedented ways that aging will change the rules of the game.โ
However, the good news is that there is a range of ways to minimize the risk of the brain drain of retiring leaders and workers. For example, companies can invest in opportunities for mentorship, part-time or flexible schedules, and programs that unlock their knowledge and experience. Further, they can invest in succession planning, including identifying critical roles, developing talent pools, and succession planning reviews, to stay ahead of any potential talent shortages.
Initiatives such as these reduce costs of hiring, as well as help keep institutional knowledge in-house, enabling new hires to benefit from the explicit and tacit knowledge that tenured leaders and workers have accrued over years.
While these initiatives can help mitigate risks, having a digital program in place to capture and share knowledge from tenured leaders and workers can bring more structure and measurable benefits to the organization. To achieve this, organizations should implement a program that:
Is built into offboarding and onboarding workflows as tenured workers change roles, reduce hours, and retire, over the long term.
Is able to capture explicit knowledge AND tacit knowledge, as capturing only explicit knowledge means losing a lot of valuable contextual and cultural knowledge that makes the organization unique.
Ensures that knowledge is accessible and findable when itโs needed โ not always an easy thing to do with large volumes of information.
How Sugarwork can help
Organizations that do have structure around capturing and sharing knowledge often use tools such as intranets, Google Docs, or Sharepoint. But these tools are not built to capture institutional knowledge in a structured way, and just as importantly, do not make it easy to find information when it is needed.
This is where Sugarwork comes in. A solution purpose-built to retain and share institutional knowledge โ both explicit and tacit โ at scale, Sugarwork provides a structured, easy to implement process to capture, aggregate, and enable access to knowledge on an as-needed basis, whether employees are new, changing roles, or trying to understand the nuances of new responsibilities in their existing roles.
Hereโs how it works:
1. Tenured leaders and employees transfer targeted knowledge on video using conversation templates.
Through the platform, tenured leaders and employees are paired with learners based on roles and functional expertise. Expert-developed questions are deployed for each pair or grouping, spanning topics of key relevance to your organization. These knowledge sharing conversations are conducted on video (e.g., Microsoft Teams, Zoom, Google Meet) and are captured and summarized by the platform.
2. HR or managers track progress through an admin dashboard.
HR admins and managers are able to effectively monitor and track the progress of knowledge capture and sharing down to individuals, and quickly assess if key topics are covered and/or pairs or groups should be switched up.
3. Existing employees access knowledge as needed, with conversational AI.
New and/or existing employees โ not only those involved in the knowledge share โ can interact on an as-needed basis with captured knowledge in two key ways: via documents of insights and summaries generated by Sugarworkโs LLM, and a conversational interface that enables employees to quickly find relevant information.
Protect company culture, and unlock tens of millions in productivity
The average large US business loses $47 million in productivity each year as a direct result of inefficient knowledge sharing. For many successful, established businesses that have stood the test of time, this risk is exacerbated by a steady flow of experienced leaders leaving their organizations. And with baby boomers now aged 60-78 this steady, risky, drain will continue for at least a decade, with Gen X not far behind.
Having a systematic approach to capturing and sharing institutional knowledge will deliver consistent value over the long term. Itโs good for business, as it reduces the risks of overspending on hiring, reinventing internal processes, and losing knowledge. It's good for culture, as, with a solution such as Sugarwork, you can retain not only explicit knowledge about processes and skills, but also tacit knowledge about how to maintain relationships and work with legacy products. And finally, honoring the legacy and knowledge of your tenured workers is a powerful way to recognize their contributions to building your organization.
To find out more about how to capture and share institutional knowledge from tenured workers at scale, contact us.
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