What happens to knowledge and know-how when one of your employees retires? How does knowledge loss affect your organization?
When one of your employees retires, it is expected that the successor will be up and running immediately. Often, the person steps into the new role with the organization’s assumption, ‘she’ll figure it out’. Yet, common wisdom says that it takes at least 6 months to settle into a new role.
Estimates of successor failure within the first 18 months ranges from 40-50% at the executive level. And the cost of losing an employee in the first year is estimated to be at least 3x salary. The impact of turnover on the leader, successor and organization ranges from lost productivity, missed deadlines, poor communication, unhappy customers, retention issues and higher turnover. With such huge, potential costs, it is in everyone’s best interest to help the successor settle in as quickly as possible.
What can you do to assist? Grab the knowledge before it walks out the door!
Rather than viewing retirees as ‘past their best before date’, or already in retirement mode, one obvious but underutilized option is to set up a process for the successor to tap into the rich knowledge base of the retiree.
Planning ahead and being intentional about creating opportunities for retirees to spend time with the successor enables the transfer of not only explicit knowledge and procedures but also tacit knowledge, the way we do things around here.
It is relatively easy and for the retiree to transfer explicit knowledge including how-to manuals, procedures and facts. It is far more complex and absolutely essential for them to describe and transfer tacit knowledge, the vast storehouse of wisdom inside her head, gathered through experiences, insight and intuition. Tacit knowledge, the 2/3 of the knowledge iceberg underwater includes best practices, tribal knowledge and contextual information.
Effective transfer of tacit knowledge generally requires extensive personal contact, regular interaction and trust. Each of your retirees has a depth of knowledge that will shorten the getting-to-know-the-job phase, help the successor get up to speed and become more productive and effective more quickly leading to higher job satisfaction and lower turnover.