Did you know that Fortune 500 companies lose about $31.5 billion annually by failing to share knowledge? That’s a lot of money you could spend on employee development, bonuses, office renovation; you name it. Is there something you can do to prevent knowledge loss? Luckily, there is!
Knowledge is power. This statement is particularly relevant now we all live in a knowledge-based economy. But what does it mean? Many definitions exist, but let’s stick with a simple one:
It’s an economy where knowledge is the primary resource, and knowledge workers are the dominant workforce group.
With the birth of the knowledge economy, knowledge has become the most important source of competitive advantage, something that has to be nourished and treasured. According to the knowledge-based view of the firm, sustainable competitive advantage is about using, exploring and maintaining firm’s knowledge.
An interesting fact: There are two types of knowledge – explicit and tacit
It is crucial to differentiate between two types of knowledge, explicit and tacit. Explicit knowledge can be codified, is easily replaceable and easily transferable. Tacit knowledge is difficult to verbalize, making it difficult to transfer. The good news – tacit knowledge is also hard to copy, making it more valuable to the organization. The bad news – it’s easily lost and hard to replace. However, retaining it is doable so do not lose hope! Before we start on knowledge retention tips, let’s find out what leads to knowledge loss.
Reasons for knowledge loss
Various scenarios can lead to knowledge loss, but let’s focus on the most common one: an employee leaving the organization either to pursue their interests elsewhere or to retire. Two groups of people should come to your mind: Millennials and Baby Boomers. Do they ring a bell? That’s great!
Employees quitting their jobs for better opportunities is nothing new, and it’s something that employers should be prepared for, especially now that Millennials are joining the global workforce (they will account for 50% of the global workforce by 2020). Millennials are a tough crowd to impress. They are ambitious and tech-savvy; 78% of them say they are strongly influenced by how innovative a company is when considering employers. Millennials value team collaboration and good career growth prospects over financial rewards. If you fail to engage them, chances are high they will leave. Here is a little reminder of how much it costs to replace an employee:
- For entry-level employees, it costs between 30-50 percent of their annual salary to replace them.
- For mid-level employees, it costs upwards of 150 percent of their annual salary to replace them.
- For high-level or highly specialized employees, it cost upwards of 400 percent of their annual salary.
Quite expensive, isn’t it? Well, there is more to it.
By 2030, 100% of Baby Boomers will be over 65. Millions of them will be retiring, taking the precious knowledge they have gathered over the years with them. One of Boomers’ main characteristics is knowledge protection or “job protection” syndrome. Over the years, they’ve kept most of their knowledge to themselves to increase their value and protect themselves. Knowledge sharing was not their priority.
Thinking that younger employees can easily replace older ones is erroneous. It takes a new employee at least 1 – 2 years before they become fully productive.
Three knowledge retention tactics
As you already know, tacit knowledge is difficult to manage and retain, but it’s not mission impossible! Here are three tips to help you retain tacit knowledge:
1.Introduce social collaboration
Interactions based on social collaboration stimulate tacit knowledge diffusion because they unite employees and encourage them to solve problems together. Teamwork provokes brainstorming and allows team members to observe how their colleagues use their tacit knowledge, which can be priceless. Firms in which employees work individually rather than in groups are especially prone to tacit knowledge loss. Reducing your company’s dependency on individual tacit knowledge by encouraging collaboration between employees diminishes the possibility of tacit knowledge loss during employee downsizing or retirement. Using social technology platforms such as emplo to boost collaboration can enhance productivity by up to 25%.
With emplo, your employees can produce personalized content using a newsfeed that will not only let them stay up to date with what their colleagues are up to, but it will also encourage knowledge sharing. Everything they say or do will be safely stored and easily accessible in emplo. It also allows you to create numerous theme groups where employees can work together on their projects and learn from each other. One to one communication is also possible, which significantly reduces the need to send internal emails resulting in productivity boosts. Our customer, Smart MBC, managed to cut down their internal email traffic by 97%!
2. Create a knowledge base
A company intranet where all important information can be safely stored and accessed from anywhere and at any time is another useful tactic. You can include information related to your customers, employees, your products or services. It not only ensures that information stays in the company, but it also has a positive impact on social collaboration and facilitates onboarding of new employees.
Guess what? emplo offers this feature too. You can create knowledge areas such as competition, HR insights or best lunch options. Go crazy; the sky is the limit! All information is nicely organized and easy to find. You decide who gets access to each knowledge area. A knowledge base should be easy to use, so employees at any age feel comfortable using it. That’s exactly what emplo is like. Remember to update it regularly!!
3. Introduce a mentoring scheme
The popularity of mentoring programs has been on the rise for the past two decades, and they have proven effective if properly implemented. Some sources say that mentoring is the most effective way of passing on tacit knowledge. It can be formal or informal. Informal mentoring might be as simple assigning a guide or a buddy to a new employee. More frequently, however, firms are seeking to introduce formal mentoring programs to train newcomers quickly and effectively. It’s a good idea to start thinking about implementing a mentorship program if you don’t have one in place, especially now that Baby Boomers are retiring, and younger employees are taking their place. Do not let that precious knowledge escape!
Now that you know the secret to knowledge retention – emplo, why don’t you give it a try? We offer a free trial – take advantage of it today!