Where Has All The Experience Gone?

We often hear about the challenge’s organisations face in reducing staff turnover in order to keep a successful culture and deep knowledge of the business practices and expertise. High turnover can result in lower productivity and higher costs being incurred as new team members are trained and inducted in to the business. This can be more so in multinationals that have significant on-boarding protocols that require new starters to often take longer to hit the ground. As a manager, we never like to see an employee leave and then have to fill that knowledge gap.

Often, employees leave and will find opportunities within the same industry or sector and there is a broaden of skills as the individual is able to build on skills they have already learnt. This happens regular and can add significant value to businesses as new ideas and innovation may be brought across with the new hire. Although the loss of a staff member may be viewed as a negative to their former employer, the industry can benefit greatly as knowledge is transferred and the individual builds on an existing skillset.

But what about experienced individuals that leave an industry or sector altogether?

Today’s job market can mean that new opportunities simply do not exist for skilled staff looking for work in their previous industry. What are the effects of this continual loss of knowledge? Can it be measured? Does anyone even care?

Most businesses are very good at putting a value on staff turnover. This can be measured in dollars spent on advertising, training, loss of productivity and the cost of hours in hiring. One previous employer of mine would take 12 months before we had service engineers trained to a level that were deemed ok to be sent out in the field. In this case, cost of replacement is very high.

Measuring an intangible like a loss to an industry is very difficult though. There may be anecdotal evidence that highlights some costs but the larger the industry the harder or more impossible it is to measure. There is no doubt that the loss of any experience and knowledge is hard to replace and yet it seems that losing these people is accepted and tolerated. Where once staff retired after spending a lifetime in an industry, it is more often the case these days that changes in the business landscape see people having to move sideways into other sectors as opportunities become scarcer.

For the new employer, there can be all sorts of upside as any new knowledge coming in to an organisation or industry can be beneficial. It wasn’t too long ago that people and not technology were the disruptors of industry. Employers must have seen an upside in the skills on offer to hire the person in the first place. There is also a plethora of business and industry consultants available these days that after spending considerable time in an industry offer up their knowledge and expertise to help others grow. This may stem some of the loss of expertise but is not a long-term fix, if there even is one.

An interesting book by Dorothy Leonard and Walter C. Swap called ‘Deep Smarts: How to Cultivate and Transfer Enduring Business Wisdom’, discusses the importance for organisations to capture and pass on the experience of the ever-increasing number of baby boomer retirees. This is hard to imagine how an industry achieves this if there are less places available and younger staff can cost less than experienced ones. This is the new paradigm that faces business under the pressure of revenue, margin and shareholder return focus that emphasizes doing more with less.

As I question above, does anyone even care.